>> abirached: this week on world business we have a special show looking at the emerging economy of malaysia whichhas its sights set on becoming a developed nation by 2020 the series of economic reforms being pushed through to help malaysia catch the wave of recovery and fast track the countrys growth. >>it is very clear, it is an imperative for us that if we nt to achieve developed status by year 2020, we really have to run really fast. >> abirached: we have an exclusive interview with nor mohamed yakcop, head of the countrys economic planning unit on why standing still is not an option... >>we want robust, viable growth and we think we can get it >> abirached: and using sport to drive the region ahead, we drop in at the johor open, held in the vast iskandar economic zone in southern malaysia. >> abirached: hello and welcome. im raya abirached and this is world business, into the globalbusiness trends shaping our lives. this week we bring you a special show from malaysia looking at this increasingly important emerging economy. the world is slowly starting to emerge from recession, but some places are rebounding quicker than others, in particular china, india and south east asia. in order to be part of the leading pack, malaysia is preparing now to ensure growth is both solid and sustainable. our south east asian correspondent rian maelzer is on the ground in the administrative capital of malaysia putrajaya. hello rian... >>thanks raya. its been just over eight months now since najib razak took over as prime minister ofmalaysia, in the midst of the global financial crisis. malaysias economy is heavily dependent on exports and was taking a serious hit. but its been nowhere near as bad as it could have been thanksin part to some aggressive government intervention and lessons learned from previous crises. >>reporter: malaysias economy may have shrunk in 2009. but there has been no sharp rise in bankruptcies or nonperforming loans, and unemployment is only around three and a half per cent. >>reporter: the government lessened the blow by pumping some 20 billion dollars into the economy. but thats notthe whole picture. >>leng: aot of companies actually were better prepared this time round. i think they have actually moved into greater, more flexible manufacturing arrangements to the extent that they are now able to cope with this kind of export shock. they were better capitalized compared to the last crisis and were able to actually withstand the capacity cutbacks. >>reporter: malaysias economy is set to rebound with growth of around four per cent in 2010. but its aiming to attain a sustained growth of closer to six per cent. >>reporter: to do that and to meet its longheld goal dubbed vision 2020 it will have to continue to shift fromlabour intensive manufacturing more into services and technologyintensive industries. >>jala: it is very clear, it is an imperative for us that we want to achieve developed status by the year2020, we really have to run really fast. so we cant run slowly. we have to get results really quickly and then in droves, make sure they are really big. >>reporter: a former senior executive with shell and ceo of malaysia airlines, idris jala is driving efforts to make sure the country meets some critical targets in reducing crime and corruption, improving infrastructure, and improving the education system. overhauling the education system is critical to the goal of moving malaysia up the value chain. german medical devices manufacturer b braun employs 4700 people in northern malaysia. its set to invest around 100 million dollars to expand its research and development operations here and is exactly the type of company the government is keen to attract. >>lim: b braun medical industry is focused into moving the manual lines into more automation and therefore instead of technicians running the manual lines, we now need highly skilled engineers to operate on the automated lines. and we need more skillful people and research people and more talented people to really think out of the box. >>reporter: a shortage of talent is a concern shared by other european iestors in malaysia. >>jones: if you take a look at innovation, it comes back down to the actual creativity and the mindset of thepeople that you actually have. if you come back down to issues such as efficiency and productivity, it comes down to the actual individuals that you actually employ. so every single thing funnels down fundamentally down to the education process. >>reporter: improving the education system will take money. to try to boost revenues and reduce the deficit, the government of najib razak (nahjeeb rahzah) is looking at bringing in a goods and services tax as well as overhauling a costly system of subsidies for fuel as well as food items like sugar. >>ling: so i think this crisis presents us with opportunities to undertake very hard, tough structural reforms that would normally be difficult to implement under normal econom circumstances. so what we are now seeing is that he has rolled out quite a number of tough policies. >>reporter: to try to stimulate investment, the government has moved to reduce impediments to foreign ownership,liberalized more than two dozen service sectors, and is working to slash red tape. >>jones: i think that that is all part of the process of trying to improve if you like the government efficacy and efficiency, and so on, so i think that going forward i think its encouraging. >>reporter: with private investment levels here having halved since the 1998 financial crisis, najibs governmentknows malaysia desperately needs to attract more foreign and domestic investment to achieve its growth targets. >>ling: i think there is some measure of rising confidence. when he first assumed office actuallye set out to be what he called himself as a transformational leader. what we see here is that i think he has set a fairly blistering pace. just that i think what needs to be done is actually to follow through. its the execution that counts. >>report: najib will need his ruling coalition, governmentlinked companies, the civil service and the private sector all on side if malaysia is to successfully shift into the next critical phase of development.as malaysia tries to reengineer its economy, the prime minister has turned to people in the private sector as well as to experienced technocrats like nor mohamed yakcop to craft a new economic blueprint for the country >>sager: malaysia recently raised its economic forecast. can you give us a description of how malaysia has faired during this financial crisis? yakcop: in 199798 we had this major financial crisis, we took action, our own domestic recipe and all came that too and became stronger because of that, because we knew the importance of financial regulation,financial prudence , good governance, financial oversight. ten years down the road, when we face this global crisis, the experience, and lessons and action taken during the 199798 crisis has stood usin good stead. so while the economy was affected by this global crisis, and which economy was not, the extent of our losses was somehow limited. >>sager: it is interesting because you recently said that the economic slowdown was a blessing. what did you mean by that? >>yakcop: we want to come out of this crisis not with anaemic growth -23% we can get, its not a problem but we want robu, viable growth and we think we can get it, and everybody is now putting the thinking cap and thinking out of the box and this would not have happened if it not for the crisis. >>sager: you actually have your hands full right now, you are working on the tenth malaysia plan, which is a five year economic program to ensure sustainable development. what is the strategic direction here? >>yakcop: the strategic direction is the mission 2020. in 1991 the nation made a decisionhat within 30 yearswe want to be a developed country, we want to be a rich country, we want to join the league of developed nations. by then we were already a middle income country and that in itself was an achievementbecause in 1957 when we became an independent nation we were not supposed to survive even or progress, because we were taught to be a country that is so dependent on just two commodities, rubber and tin, but that was not our vision, our vision was to be a developed country: high and middle income is good, but not good enough. and given this economic malaise in the last couple of years, it was really tempting on our part to sit back and say look, the world is undergoing a major crisis, described to be as bad as the 1930 crisis, so can we not postpone 2020, mision 2020 to 2025 or 2030? that would have been the line of least resistance, that would have been the easier route, but we said no, we said we are going to achieve mission 2020 and we are going to do it and the only window that we really have is that tenth malaysia plan. because if we do not bring back the growth rate and the momentum back to track now in the next five years, nothing that we do in the second 5 years will bring us to the mission 2020. >>sager: and in order to achieve this you are really looking at at least 5% growth over this period. >>yakcop: 5 and a half percent >>sager: 5 and a half. what are the key sectors that you are looking for to driving this in the economy? >>yakcop: malaysia the first category is the easy beans: we are just going to make the whole business of government, the whole bureaucracy efficient, effective, and we are going to do all it takes, really doit and the prime minister has said it in no uncertain terms that he will tolerate no nonsense and he just wants it done. that itself should really add a couple of points to growth, if we do not do anything else. the other aspect which is a little bit more complex is that we have been very used to anew cost based economy model. although we maybe cheap, others are now cheaper. india was not there in 1970, china was not open, vietnam was not open. now they are open and cheaper, we cant even compete if we want to, we dont want to, but even if we want to, we cant compete. but worse, these countries which are cheaper now are leap frogging on the technology curve and so for us there is no option but to really move up the curve. so we have to make sure that the fdis are coming and the investment, our domestic investors move up the value chain, where the value added is big, large, where the, itis based on knowledge, the economy is based on innovation, it is based on creativity, that sort of thing. so that we have to do it, and we have to be more selective in what incentives we give to which companies. but we have decided to do it and that is the way forward. >>sager: so let me just end on a quote by you because you said there are some battles than can be won, there are some battles that must be won, and some battles which cannot be won. which battle are you intenton winning? >>yakcop the battle to put our economy back on the growth momentum of 5.5% a year for the next 10 years. comewhatever may, that battle we must win. >> abirached: still to come on world business... italy to india, region to region ainnovative meeting gets underway. and asias top golfers take on the johor open. >> abirached: 2009 was a big year for asian golf and golf in general. for the first time ever an asian, south koreas y.e. yang, won one of golfs majors. and for the first time in more than a century, golf was reinstated to the summer olympics. asian tournaments including malaysias johor open, have been riding onthat success despite the tough year for the global economy. >>reporter: stifling heat