Malaysia can no longer rely on foreign direct investment (FDI) as an engine for growth, and thus local businesses need to expand into big industries to sustain economic growth, said former prime minister Dr Mahathir Mohamad.

In a blog article titled "A New Economic Policy" today, Mahathir said Malaysia was among the first few newly independent countries with a successful FDI programme but noted that the country now faces stiff competition from other countries offering cheaper labour and tax incentives.

Mahathir proposed that Malaysia could emulate...