Singapore and Malaysia must strengthen their natural synergies, said Minister for Trade and Industry, Lim Hng Kiang, in a speech made during a seminar for business opportunities in Malaysia.

“I would like to encourage businesses in Singapore to seize the opportunity to explore and seek out business prospects that will play to the natural synergies between Malaysia and Singapore,” said Mr Lim.

The minister said companies could tap of the strength and resources in each country to enhance their companies’ products, services and competitiveness.

Companies could also explore the possibility of integrating value chain processes across Malaysia and Singapore to profit from the comparative advantages offered in both countries.

Malaysia has consistently ranked as one of Singapore’s top trading partners.

Singapore’s neighbour showed a strong recovery from the recent global economic downturn and posted an impressive 10.1 per cent year-on-year growth in the first quarter of 2010.

This was Malaysia’s fastest pace of quarterly growth in ten years, setting on track its full-year economic growth to reach 6 per cent for 2010.

IMD’s World Competitiveness Yearbook 2010 recently ranked Malaysia the eighth most competitive economies in the world, jumping eight notches from its previous position of 18th in 2009.

Earlier this year, Malaysia’s Prime Minister Najib Razak announced the New Economic Model, or NEM that lays out the framework for Malaysia to become a
developed economy by 2020.

“It is a clear indication of Malaysia’s efforts to foster a business-friendly environment,” said Mr Lim.

“As the Malaysian economy grows and develops, businesses can also expand the scope and scale of your services to serve the Malaysian market. The possibilities are manifold. Indeed, business linkages between our two countries have traditionally
been strong and are set to grow even stronger.”

Bilateral trade between Singapore and Malaysia rebounded strongly with the global economic recovery to reach S$52 billion, marking an increase of almost 36 per cent over the same period last year.

“[First], both countries stand to gain from the increased growth opportunities and business activity. [Second], companies’ chances of success are bolstered by the natural comfort they enjoy in navigating the familiar operating environment in both
locations,” said Mr Lim.

Additionally, the Malaysian Investment Development Authority showed that Singapore was the largest investor in Malaysia for the first four months of 2010, contributing RM1.79 billion worth of manufacturing-related investments.

Mr Lim also urged businesses to consider opportunities through an ASEAN economic integration.

Through an ASEAN Economic Community, ASEAN aims to achieve a free flow of goods, services, and investment that will lead to a more integrated and vibrant region by 2015.

ASEAN currently represents a market of over 550 million people, with a total trade of US$1.6 trillion.

“Companies should draw on the complementary strengths between Malaysia and Singapore to develop business propositions that ride on ASEAN’s growth and cater to its sizeable market,” Mr Lim stressed.

He said that economic synergies between Malaysia and Singapore could serve as a stepping-stone towards ASEAN integration and the Singapore-Malaysia success
story can provide an early template for companies to tap into cost-competitive resources across the whole of ASEAN.

“Our inter-connectedness, in terms of geographical proximity, established business relations, and familiarity with investing and operating in each other’s country, is a comparative advantage for collaboration that can and indeed, should be exploited for mutual benefit,” said Mr Lim.

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