Prime Minister Datuk Seri Najib Razak says Malaysia is on the right track towards becoming a developed nation.

He cited the government's policies such as fuel subsidy reduction and goods and services tax (GST) that had spurred such progress, to benefit the people.

"During my meeting with him, President Jokowi praised the Malaysian government's measures and remarked that the challenges faced by Indonesia was greater even though its policies were similar to Malaysia," he said.

Najib said this during a dinner function at the Malaysian Embassy here last night.

He is in Jakarta for a three-day working visit beginning yesterday and is scheduled to attend the World Islamic Economic Forum today.

The prime minister said Jokowi told him that Indonesia also provided financial aid to its poor as Malaysia does, and had similarly reduced its fuel subsidy as well as imposed GST, which was higher than Malaysia's.

"Jokowi said the fuel subsidy reduction and GST affected his popularity which dropped by 70 percent but the steps had brought about development benefiting Indonesia and its people," noted Najib.

He said in Indonesia, the savings from fuel subsidy reduction and GST could be utilised for building infrastructure and putting cash into the accounts of the needy.

"We saved RM22 billion from our own fuel subsidy reduction and we are finding an approach to transfer it in the form of aid to the needy," he said.

The prime minister said the aid policy to the needy had vitalised the micro economy, which in turn would contribute to the macro economy.

Meanwhile, he said Indonesia had expressed its interest to emulate the Malaysian government in its policies which had resulted in an economic growth of five percent and a low inflation rate.

He said Malaysia's policies had been acknowledged by a foreign country, "which proved that Malaysia is on the right track".

"Foreign countries regard us highly but there are some among our people who look down on their own country; we must develop the country together...we can do better; our country will progress with everyone's support.

"If there are weaknesses, we improve on them and our focus is on our struggle in fighting for the well-being of the needy," he said.

Najib said Malaysia was currently in 18th position among 140 countries and had strengthened its position to be among the 20 most competitive economies in the world, "which is very encouraging".

He added, Malaysia would continue to expand its cooperation network with Indonesia and help find opportunities for its business community.

The dinner function was attended by former prime minister Tun Abdullah Ahmad Badawi, cabinet ministers and more than 200 Malaysians residing in Indonesia including students.