The Eighth Malaysia Plan, tabled by Prime Minister Mahathir Mohamad in parliament, envisages 7.5 percent average annual growth until 2005.

Under the theme of "achieving sustainable growth with resilience", it sets policies and budgets to achieve the targets of a 10-year development blueprint unveiled earlier this month.

The three main thrusts include shifting a knowledge-driven growth strategy, transforming the agriculture, manufacturing and services sectors and sharing wealth more fairly to strengthen social stability.

The plan reaffirms the target of giving Malays and other indigenous races a stake of at least 30 percent in the Chinese-dominated business world.

The corporate stake held by ethnic Indians should double to three percent by 2010.

Development spending under the plan is 6.2 percent higher than in the last five years.

The economic sectors get the lion's share of RM50.5 billion. Defence spending is cut by nearly 16 percent to RM10.75 billion, to make up for a higher allocation of RM37.5 billion for the social sector.

The remaining RM11.2 billion is for general administration.

The government's net foreign borrowing is expected to be RM8.3 billion over the next five years, from RM1.7 billion in the past five.

Target achievable

Mahathir told parliament that the 7.5 percent annual economic growth target was achievable despite an expected slowdown this year.

"Developing the country into a knowledge-based economy will permeate every sector and involve the rakyat (people) at large," he said.

"Measures will have to be taken to ensure that society is resilient to withstand the negative influences that may erode moral values as well as affect social harmony and tolerance."

The 659-page plan formulated by the Economic Planning Unit forecast per capita income to rise to RM17,780 in 2005, from RM13,360 now.

Of the RM50.5 billion economic allocation, RM22 billion will be used to improve transport and communications including plans for a monorail for the new administrative capital of Putrajaya and neighbouring Cyberjaya.

The agriculture sector is allocated RM7.9 billion to raise production and cut soaring import bills which hit RM13 billion ringgit last year.

Some RM1.6 billion ringgit is allocated for research and development, and RM10.3 billion to encourage manufacturing and other businesses to move into hi-tech activities. Manufacturing is forecast to grow by an average 8.9 percent a year.

About RM1 billion for Bakun

Six billion ringgit goes to increase water resources. The energy sector gets RM2.6 billion of which RM926 million is to revive the controversial Bakun dam project in eastern Sarawak state on Borneo island.

The goverment will continue its privatisation policy but will emphasise more commercially viable projects and strengthen the regulatory framework.

The plan aims to reduce poverty to 0.5 percent in 2005 from 7.5 percent now.

It allocates RM22.7 billion for education and training. A total of 20,000 new classrooms, four universities and 15 training institutes will be built and 8,000 schools equipped with computers.

A code of ethics will be promoted at schools to counter the Internet's negative influences, which could be a national security threat, it said.

A sum of RM5.5 billion will be used to build 31 hospitals and 172 clinics, while RM4.2 billion is allocated for low and medium-cost housing.