KUALA LUMPUR: A World Bank report has ranked Malaysia as the sixth
friendliest country in the world to do business, beating developed
nations such as South Korea, the United Kingdom and Australia.
In a survey of 189 economies, the “Doing Business Report 2014” saw
Malaysia jumping from 12th place last year, and up from 25th when it
first joined the survey in 2007.
Countries with high rankings, according to the World Bank website,
meant that their respective regulatory environments made it better for
local firms to start up and operate.
Business-friendly reforms improved a country’s standing, which Malaysia was noted for.
These included the reducing of company registration fees, which made starting businesses here less costly.
The report said Malaysia also made it easier for people to deal with
construction permits by coming up with a one-stop shop. Even getting
electricity was a factor.
“Malaysia made getting electricity easier by increasing the
efficiency of internal processes at the utility and improving its
communication and dialogue with contractors,” it said.
The report included Malaysia as a case study for electronic tax filing and payments.
Despite initial public reluctance, the report said, more people used
the e-filing system over time, with businesses aided in the process.
“The time that businesses need to comply with Malaysia’s tax
regulations fell from 190 hours in 2004 to 133 hours in 2012,” it said.
The report also found Malaysia ranking highly along specific rankings.
Ranking first in the world, Malaysia tied with Britain for “Getting
Credit”, and earned fourth and fifth places for “Protecting Investors”
and “Trading Across Borders” respectively.
The report’s findings were welcomed by International Trade and
Industry Minister Datuk Seri Mustapha Mohamed, who said the country had
aimed to be in the report’s top 10 list by 2015.
“Soon after Prime Minister Datuk Seri Najib Tun Razak assumed office, Malaysia was in 23rd place.
“The rise to sixth place is testament to his stewardship and a
result of the economic and government transformation programmes,”
Mustapa said in a statement.
He added that the ranking helped to reinforce Malaysia’s position as
a preferred destination for trade and investments among local and
foreign investors.
Singapore was ranked first in the World Bank’s list followed by Hong Kong, New Zealand, the United States and Denmark.
Contributed by Patrick Lee The Star/Asia News Network
A Malaysian global ambition realised
PEMUDAH or The Special Task Force to Facilitate Business Malaysia’s
ambition to be ranked among the top 10 in the world was realised when
Malaysia was ranked 6th in the
World Bank Ease of Doing
Business Report 2014 (DB 2014), up from 12 in 2013 and 25 in 2007 when Pemudah was established.
Pemudah is a partnership between public and private sectors
established in 2007 to improve the ease of doing business in Malaysia
and to enhance the nation’s competitiveness.
This achievement is very significant as Malaysia competed with 189
economies to be counted among the best in a race where competition was
intense and benchmarks were high.
I would like to share the 6-year journey from 25th to 6th rank in
the DB rankings. Pemudah was set up by the then prime minister, Datuk
Seri
Abdullah Ahmad Badawi mainly to address weaknesses in public service delivery and continuous civil service “bashing” in the media.
He wanted to adopt a fresh approach and saw the value of a joint
private-public sector committee in improving public service delivery.
A small group of 23 leaders from both the private and public sectors
was appointed to the task force which was co-chaired by the then Chief
Secretary to the Government, Tan Sri
Mohd Sidek Hassan
and me. The vision adopted at the first meeting was to have “a globally
benchmarked, customer-centric, innovative and proactive service in
support of a vibrant, resilient and competitive economy and society”.
This vision was underpinned by the following values: A sense of
urgency, proactive public-private sector collaboration, facilitation,
not hampering; no more regulation than necessary; zero tolerance for
corruption. We announced our aim was to be among the top 10 most
competitive economies globally.
How did Pemudah deliver on the promise? A shared vision, a common
multi-agency platform, commitment and clear rules of engagement
contributed to delivering the outcomes. Meetings were scheduled at the
beginning of the year, fixed on the last Friday of each month, except
when parliament was in session when meetings were convened on Tuesdays.
Setting meeting dates early ensured high attendance at meetings where no alternate members were permitted.
The commitment of members was not only confined to the monthly
meetings of the task force as Pemudah worked through two main working
groups (WG) and more than 10 focus groups (FG) which focused on specific
areas.
Each group was chaired either by the public or private sector and
reported progress on a monthly basis to the main task force. No
allowances of any kind were paid and members contributed voluntarily for
the common good.
The WG on Efficiency Issues focused on operational efficiency
including licensing, e-payments and immigration-related matters. The WG
on Policy Issues deliberated on national competitiveness issues like
FIC, liberalisation, education, FTAs, etc.
The FGs covered specific issues like paying taxes, registering
property, enforcing contracts, business processes, DBKL to name a few.
While membership in Pemudah was confined to appointed members,
membership in the WGs and FGs was wider.
To enhance awareness by the business community and citizens, the
secretaries-general/heads of ministries/agencies wrote articles in the
press and publicised their email addresses to enable direct
communications to be direct and instantaneous and the media used to
publicise improvements made.
Pemudah was supported by a strong secretariat in the
Ministry of Trade and Industry (Miti) that issued minutes of meetings within 48 hours to facilitate quick follow-ups to decisions made.
The key improvements to public service delivery were varied with
significant gains registered in many areas. A case in point is the
issuance of construction permits, ranked 137th in 2007.
Datuk
Arpah Abdul Razak, then director-general of
Local Government Department
and currently the secretary-general of the Housing and Local Government
Ministry, set up one stop centres which allowed concurrent submission
of all applications.
The centres then obtained approvals from all technical agencies within a stipulated time-frame. Kuala Lumpur mayor Datuk Seri
Ahmad Phesal Talib further streamlined the procedures/timelines.
Timelines for approvals were reduced from 420 days to 100 days while
procedures declined from 39 to 10. Malaysia’s rankings in construction
permits leapfrogged to 43rd in DB 2014.
Another area of significant improvement registered was Trading Across Borders. Miti secretary-general Datuk Dr
Rebecca Fatima Sta Maria chaired a multi-agency FG comprising Customs,
Transport Ministry,
Finance Ministry
and permit issuing agencies to reduce time taken to import and export
though pre-clearance of cargo and reducing documentation for such
transactions.
The work of this FG improved Malaysia’s rankings from 46th to 5th in the six years.
In streamlining processes to start and close a business, credit is due to former
Companies Commission of Malaysia (CCM) chief executive Datuk
Abdul Karim Abdul Jalil
and his team. Today, you can start a business in one hour compared to
three days in 2007. In addition, the introduction of the Malaysian
Corporate Identity by the Malaysian Administrative Modernisation and
Management Unit has also contributed to Malaysia’s ranking improving
from 71st to 16th in 2014.
The ranking will strengthen further with the impending introduction of a new Companies Act by CCM chief executive
Mohd Naim Daruwish that will further reduce costs and improve efficiency.
Malaysia’s ranking in Paying Taxes was 49th in 2007, 15th last year
and 36th in DB 2014. Several initiatives were implemented by former
Inland Revenue Board (IRB) CEO Tan Sri
Hasmah Abdullah
and current CEO Datuk Dr Mohd Shukor Mahfar to facilitate electronic
services, prompt refunds of overpaid taxes and enhance transparency of
the tax process.
Hasmah reported that she received more than 500 messages on the day
her email was made public and a special mechanism was set up to allow
her to reply to each of them. Such was the commitment of this former
civil servant.
Businesses used to complain about the backlog of court cases and
often commercial contracts included provisions for determining courts to
be in Singapore.
Former Chief Justice (CJ) Tun Zaki Tun Azmi and current CJ Tun
Ariffin Zakaria were instrumental in motivating their team to clear the
backlog. They also took up Pemudah’s proposal for new commercial courts
to be established with a client charter of resolving all new commercial
cases within a nine-month period – a timeline that is world class by any
standards.
The transformation and improved rankings from 81st in 2007 to 30th in DB 2014 was the subject of a special report by the
World Bank on Malaysia as a best practice. Rankings will improve further as the focus moves to the enforcement of judgements.
We have experienced the speed of issuance and renewal of passports,
due largely to the work of past and present Immigration
directors-general, including Tan Sri Mahmood Adam, who subsequently
assumed the position of
Home Affairs Ministry
secretary-general. He also adopted and adapted Pemudah’s point system
for evaluating eligibility for permanent residence and made it easier
for foreign spouses and expatriates to work here.
When the proposal to disband the FIC was presented to Prime Minister
Datuk Seri Najib Tun Razak, he was decisive. The decision has
contributed significantly to improving the investment climate for
Malaysia.
The 6-year journey of Pemudah is evidence that with the right focus
and right commitment by the right parties, our rankings in world
benchmarked public services can be even higher. It also indicates the
power of public-private sector collaboration as a common and effective
platform in moving the Malaysian development agenda forward.
I wish to congratulate all members of the civil service, past and
present and to thank my private sector friends who have contributed to
the incredible journey of Pemudah.
A special word of thanks to the former chair, Mohd Sidek, for his
strong leadership and for throwing the challenge to be top 10 at us – we
have done it in partnership with everyone.
I am confident that Chief Secretary to Government Tan Sri Dr Ali
Hamsa and the new private sector co-chair, Datuk Saw Choo Boon will be
successful in maintaining or improving Malaysia’s ranking with the
continued support of the private and public sectors.
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