A REVIEW OF INDICATORS USED FOR MEASURING COMPETITIVENESS AMONG STATES IN MALAYSIA

Abstract

As with many developing countries in this world, Malaysia aims to achieve the status of a high-income nation. Among the steps taken that continue to be the focus are efforts to attract foreign investors into the country, which depends very much on the competitiveness of the Malaysian economy. Many studies have assessed Malaysia’s level of competitiveness in comparison with other countries in the world. However, even in a country itself, the level of competitiveness varies between states. States also compete to attract investments both, from local as well as foreign investors. In view of this, this study developed a tool to assess the level of competitiveness of states in Malaysia. Since the concept of competitiveness is complex and multidimensional, the main challenge of this study is to determine tools and indicators that can measure this competitiveness and rank it accordingly. The competitiveness index should complement the competitiveness index developed by the Economic Planning Unit (EPU), namely the Malaysian Quality of Life Index (MQLI) as well as the Malaysian Urban-Rural National Indicators Network for Sustainable Development (MURNInets) by PLANMalaysia (Department of Urban and Rural Planning). Thus, the competitiveness index is described as a measurement that provides a summary of descriptive information about specific issues. This study serves as a review of the indicators’ theoretical framework used to measure competitiveness based on previous studies about this area of study in comparison with MQLI and MURNInets.