Malaysia has a corruption problem that limits economic growth.

"Corruption in Malaysia has reached a critical level as the country falls in international rankings, a graft watchdog announced Thursday, warning the government to act or lose its competitiveness.

The UN's Asia-Pacific Human Development Report highlighted an International Country Risk Guide finding which saw Malaysia decline from a score of 4.00 in 1996 to 2.38 in 2006, with a lower score representing greater corruption.

Corrupt political systems tend to weaken economic growth, because they indirectly charge additional taxes on the economy. Every payment to a corrupt officer to obtain a service is considered a tax. The more taxes on a economic system, the lower economic growth, because resources are shifted away form highly efficient parts of the economy to less efficient - and corrupt - parts of the economy."