Monday, November 2, 2009

THE 2009: LEGATUM PROSPERITY INDEX (The different between Finland and Malaysia based on 9 aspects studied)

The difference between Malaysia and Finland based on 9 aspects studied

Yesterday when I read on Legatum prosperity 's index of year 2009 which showed that most prosperous country in the world was Finland, I remember the information delivered before by my lecturer when I was studying in Universiti Sains Malaysia several years ago. According to my lecturer, Malaysia must produce many intellectuals with the hope that hoped at one later time it would bring Malaysian to a developed and peaceful level like Scandinavia 's countries. Today it is clear that all the information presented by him is true and accurate.Now, I would like to attract your attention to see the difference between findland with Malaysia in 9 aspects studied.

It is hoped that this comparison will be the basis for a developing country like Malaysia to strive to achieve developed nation status as Finland.

Finland 1

Fast Facts
5.3 mn (2009 est.)
GDP (per capita)
$36,900 (2008 est.)
2.5% (2007)
Life Expectancy
71 years (2003)
$2,128.0 bn (2008 est.)
7% (2007)
Average Life Satisfaction
8/10 (2008)
GDP (growth)
0.9% (2008 est.)
Freedom House Rating
Free (2009)
Political System
Republic (2009)

Malaysia 39

Fast Facts

25.7 mn (2009 est.)
GDP (per capita)
$15,200 (2008 est.)
2% (2007)
Life Expectancy
63 years (2003)
$384.3 bn (2008 est.)
4% (2007)
Average Life Satisfaction
6/10 (2008)
GDP (growth)
4.6% (2008 est.)
Freedom House Rating
Partly Free (2009)
Political System
Constitutional Monarchy (2009)

Economic Fundamentals - Ranked 10thFinland’s economy is sound but foreign direct investment is low relative to other top ranking economies
Finland performs well in economic fundamentals, with unemployment at 7% and a low inflation rate of 3%. Finnish workers have access to a large amount of physical capital, such as offices and machinery, placing the country at 16th on this variable. Domestic savings are at 27% of GDP and household expenditure at 25% of GDP. The banking sector is highly efficient, with 0.3% of loans in default and narrow lending and borrowing margins that rank Finland’s banking sector the second highest, internationally. The country’s level of foreign direct investment is average according to global standards. A strong ratio of export revenues to the cost of imports indicate good terms of trade and a low raw material concentration points toward a heavily industrialised nation, focused on high value-added products and services.

Economic Fundamentals - Ranked 24thThe Malaysian economy is productive, driven by high levels of international trade
Unemployment is low at 4% and Malaysian workers have access to a high level of capital stock, including offices and productive machinery. Inflation is just 2%, the domestic savings rate is a high 42%, and household spending accounts for a quarter of GDP, suggesting a significant domestic market. The banking sector is competitive and efficient, as indicated by a very low spread between lending and borrowing margins, and a low number of non-performing loans. Malaysia avoids dependence upon raw materials, with a low proportion of primary products in its exports. Malaysia ranks best in the world for its export revenues relative to the cost of imported goods, indicating a strong capacity to earn foreign currency. Foreign direct investment is 5% of GDP.

Entrepreneurship and Innovation - Ranked 9thIn Finland, secure technology fosters a favourable domestic business environment
Businesses face few barriers to entry, with only three formal procedures to start a business, and this favourable environment has led to 10,424 new businesses registering in 2007. The internet infrastructure, as measured by secure internet servers and bandwidth, is relatively strong, ranking the country 12th in the former and 30th in the latter variable. On average, access to personal computers is high, at 50 per 100 capita, placing Finland in the top 20 on to this variable. ICT and high-tech exports account for a fifth of goods exported, and value added in services is also high ranking Finland just outside the top 30 on this variable. Finland enjoys a high level of royalty receipts, meaning the country is able to capitalise on its intellectual property. Investment in R&D is considerable, at 2.6% of GDP, placing Finland in the top 10.

Entrepreneurship and Innovation - Ranked 28thMalaysia’s high number of entrepreneurs could benefit from a stronger internet infrastructure
Malaysia has a limited communications infrastructure, with only 23 personal computers per 100 people, and only 17 secure internet servers per million people. Supporting this is a moderate level of internet infrastructure, as measured by bandwidth. Malaysia’s performance is, however, boosted by a flourishing high-tech industry. Levels of ICT exports are strong, and high-tech exports constitute over half of total exports. High levels of royalty receipts indicate that Malaysia is able to capitalise on its innovations. Value added in Malaysia’s service industry amounts to 41% of GDP, which is near the bottom of the rankings for this variable. R&D expenditure is just 0.6% of GDP, giving Malaysia a rank of 50th out of 104 for this measure. Nine procedures are required to start a business, and over 38,000 businesses were started in Malaysia in 2007, a high number boosting Malaysia to the 19th position in that category

Democratic Institutions - Ranked 9thFinnish citizens can participate freely in an open and democratic political system
Finland ranks first for political rights and civil liberties and this can be attributed to appropriate constraints on the power of the executive branch, well regulated and competitive elections, and significant checks and balances throughout the political system. Finland also ranks first in the Index in terms of open competition for both the executive and legislative branches of government, and in regulation of the electoral system. The judiciary is independent, and the political system as a whole is stable, the last fundamental change having occurred more than 60 years ago.

Democratic Institutions - Ranked 69thDespite an executive branch that has significant checks on its power, Malaysians’ civil rights and freedom to participate in politics are limited
Malaysia is categorised as a partial democracy, with limited levels of free and open political competition and sound regulation of political processes. Its citizens have only moderate freedom to participate in activities such as joining political parties or running for office, and there are limits on their civil rights, including freedom of expression, belief, and association. The processes for transferring executive power are not fully open and regulated. Political instability is a small factor in Malaysia, with the last change of regime occurring less than four decades ago. Elections to both the executive and legislative branches of government are competitive. There are also significant constraints upon the power of the executive, partly due to an independent judiciary.

Education - Ranked 3rdFinland invests significantly in education, producing a well qualified workforce
Education expenditure in Finland is one of the highest, globally, with over $12,000 spent per student in primary and secondary education. With a primary school enrolment rate of 97%, a top 10 ranking for secondary enrolment, and a 93% enrolment rate for tertiary education, Finland ranks among the highest on all enrolment variables. The Finnish labour force has an average of 5.5 years of secondary education, placing Finland in the top three, globally, and an extremely high average of 4.8 years of tertiary education. Investment in a highly skilled workforce begins early, with a high pupil to teacher ratio of 16 students to each teacher in primary schools, and parity across the sexes with regard to enrolments.

Education - Ranked 52ndDespite very low levels of educational expenditure, Malaysian students benefit from high quality primary schools
Primary school enrolment is gender equal and children benefit from a favourable ratio of one teacher for every 17 students. However, successful enrolment drops somewhat at secondary school level and even more in tertiary education, where only 69% and 29% of the population enrolled, respectively. However, the workforce is well educated, with an average 5.3 years of secondary education and four years of tertiary educationper worker. Malaysia achieves this success despite a very low annual expenditure of $2,950 per student.

Health - Ranked 7thDespite strong healthcare provision, Finnish citizens are only moderately satisfied with their health
Life expectancy in Finland is high at 71 years and the country has strong healthcare provision, with 26 doctors per 10,000 capita and seven hospital beds per 1,000 people. Finland obtains the highest possible score in terms of public access to sanitation facilities and 93% of the population expressed satisfaction with the quality of water.* Infant mortality rates are among the lowest in the world at only three instances per 1,000 births and just 3% of the population is undernourished.* Despite strong healthcare provision, Finnish citizens report low levels of health satisfaction: personal health satisfaction levels place Finland at 32 on this variable, approximately one in five people claim health problems, only 69% of respondents report feeling well rested, and 19% reported feeling consistent pain.*

Health - Ranked 40thDespite a weak health infrastructure, Malaysians are satisfied with their health and feel well rested
Malaysia’s health infrastructure has significant limitations: there are a low number of doctors and nurses per capita, and only 18 hospital beds per 10,000 people. However, on measures of health outcomes, Malaysia is much more successful. It ranks in the top 50 for health-adjusted life expectancy at 63 years. Only 3% of the population is undernourished, and infant mortality figures are low. More than nine out of 10 people have access to sanitary waste disposal facilities and 77% are satisfied with their water quality.* Malaysians seem broadly pleased with their personal health: 87% of Malaysians are satisfied with their general level of health, only a quarter of Malaysians indicated that they have significant health problems, and only 17% reported being in pain for a significant portion of the previous day.* Nearly eight in 10 Malaysians felt well rested, placing Malaysia in the top 10 countries on this variable.*

Safety and Security - Ranked 2ndFinnish citizens enjoy high levels of personal security and low crime levels
Finland faces few security challenges related to refugees, social groups with a history of discrimination or other grievance, or human flight from dangerous conditions. Incidences of state-sponsored violence or repression of citizens are the lowest in the world, and there were no casualties due to civil war in 2007. With 27 homicides per one million people, Finland performs only above the global average on this variable. Further, almost one in 10 report their property having been stolen over the past year.* Despite these estimates, civilians’ perceptions of their own safety are strong, with 81% feeling safe to walk alone at night, and only 2% having claimed to have been assaulted in 2007.*

Safety and Security - Ranked 48thMalaysia faces serious challenges related to refugees, but most citizens live in relative safety
Malaysia faces significant challenges related to the presence of refugees and internally displaced individuals, as well as from social groups with a history of discrimination or other grievances. There are also some problems with human flight, as individuals seek a better life abroad, and some alleged incidents of government-sponsored torture and political imprisonment. There were no casualties from civil war in 2007. Although only a low 56% of Malaysians reported feeling safe walking the streets alone at night, crime rates are lower than this might suggest.* Homicide rates are low at just over five per 100,000 persons, and only 16% of respondents had property stolen in the last six months.* Just 5% of people had been assaulted in 2008, a very low figure by international standards.*

Governance - Ranked 2ndFinnish citizens have high levels of confidence in their government
Finnish citizens have extremely high levels of trust in their political system. Approximately 94% have confidence in honesty of elections, and the system allows full political participation. Only 13% of people believe their government to be corrupt, while only 20% believe local businesses to be corrupt. These are the lowest rates of corruption perception worldwide. Public confidence in the military is high, with 93% showing confidence. Finland benefits from a very effective government, ranking the country seventh on this variable. A sophisticated judicial system, respect for property rights, and high quality enforcement of law place Finland in the top 10 with regard to rule of law and regulatory equality. The judicial system, in turn, has the approval of the public, with 80% declaring their confidence in the courts.

Governance - Ranked 37thThe Malaysian government is effective and generally upholds the rule of law
Malaysia is ranked 35th for the extent to which its government equitably enforces the rule of law and 38th for the quality of its regulation of investment and competition. Its bureaucracy implements policies in a highly effective manner. While Malaysians have the right to change their government and participate in politics, this is subject to some limitations. Although 62% of people have confidence that elections are carried out in a fair way, over four in five people believe that government and local businesses are corrupt, a relatively high figure, internationally.* However, confidence in courts and in the military is high, with 76% and 84% expressing confidence in those respective institutions.*

Personal Freedom - Ranked 7thFinnish citizens enjoy high levels of freedom of speech and religion and tolerance for diversity
Finnish citizens enjoy unconstrained levels of freedom of movement, religion, and speech, and 95% of respondents feel satisfied with their freedom to choose in their daily lives, placing Finland 3rd on this latter variable.* Tolerance of others is also high, with three-quarters of respondents believing Finland a good place for ethnic minorities, and 78% feeling that Finland provides immigrants with a good environment in which to settle.*

Personal Freedom - Ranked 83rdA very low percentage of Malaysians believe the country is welcoming to immigrants
Malaysia ranks relatively poorly on measures of freedom. Although 72% of citizens in this highly multiracial society think that Malaysia is a good place to live for ethnic minorities, just 19% believe that the country is welcoming to immigrants.* Freedom of movement, religion, and speech is also low, by international standards. However, over four out of five Malaysians are satisfied with their freedom to choose in life, a comparatively high figure internationally.*

Social Capital - Ranked 6thIn Finland, social trust is very high
Social capital is strong in Finland, with 59% of individuals believing other people can be trusted, and a very high number of respondents stating that friends are important to them, ranking the country in the top five on these variables.* Further, 96% of Finns believe they can rely on their family and friends.* High donation and volunteering rates place Finland amongst the top 30 nations, but helping strangers remains uncommon, with only 37% reporting they had helped a stranger in the past year, placing Finland 73rd on this latter variable.* Finnish citizens enjoy high levels of group membership: sports, arts, and environmental association memberships are all in the top 20, at 36%, 19%, and 10%, respectively.* Further, despite a low level of religiosity, 79% of the population claim, to be members of a religious institution.*

Social Capital - Ranked 52ndOnly one out of 10 Malaysians trust others, but more than eight out of 10 feel they can rely on family and friends during times of need
Just 9% of Malaysians believe others can be trusted, placing Malaysia below the global average for this variable.* Levels of membership in social groups are relatively low: 31% of Malaysians are members of a sports group, 22% are in an arts organisation, and just 10% are in an environmental group.* Levels of donations to charity, volunteering, and helping strangers are average by international standards.* Although nearly eight in 10 Malaysians consider themselves religious, just 34% are members of a religious organisation.* A high number of people think that friends are important to them, and 85% of Malaysians feel they have someone to rely upon in times of need.*

* Data taken from the Gallup World Poll

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