JUDGING by the strong performance of Malaysia's economy in recent years, there is every likelihood the country will join the ranks of the industrialised nations by 2020, as envisaged by Prime Minister Datuk Seri Dr Mahathir Mohamad. Between 1988 and last year, the country's growth rates have been impressive, averaging nine per cent per annum. To top it all, Malaysia's economy outperformed all the ASEAN (Association of Southeast Asian Nations) countries and the Asian Newly Industrialised Economies (NIEs) in terms of real growth last year. The growth momentum was sustained by a revival in agricultural output, as well as continued strong growth in the manufacturing, construction and services sectors. Progress was also achieved on the fiscal front. As a result of tight budgetary controls amid an expanding economy, the current account of the Federal Government budget registered another sizeable surplus of M$2.2 billion (about HK$6.6 billion), compared with M$2.8 billion in 1991. The overall budgetary deficit also declined to 4.5 per cent of Gross National Product (GNP) from 4.6 per cent. And, for the first time in many years, the nation's external debt level fell below the international reserves of the central bank. Malaysia's leaders have carefully charted the country's course, moving it from being a commodity-dependent economy, subject to wild swings in market prices and demand, to a sophisticated manufacturing economy. Rapid industrialisation has led to an increasing share of the manufacturing sector's contribution to Gross Domestic Product (GDP). The sector's contribution, which was only 19.6 per cent in 1980, had risen to 28.8 per cent last year. This year, it is expected to strengthen to 30 per cent. The manufacturing sector provided the main impetus for growth during the past two decades and is expected to expand at a rate of 10.5 per cent per annum during the 1990s. This rate of growth would raise its share in GDP to 37.2 per cent by the year 2000, while manufactured exports are projected to account for 81.8 per cent of total exports. The country's present emphasis is on high technology, capital-intensive and skills-oriented industries. In fact, the switch to manufacturing has been so successful that overall economic growth will not be hurt despite primary commodities prices - long the mainstay of the country's economy - plunging to their lowest levels in years. Rubber prices are around their lowest since the early-1970s, while tin is at all-time low. Cocoa has also slumped. Malaysia was the world's top producer of rubber and tin until a few years ago, when it cut back production, mainly due to rising production costs and poor prices. Bearing testimony to the country's success are 3,000 international companies from more than 50 countries which have made Malaysia their offshore production base. These firms were attracted to the country because of the good infrastructure, abundant and cheap labour and political stability. During the economic expansion of the 1980s, the government created and promoted industrial estates and free trade zones throughout the country, offering a number of incentives to attract foreign investors. The moves reaped huge dividends. Between 1988 and 1991, direct foreign investment comprised about 54 per cent of the country's total investment. Although foreign investment fell in the first five months of this year to $1.4 billion from $4.4 billion last year, there is every sign that the country's growth will stay on course. International Trade and Industry Minister Rafidah Aziz said last month: ''The decline in foreign investments is a normal trend when compared with 1990 and 1991, when the level of investments from foreign companies was very high.'' Latest figures released by the central bank last week, showed the country's economy remained resilient. A revival in manufacturing output took economic growth to above eight per cent in the first quarter of the year, against the bank's forecast of 7.6 per cent. Growth in gross domestic product stood at 8.1 per cent between January and March, compared with 7.1 per cent in the preceding quarter and 8.9 per cent during the corresponding period last year, said the bank in its quarterly bulletin. Inflation, meanwhile, eased to 4.4 per cent from five per cent in the preceding quarter. On the trade front, Bank Negara said the country managed a surplus of 1.7 billion ringgit compared with the 2.4 billion ringgit surplus in the preceding quarter. The bank said this was the fourth consecutive quarter that the country had scored a trade surplus. Given this impressive set of statistics, Malaysia's economy looks set for another year of strong growth.