Despite Malaysia's high-profile anti-corruption crusade, half of the corporate executives surveyed by a global corruption watchdog believe that competitors have obtained business in the country through bribery.
Transparency International said Malaysia scored worst in the 2012
Bribe Payers Survey.
It asked nearly 3,000 executives from 30 countries whether they had lost a contract in the past year because competitors paid a bribe, and in Malaysia, 50% of them said 'yes'.
Second on the dubious honor roll was Mexico, which was at 48%.
According to the Wall Street Journal, Japan was ranked as the world's least-corrupt place to do business, with just 2% of respondents saying they had lost out due to bribery.
Malaysia's neighbour Singapore was second-cleanest, which was at 9%.
Even Indonesia, with a long-standing reputation for corruption, fared better than more-developed Malaysia.
By comparison, 27% of respondents in China said they thought bribes had cost them business, the report said.
"It shows the attitude of private companies in Malaysia, indicating that bribery in the public sector could be systemic and in a sense institutionalized," Paul Low, president of the Malaysian chapter of Transparency International, said.