Is Kuala Lumpur (KL) a Major Financial Centre?

KL’s ranking as a financial centre is now 40^th (up six places) according to Global Financial Centre Index 24 in its September 2018 Report. It is however, ranked below Dubai (15^th), Abu Dhabi (26^th) and Doha (34^th).

London has been replaced by New York as the world’s most attractive financial centre as Brexit prompts banks to shift jobs out of the city. Hong Kong and Singapore are ranked after London. Hong Kong is only three points behind London. It is highly likely that an Asian centre will top the list soon. The rise in China’s centres (Shanghai or Beijing) will be limited by the tight control exerted by the ruling Communist party.

Key areas for a rise or fall are attributed to several factors. Human capital factors include: availability of skilled workforce, flexible labour market and quality business education. The business environment factors include regulation tax rates, corruption, economic freedom and how difficult or otherwise of doing business. The financial sector development factors assess volume and value of trading, cluster effect and employment and economic output. The infrastructure factors include price, availability of office space and public transport. Reputation and general area considers subjective matters like innovation, brand, cultural diversity and competitive positioning.

It looks like a tall order for KL to move up further but move up we must! Or, we end in another failed aspiration to be a financial hub. The good point is that if Dubai or Abu Dhabi could do it, surely we could do better!

Reference

Long Finance, Global Financial Centres Index, Z/Yen Partners in collaboration with the China Development Institute.

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