KUALA LUMPUR (Jan 17): Malaysia can become a first class innovative nation through the reformation of its education system and immigration policies, a US economist said today.

Professor Dwight H. Perkins, who is attached to Harvard University, said this would prompt Malaysians working abroad to return home to serve.

"Make sure you have a law that will make them come back and serve the home country. If they are not coming back, it wouldn't be a loss to the world but to you," he said.

Perkins said this in a special lecture at the University of Malaya entitled "Understanding Malaysia's Growth Rate in Comparison with the Rest of East Asia".

He said Malaysia must strive to become a more innovative nation and not just rely on foreign direct investment to achieve economic growth.

Perkins said Malaysia can maintain an annual gross domestic product (GDP) growth of 3% to 4% by strengthening its education system and raising income levels.

"Once you reached US$20,000 (RM89,250) per capita, then 3% to 4% growth in GDP is expected," he said.