REPORTS over the past couple of days on the country's competitiveness has revealed some interesting and positive developments as to the changes that are taking place within the country.

News that Malaysia jumped a notch in the World Competitive Yearbook on the back of improvements in government and business efficiency is welcomed as government bureaucracy has been a thorny issue for years.

The breakdown on how the competitiveness ranking was attained also shows that progress, such as the diversification of the economy and the work done by Pemudah, in the right areas is being achieved.

A day earlier, Malaysia Productivity Corp (MPC) published its report that showed the country's productivity growth, even though having slowed, increased by 2.9% in 2008.

But one telling statistic from the MPC report was the productivity growth in the key sectors in the country.
Looking at that data, it's understandable why Malaysia is looking towards the services sector to launch the country into a high income economy.

The services sector registered productivity growth of 3.3% with transport and trade posting strong improvements of 4.5% and 4.3% respectively.

The report also showed finance had registered a productivity growth rate in excess of 4% last year.

In comparison, productivity growth for agriculture was 3.01%, manufacturing was 2.01% and construction was 1.52%.

Services has been a big driver of economic growth over the past few years. The liberalisation of 27 sub-sectors in the services sector would open more opportunities for further investments in Malaysia but could very well contribute to lifting growth and productivity of the sector.

Having the freedom to invest without restrictions would sow the seeds of innovation in services and nurture higher value investments that might have been curtailed before by archaic restrictions.

To move up the services value chain, what is needed is not only more capital but also better human skills.
More should also be done to retain the country's best and brightest brains as every year, we face a hue and cry over the award of government scholarships for students who have excelled in public examinations.

The time has come to reward those truly deserving of aid in the hope that they will eventually play a role in helping the economy fulfil its own promise.