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Tengku Zafrul: Vast potential for Behavioural Insights in ease of doing business

Tengku Zafrul: Vast potential for Behavioural Insights in ease of doing business

21 Mar 2023

The Ministry of International Trade and Industry (Miti) foresees vast potential for nudging and Behavioural Insights (BI) in increasing the ease of doing business in Malaysia.

Its Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz, said BI can be utilised particularly in reducing compliance costs and deploying the optimum level of resources on regulatory or procedural monitoring and enforcement.

“These are key to managing operational costs and maximising profitability.

“As such, nudging and BI can be a reformative step for quality rule-making and efficient regulatory implementation without relying on heavy-handed or coercive measures,” he said in his opening remarks at National Conference on Behavioural Insights 2023 via online today.

Tengku Zafrul also foresees its application by agencies such as Malaysia’s Special Task Force to Facilitate Business (PEMUDAH) and other regulatory or enforcement entities with a similar mandate to reduce bureaucracy for investors and businesses to achieve the country’s long-term goals.

He said Malaysia welcomed BI applications for effective policies and quality regulations, where a ‘nudge’ is utilised as a gentle push or reminder to help people make better, more appropriate decisions without limiting their freedom of choice.

Last year, with the assistance from Malaysia Productivity Corporation (MPC), Miti itself conducted a BI project to enhance compliance with the Strategic Trade Act 2010.

He said the incorporation of nudges such as using plain language, reorganising the information sequence, and emphasising pertinent details effectively reduced the number of errors in the application process and improved regulatory compliance.

Meanwhile, MPC director-general Datuk Abdul Latif Abu Seman said quality policies and regulations are critical to robust productivity growth.

He said Malaysia’s productivity has recovered to the pre-pandemic performance in 2022, at 5.4 per cent growth, registering a value level of RM95,628 per employee. This was a sharp rebound from 2021 when Malaysia’s productivity was at 1.8 per cent growth with RM90,697 per employee.

Malaysia aims to achieve a productivity growth of more than 3.6 per cent throughout the Twelfth Malaysia Plan period, towards realising the productivity level of RM106,060 by 2025.

“In achieving this target, Malaysia’s business ecosystem must be conducive to economic growth, and its policies and regulations must be of quality to build the right environment,” he said.

Abdul Latif said, in building the capacity of government officers and creating a pool of local BI experts, MPC has trained 609 individuals involving 42 ministries and government agencies and engaged with the private sector to expand the pool.

The corporation has developed the National Behavioural Insights Guidelines as a reference for regulators, policymakers and practitioners to apply BI as a policy and productivity tool.

“Nudging as a tool in applying BI is a relatively new concept for us in promoting and encouraging a more preferred behaviour without limiting choices. Nudging could be a useful non-invasive and cost-effective alternative to encouraging compliance,” he added.

Source: Bernama