Malaysia remains among freest economies, improves in integrity, says US index

Malaysia’s economy is among the freest in the Asia Pacific region, ranking fifth among 40 countries and 22nd globally, according to the latest annual index of economic freedom published by a US think tank.

The Heritage Foundation’s Index of Economic Freedom also gave Malaysia a better score in terms of government integrity, with 53.2 compared to 49.4 in 2020.

“The law strongly protects owners of real property. Established protocols ensure the integrity of the property registration and titling systems,” it said, noting the National Anti-Corruption Plan and the action taken over the 1MDB scandal under the Najib Razak administration.

“It remains to be seen how robustly the plan will be implemented,” it added.

The index meanwhile shows Malaysia scoring slightly lower in terms of labour and business freedoms as well as tax burden, while improving in scores for monetary and trade freedoms.

“The government has taken steps to liberalise foreign investment policies, but there still are local equity participation requirements in some sectors. Regulatory adjustments in the financial sector include the easing of limits on foreign ownership in financial subsectors,” it said.

Since coming to power a year ago, Prime Minister Muhyiddin Yassin’s administration has pledged no interference in corruption cases involving politicians.

Last year, Najib was found guilty of all seven charges related to some RM42 million misappropriated from SRC International.

Putrajaya today said there would be no let-up in the government’s efforts to bring those involved in the 1MDB scandal to justice.

The government has reached settlements totalling some RM19 billion from Goldman Sachs, Ambank and Deloitte, entities involved in the 1MDB scandal.

The Index of Economic Freedom is based on 12 indicators under four categories: rule of law, government size, regulatory efficiency and open markets.

Although Malaysia’s overall score dropped by 0.3 of a point, its global ranking improved by two spots from 24th last year.

The index, which covers more than 180 countries, also placed Malaysia in the “Mostly Free” category alongside 33 others including major economies such as Britain, the US, Canada, Sweden, South Korea and Japan.

Topping the index for the second time this year is Singapore, with a score of 89.7 points, followed by New Zealand, Australia, Switzerland and Ireland.