NEED TO CHANGE ECONOMIC MODEL, SAYS MINISTER

PUTRAJAYA, May 7 (Bernama) -- Malaysia needs to move its economy from a
middle income to a high income model by focusing on domestic consumption and
diversifying exports to leverage on the growth of China, India and Middle East.

In stating this Thursday, Minister in the Prime Minister's Department, Nor
Mohamed Yakcop, said there is an increasingly ambitious target to sustain
economic growth of 7.5 percent and this is only possible if the economy is
re-energise towards higher income and growth trajectory.

"We need a model which is more relevant to current times. To move to a
higher income-based economy, we have to move towards a knowledge- and
innovation-based economy where skilled labour is needed," he said during a
brainstorming session with a World Bank experts team to develop strategies
towards higher growth and income.

"We are trapped in a middle income gap," Mohamed Nor said.

He said the new economic model based on higher growth and income will be
ready and implemented when announced by Prime Minister Najib Tun
Razak.

Arizona State University's economics professor, Edward C. Prescott, said to
move the economy to a higher growth and income model, Malaysia needed the
commitment of the people.

"However, there may be some resistance to change," he told reporters after
the brainstorming session.

Prescott, a Nobel Prize winner in economics, is a member of the World Bank
experts team.

Another member, Brookings Institution's Wolfensohn Centre for Development,
Global Economy and Development's senior fellow, Homi Kharas, said there is an
impetus for change and rethinking on policies and strategies in Malaysia every
10 years based on economic developments.

-- BERNAMA