CME: Malaysia drops to 31st position in the International Property Rights Index 2023
THURSDAY, 05 October 2023: Malaysia ranked 31st out of 125 countries in the International Property Rights Index (IPRI) 2023, released by the Property Rights Alliance in Washington, DC, while it was ranked 29th in 2022. Malaysia saw instead an improvement in the regional ranking, from 8th to 7th. The Center for Market Education is the Malaysian partner for the Property Rights Alliance and contributed to the annual report with the analysis of Malaysia. The report and the case study can be downloaded from here: https://www.internationalpropertyrightsindex.org/full-report
The three countries that achieved the highest score are Finland, Singapore, and Netherlands, according to the 2023 International Property Rights Index. Conversely, the bottom five countries included Chad, the Democratic Republic of the Congo, Haiti, Yemen, and Venezuela. The 125 countries included in the 2023 IPRI represent 93.4% of the world population and 97.5% of global GDP.
Hernando de Soto, renowned economist and President of the Institute for Liberty and Democracy highlighted that this report “supports the fact that property rights are correlated heavily with a successful economy and a higher quality of life”.
“The deterioration of Malaysian position in the index is due in particular to the worsening of the legal and political subindex, whereby the component that suffered the most was judicial independence. Good to see an improvement, instead, in political stability and rule of law”, added Dr Carmelo Ferlito, CEO of the Center for Market Education.
Executive Director of the Property Rights Alliance and Editor of the Index, Lorenzo Montanari, commented on the release: “Each year, IPRI highlights the key role that property rights play not only in maintaining a fair and transparent economic system, but also in representing the backbone of any free market economy. Property rights are one of the most important pillars of a free society and human rights, as stated in Article 17 of the United Nations Universal Declaration of Human Rights. The 2023 Index will be an important tool for policymakers and business communities to understand how the three main components of the property rights ecosystem (Legal and Political Environment, Physical Property Rights and Intellectual Property Rights) interact to attract investment and feed healthy institutions.’”
Malaysia’s IPRI score decreased by -0.126 to 6.174, placing it 7th in the Asia and Oceania region and 31st globally. The year before, Malaysia was ranked 8th at the regional level. The table below presents the different ranks and scores for the different components of the IPRI for Malaysia.
The main conclusions to be deducted are:
- Malaysia saw a drop in both its absolute IPRI score and its world ranking, and this is mainly due to:
- A significant drop in Legal and Political Environment in terms of both absolute score and global ranking;
- A heavy drop in global ranking for Judicial Independence, dropping from 29 to 49.
- While Malaysia’s global IPRI ranking was 31st, the country only ranked 48th in the world in terms of Legal and Political Environment; this is due in particular to:
- Very low rank in terms of Political Stability (50, improving from 53);
- Low rank in Control of Corruption (46) and Judicial Independence (49).
- Malaysia scored relatively well in terms of Intellectual Property Rights, with its global ranking improving from 32 in 2022 to 26 in 2023. This was due in particular to a significant improvement in Copyright Protection, which rose from 46 in 2022 to 17 in 2023.
According to Dr Carmelo, “the deterioration of Malaysia’s IPRI score and global ranking in 2023 should be of concern to Malaysian policymakers, in particular because the weakness is not the result of poor score in the protection of physical and intellectual property rights – where Malaysia scored pretty well – but rather it reflects institutional weak points in terms of Judicial Independence, Political Stability, and Control of Corruption”.
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