Racism and sectarianism are "difficult challenges" Scotland will continue to face in 2003, First Minister Jack McConnell has warned.

In his New Year message, released on Sunday, Mr McConnell said he was "proud to be a Scot" because of what the country had achieved in the past and was capable of nowadays.

But he warned there was much that still needed to be done in the country.

He said: "But there are still challenges for us today. Children still suffering neglect and abuse. People frightened in their own homes or their own communities. Young people tempted by drug dealers to throw their futures away.

Mr McConnell warned against talking Scotland down

"The difficult challenges many of you deal with every day, because of the colour of your skin or the religion you practice.

"And the challenge to each of us to take responsibility for our own health, to take some exercise and eat more of the foods that will protect us from ill health in years to come."

He added: "My job, the job of government, is to understand those challenges and face them with you."

However, the first minister said people should not "talk Scotland down" and that there were many successes they could highlight.

He pointed to the achievements of business leaders, public sector workers, carers, scientists, athletes, scientists and musicians.

And he added: "We can all do more to highlight success and keep failure and disappointment in perspective."

Mr McConnell also said the Scottish Parliament had "made a start" on issues like free personal care for the elderly, but admitted it had "more to do".