Abdullah Ahmad Badawi said that any US recession will not have a great impact on Malaysia's economy because "our fundamentals are strong”.

"It is true that at one time we were greatly dependent on the health of the US economy but now with our policy of economic diversification, we have many other export destinations," Bernama quoted him as telling a press conference in Davos last night at the end of his working visit to the World Economic Forum.

For example, the prime minister said, the value of Malaysia's trade with the rest of Asean outweighs that with the US and on top of that, Malaysia has developed strong trade ties with other Asian countries such as China, India, Japan and South Korea.

Abdullah stressed that Malaysia's good economic indicators are very evident.

They include an annual external trade value exceeding one trillion ringgit a year, a high rate of foreign reserves (US$104.3 billion or RM345.4 billion as at Jan 15), Bursa Saham's market capitalisation of more than one trillion ringgit, a strong ringgit at 3.24 to the US dollar and a strong services sector.

The prime minister pointed out that 86 percent of Malaysia's gross domestic product (GDP) is domestically generated, "and this is new development for our economy”.

"This has become one of our economic strengths (as we are no longer acutely dependent on external trade), and these strengths have come from the policies that we have drawn up and implemented which are far-sighted.

"Our strategies and approaches have proven to have brought more benefits than those before. So we will continue with our proven policies."

Asked whether the government needs to take new steps to face external challenges in view of the possible US recession, Abdullah said: "If any measures are needed, we will consider them when the recession occurs."

Google to make a presence

He also said that giant international Internet search engine firm Google, Inc has expressed an interest in establishing its presence in Malaysia because of the country's good information and communication technology (ICT) infrastructure.

Abdullah cited Eric Schmidt, Google's chairman and chief executive officer, as saying that Malaysia also has a very strategic geographical location and its policies are supportive of the company's activities.

Schmidt also told Abdullah that Malaysians are among the most frequent users of Google in Southeast Asia and that the company wants to them to benefit more.

"I hope they (Google) will come as this will add to our strength in ICT infrastructure and facilities," Abdullah added.

On his meeting with Austrian Chancellor Alfred Gusenbauer, the prime minister said both parties agreed to improve their bilateral cooperation in several fields, including trade and economic.

Asked for his views on this year's World Economic Forum, Abdullah said it has demonstrated its effectiveness in generating discussions on world issues.

"Davos this time has proven that it can enable participants to have meaningful discussions on pressing developments that arise even though they are not on the original agenda, such as the hot topic of a possible U.S. recession," he pointed out.

He described WEF in Davos as being responsive to any developments that are related to economic or politics and as a platform for leaders of countries to not only meet each other but also with the private sector and non-governmental organisations.