Malaysia has moved two notches to become the 14th world's most competitive economy, beating countries like Australia, Britain, South Korea, China, Japan and France, according to the World Competitiveness Yearbook (WCY) 2012 survey compiled by Swiss business school Institute for Management Development (IMD).

"Malaysia registered significant improvements in the business efficiency category (sixth position from last year's 14th) and in the government efficiency category (13th from 17th)," said the International Trade and Industry Ministry (MITI).

"Ranking improvements were recorded in the sub-categories of business productivity and efficiency, finance, business legislation, and societal framework."

In terms of economic performance category, MITI noted that although Malaysia maintained its "top 10 ranking, its position slipped by three places from last year's seventh ranking."

"This is attributable to slower employment growth and concerns over rising prices," it said.

Malaysia has marginally improved its ranking to 26th spot from 27th in the infrastructure category and highlighted the areas of concern were health, environment, education and scientific infrastructure.

"We recognise there are areas where improvements in our competitiveness can still be made. Special attention will be given to address these concerns. Our overall objective remains the same: to achieve a top 10 ranking in the near future," noted MITI.

The IMD survey assessed countries based on four main competitiveness factors - economic performance, business efficiency, government efficiency and infrastructure. The ranking measure how a country manages its human and economic resources to improve prosperity.

Hong Kong reclaimed its top position in the global competitiveness rankings, followed by the US and Switzerland.

Despite a tough year, the US remained at the spotlight due to its capacity for innovation, the dynamism of its enterprises and its unique economic power.

"US competitiveness has a deep impact on the rest of the world because it is uniquely interacting with every economy, advanced or emerging," said Professor Stephane Garelli, Director of IMD's World Competitiveness Centre.

"No other nation can exercise such a strong pull effect' on the world. Europe is burdened with austerity and fragmented political leadership and is hardly a credible substitute, while a South-South bloc of emerging markets is still a work in progress."

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