KUALA LUMPUR: Malaysia has jumped 11 places to 23rd in the IMD World Competitiveness Ranking 2025, marking its best performance since 2020.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the leap is attributed to significant improvements in economic performance, government efficiency and business efficiency, primarily driven by productivity reforms and trade diversification.
“Our efforts have paid off. We are determined to maintain this momentum through the RKB (Regulatory Reform) initiatives and strategic policy execution,” he said during the Ministry of Investment, Trade and Industry’s (Miti) second-quarter report card today.
Tengku Zafrul said one standout case is the Kulim Fast Lane/Fast Track project, a bureaucratic reform initiative using artificial intelligence (AI) and a centralised database to expedite business permits.
As a result, immediate leases were issued just one hour after compliance clearance and project approvals were reduced from 24 months to 10 months. This fast-tracking helped raise total investment in the project from RM50.1 billion in 2020 to RM192 billion in 2024, representing a 74% increase.
“This is what we mean by results from reforms,” said Tengku Zafrul. “Reduced bureaucracy is not just about speed, it drives real growth, jobs and investor confidence.”
Under Miti’s Good Regulatory Practises Framework, 807 regulatory reform projects have been registered to date, with RM374 million in cost savings recorded from completed initiatives as of June 2025. The ministry is targeting up to RM1.5 billion in cost savings by the end of the year.
Miti also announced that, effective May 6, only the ministry will issue Non-Preferential Certificates of Origin for exports to the United States, streamlining export documentation.
In a move to safeguard national security and uphold responsible trade, all exports, transit and transshipment of high-performance AI chips now require Strategic Trade Permits, as of Monday, under the Strategic Trade Act 2010.
Further, the report showed Malaysia has signed 18 free trade agreements (FTA) covering 28 countries, with the most recent being the Malaysia-EFTA Economic Partnership Agreement on June 23.
Miti noted that many exporters are unaware of FTA benefits.
“We are scaling up outreach and have allocated RM50 million in market development grants (MDG), with a RM22.7 billion export target for 2025–2026,” Tengku Zafrul said.
Between January and June alone, MDG recipients recorded RM2.88 billion in reported export sales, with RM2.09 billion potentially realised.
Malaysia’s digital economy saw RM310.7 billion in approved investments between 2021 and Q1 2025, generating 92,058 jobs, largely in data centres, which Miti estimates have a 6.6x economic multiplier effect.
“For every ringgit spent on data centres, the economy gains RM6.60. This is the kind of return that fuels national resilience,” Tengku Zafrul noted.
Miti-led missions to countries including the US, the UK, Singapore and India have generated RM25.6 billion in potential investments and RM30.08 billion in potential exports in the first half of 2025.
Green investments under the Green Investment Strategy reached RM22.9 billion in Q1 2025, with 1,492 approved projects in renewable energy, green mobility, and circular economy sectors.
Foreign investments made up 53.7% of the total.
From 2021 to Q1 2025, Malaysia approved 3,494 manufacturing projects, with 3,095 implemented, achieving an 86.4% realisation rate. Employment in the sector rose by 50,000 in Q1 2025 alone.
Median wages grew by 5.4% year-on-year to RM2,745, while GDP value-added from manufacturing increased RM3.8 billion to RM95.7 billion.
Miti’s NIMP 2030 initiative to advance economic complexity is also progressing.
Five local IC design firms have been established, and RM52 billion in semiconductor-related investments have been secured.
The Smart Tech-Up programme now supports up to 80 smart factories by 2025.
Investments in chemical and related sectors soared by 105.1% year-on-year in Q1 2025, reaching RM479.26 billion, up from RM233.68 billion.
Foreign direct investment alone surged by 174.4%.
On the domestic automotive side, Miti report noted that Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is on track to launch its first electric vehicle by end-2025.
Meanwhile, the MARiiCAS e-bike rebate programme, under Budget 2025, has approved 11,724 applications worth RM28.14 million to support low-carbon mobility.
Down south, the Johor-Singapore Special Economic Zone accounted for 90.4% of Johor’s total approved investments in Q1 2025, totalling RM30.14 billion, with a majority in the services sector.
Miti has also ramped up efforts to build supply chain resilience through cross-ministerial cooperation and the upcoming Supply Chain Intelligent Management System, set to go live in December.
“In a time of geopolitical tension and resource shocks, we must digitise, diversify and cooperate to safeguard economic security,” Tengku Zafrul emphasised.
