KUALA LUMPUR (Jan 4): A growing middle class is Malaysia's best bet against corruption, says former World Trade Organisation director-general Pascal Lamy.

"Growing the part of your population that pays taxes is the best way to fight corruption," said Lamy, who is also on the advisory council of Transparency International.

This has proven to be effective in the medium to long term, on top of proper regulation, more transparency, and more rules about conflict of interest between business and politics, he said.

"There is a direct connection between growing your economy and getting rid of corruption," he said, pointing at the economic growth of Singapore and Rwanda, which have seen corruption diminish amid strong economic growth.

Lamy was speaking to reporters after speaking at a seminar on the importance of trade amid rising protectionism organised by the Institute for Democracy and Economic Affairs (IDEAS).

He said an economic system is more efficient when its actors are able to act in a transparent way, and information circulates without asymmetry.

He noted that Malaysia is roughly on track to achieve high income nation status, as it has developed and followed a clear strategy.

However, the country would have to redirect its resources to improve education and human empowerment instead of relying on natural commodities in order to continue growing, Lamy said.

Meanwhile, as inequality typically rises in tandem with economic development, this could see tough decisions that may be "painful for some" made in the near term, he added.

Lamy stressed that when a country becomes more economically developed, it should begin to allocate more of its resources to healthcare and education.