The government unveiled an ambitious 15-year industrial plan that targets brisk economic growth of 6.3 percent over the period, driven by manufacturing as the star sector.

"The Malaysian economy is targeted to grow at 6.3 percent during the entire Industrial Master Plan 3 period (2006-2020)," the Trade Ministry said in a 766-page report.

"The manufacturing sector will continue to remain an important sector, growing at 5.6 percent annually during the plan period and contributing 28.5 percent to the economy in 2020," it said.

The other two key sectors targeted to spur growth are services and agriculture.

The plan outlines the industrial strategies and policies that Malaysia will adopt in its quest to become the world's first Muslim developed country by 2020.

It said that the economy was expected to grow at 6.0 percent between 2006 and 2010 and 6.5 percent in 2011-2020, against world economic expansion of an estimated 3.5 percent during the 15-year period.

Malaysia posted moderate growth of 4.6 percent during the previous 10-year plan from 1996 to 2005.

The ministry said total trade was targeted to grow three-fold from RM967.8 billion in 2005 to RM2.8 trillion by 2020. Major export items include electrical products, chemicals, machinery and equipment.

Cut dependence on foreign workers

It said that to achieve the targeted growth in the manufacturing sector, investments of RM412.2 billion were required during the timespan, or an average annual investment of RM27.5 billion.

Malaysia hopes to attract some RM2,894 billion in investment - both private and public - during the 15-year period, but admits facing intense competition from China, India and other Southeast Asian countries.

"Some of these countries have the advantage of large domestic markets and greater supply of labour at lower costs," it said.

To compete for foreign direct investment (FDI), it said Malaysia would adopt a more focussed approach to woo investors, including establishing specialised technology parks and continuing with the liberalisation of the services sector.

The report also said Malaysia should cut its dependence on foreign workers. As of December last year, there were 1.8 million foreign workers of which 32 percent were in the manufacturing sector and 8.8 percent in the services sector.