The government on Monday launched a "Talent Corporation" with incentives to woo highly skilled workers to the country, in its latest bid to stem a worrying "brain drain".

Some 700,000 Malaysians work abroad, a valuable group that the government hopes it can harness to drive its goal of turning the nation of 28 million people into a high-income economy by 2020.

"This is just the beginning. With the establishment of Talent Corporation, we will be able to step up our efforts to strengthen Malaysia's talent pool as required for our economic transformation," Prime Minister Najib Abdul Razak said.

"Talent issues are broad and complex, so these goals cannot be achieved by a single agency," he said at the launch of the Talent Corporation which will begin operating in January.

Analysts agree that it will not be easy to reverse the brain drain, which has been caused by a variety of economic, political and social factors including preferential policies for Malays.

Many of the professionals leaving the country are from Malaysia's ethnic Chinese and Indian minorities.

Najib said the government would introduce a new "resident pass" which will give foreign skilled workers, and Malaysians who have relinquished their citizenship, the long-term right to live and work in the country.

The pass - renewable every 10 years and to be implemented from next April - will allow holders to remain in the country without being tied to an employer.

The government will also waive a current ruling that requires students who receive government scholarships to return and work in the civil service, allowing them to serve their bond in the private sector.

Najib said the government was not only targeting the return of Malaysians working overseas - mainly in Singapore and Hong Kong -  but would also focus on retaining talent in the country.

He declined to set a target on how many Malaysians the government hopes to attract back under the new program.

The premier himself will head a board of trustees that will oversee the corporation.

- AFP