KUALA LUMPUR: Malaysia rose five spots in this year’s Baseline Profitability Index (BPI) published by Foreign Policy magazine, climbing to No 6 out of a total of 110 countries from 11th placing in 2014.
The BPI is a ranking of destinations of attractiveness in the world for foreign investors.
In a statement yesterday, the Malaysian Investment Development Authority (Mida) said the ranking reaffirms that Malaysia is an attractive profit centre for investors in this region.
"Among Asean countries, only Malaysia and Singapore featured in the top 10. Indonesia was ranked 12th, Vietnam (23), the Philippines (30) and Thailand at the 38th position," it said.
Introduced in 2013, the BPI uses a holistic approach based on eight factors that would affect the ultimate success of a foreign investment. These factors cover economic growth, financial stability, physical security, corruption, expropriation by government, exploitation by local partners, capital controls and exchange rates.
The BPI calculation also incorporates changes made by the World Bank in its measurement of gross domestic product such as the revised method to compare living standards across countries.
Mida chief executive officer Datuk Azman Mahmud said this endorsement dissolves lingering misperceptions and attests to the country’s improving economic fundamentals and the government’s prudent, proactive and pragmatic policies to restructure and diversify the economy.
"The index sends a clear message that Malaysia provides a friendly business environment that makes it an attractive place to invest. This ranking is based not only on historical conditions but also on expectations about conditions prevailing over the next five years," he said.
As at June 30, 2015, Azman said Mida has "several exciting projects in the pipeline with investments worth RM25.8 billion for the manufacturing and services sectors".
"Building on this good track record of investment performance, we will continue to align our investment promotion activities with the 11th Malaysia Plan to ensure a significant leap in investment activities that are crucial towards achieving a high-income economy," said Azman.
This article first appeared in The Edge Financial Daily, on July 14, 2015.