20/07/2011 (Reuters AlertNet) - Malaysian Prime Minister Najib Razak has promised a series of changes to overhaul the economy and public service to draw investment and transform the country into a high-income nation by 2020.

Since taking power in 2009, Najib has welcomed more foreign investment and sold down stakes in state-linked firms but analysts say the government must move faster if it wants to catch up with its neighbours.

Below are the key changes Najib has promised:

POLITICAL/SOCIAL REFORMS ************************ - restructure the affirmative action policy favouring ethnic Malays to ensure only the needy receive preference in jobs, education and business;

- review laws that allow for detention without trial;

- improve the voting process to ensure free and fair elections;

- reduce crime including curbing street felonies and boosting the criminal justice system;

- fight corruption by improving confidence in regulatory and enforcement agencies and reducing leakage in government procurement;

- develop the education system by increasing the pre-school enrolment rate and having high-performing schools;

- improve living standards of the poor by encouraging entrepreneurship and providing low-cost homes;

- improve rural infrastructure such as building roads, restoring houses and providing water and electricity to remote areas;

- improve urban public transport by increasing the capacity of suburban train services and reducing journey time;

- create a united society irrespective of race and religion through the 1Malaysia concept;

- Set up a youth parliament by 2013 to seek the views of the young.

ECONOMIC REFORMS **************** - The Economic Transformation Programme is the bedrock of Najib's reforms to transform Malaysia into a high-income nation by 2020. The goal is to lift the country's gross national income per capita from $6,700 in 2009 to more than $15,000 in 2020. Under the programme, the government aims to attract $444 billion of investment by 2020. The government will focus on 12 areas to drive economic growth including energy, palm oil, financial services, tourism, business services, electronics, retail, education and health care.

- reduce government subsidies on staples such as rice, sugar, flour and fuel, which are expected to total about $7.8 billion in 2011, or almost a fifth of GDP.

- Implement a goods and services tax at a base rate of 4 percent to replace an existing sales tax. The goods tax is expected to generate around $2.9 billion in revenue annually.

- open up the economy to increased foreign competition. In 2009, Najib liberalised 27 services sub-sectors to foreign investment, including health, social services, tourism, transport and business services. He has allowed for increased foreign stakes in investment banks and insurers, but kept limits on commercial banks.