Malaysia is launching a fundamental change in its approach to managing the economy in a bid to reduce dependence on foreign investment and trade, said Prime Minister Dr Mahathir Mohamad today.

Mahathir, who is also finance minister, said in a preface to the ministry's annual economic report that the time had come to "reengineer growth strategies" because of "volatilities in business cycles of our major investment and trading partners".

The United States and Japan are Malaysia's top two trading partners.

The new strategy would involve "initiatives to vigorously explore and promote our domestic sources of growth. Indeed, this calls for a paradigm shift in our approach to managing the economy," he said.