It is crucial for Malaysia to balance material achievements with good social values to achieve the goals of Vision 2020, said Prime Minister Abdullah Ahmad Badawi.

He said the time has come for greater emphasis to be given to the development of knowledge, skills and values to complement the progress made in hardware and infrastructure.

As such, human capital development would remain a priority and focus would be given on producing individuals for both the workplace and society, said Abdullah, who is also finance minister, in his preface in the annual economic report released by the Finance Ministry today.

He said Malaysians must uphold the values of honesty, integrity, excellence and social responsibility as well as cultivate first-class mentality in order to match the country's first-class infrastructure.

"Malaysians must also continuously strive to be relevant, resilient and competitive in line with the approach of Islam Hadhari," he was quoted as saying in a Bernama report.

The prime minister said the rakyat also need to spur a passion for lifelong learning, seek excellence and to continuously strive for better and higher standards.

"We must promulgate a culture of high performance. The task of keeping the nation firmly on the path of strong growth is enormous and challenging.

"I am confident that we can become a truly developed nation, imbued with noble values if we are committed and make determined efforts," he added.

The challenges ahead

Abdullah said 2005 marked the end of the Eighth Malaysia Plan and the creditable growth for the year would provide a strong foundation for the nation as it moves into another important phase that is the Ninth Malaysia Plan (2006-2010).

He said as the country enters 2006 the external and domestic challenges would continue to test the country's strength and resilience.

"In this era of globalisation, we cannot isolate ourselves lest we be marginalised. For survival, we need to increasingly engage ourselves and to integrate into the global environment.

"In this respect, we have to expand our horizons and reach out to become global players, especially in areas where we have a competitive advantage," he added

The prime minister said the Malaysian economy had shown much resilience over the years after the Asian financial crisis in 1997/98 and has recorded continuous, stable and steady growth.

He said the economy has become more diversified and broad-based as a result of deliberate policy and strategic measures, which have provided the basis for more secure and stable growth.

More importantly, he said the expansion of the economy was helmed by the private sector whilst the government stayed on course in its fiscal consolidation.

Commendable growth

Private investment turned positive and continued to rise for the third consecutive year since 2003, reflecting that the private sector has resumed its role in driving growth, he said.

Abdullah said the government continues to have confidence that the nation's more diversified economic structure would help Malaysia weather the slower global growth for 2005.

"Despite slower world growth this year, the Malaysian economy is expected to chart a commendable five percent growth on the back of strong domestic demand, sustained commodity prices and supported by a healthy banking system," he said.

Abdullah also said the current account remained in surplus for 93 consecutive months through July 2005, with high international reserves and manageable external debt.