(Picture: Russia's First Deputy Prime Minister Igor Shuvalov calling on MM Lee at the Istana yesterday. Mr Shuvalov is here for a Russia-Singapore business forum. - LHZB Photo)

RUSSIA can learn from Singapore how to build confidence and trust among investors, Russia's First Deputy Prime Minister Igor Shuvalov said yesterday.

Discussing his meeting with Minister Mentor Lee Kuan Yew, Mr Shuvalov, a former economic adviser to Prime Minister Vladimir Putin, told The Straits Times Russia needs to show the world it can be a stable, thriving potential business market with strong law enforcement.

He said that while political relations between Russia and Singapore are good, business ties are still relatively weak. 'The political climate should go supported by business links,' he said. 'We need to develop that; that's why we're here.'

Mr Shuvalov was invited to Singapore by Senior Minister Goh Chok Tong. Appointed as first deputy prime minister last year, he is the most senior member in Mr Putin's Cabinet.

He is attending the three-day 4th Russia-Singapore business forum, which began on Sunday night with a Formula One viewing party at Swissotel The Stamford.

The forum, at the Shangri-La Hotel, continues today with high-level speakers and panellists including Mr Lee, Mr Goh and Mr Shuvalov himself.

Mr Shuvalov, who also made visits to Jurong Island and Fusionopolis yesterday, is on his first official business visit to Singapore, though he has visited the country before with his wife.

He said: 'Singapore is a very attractive and comfortable place to do business in, with good infrastructure for business people.' He said Russia offers huge potential for Singapore businessmen who can invest in areas such as ports and airports, hotels and the retail sector.

'Each sector where (Singapore) businessmen want to invest in, they can, because it's a completely open market now.'

Russia is Singapore's 30th largest trading partner and total trade between the two countries hit $3.8 billion last year, more than double from 2007. He said that the countries can trade significantly more.

'We consider Singapore as one of the major bases to invest in Asia...Singaporeans can consider Russia as a base to Eastern Europe and the former Soviet republics.'

Russia has been hit hard by the global recession and Mr Shuvalov has predicted the economy will recover fully only in 2012. But he said the biggest challenge to the resource-rich nation is high oil prices, which would make businesses and the whole economy suffer even though revenue is boosted from oil sales.

'Something around US$70 per barrel is ideal,' he said, which would allow companies to invest in new technologies, but keep the Russian rouble stable.

But he said Russia is also eager to transform itself into a knowledge-based economy, and to diversify away from dependence on oil and gas.

'Because (Singapore doesn't) have oil and gas, (it has) to invent something new to survive to develop the economy. It is a a very good example...We will continue to provide to the world oil and gas. It will be our share for global development. But it shouldn't be the major part of our economy. We believe we are able to transform from an oil- and gas-based structure to something innovative.'

Speaking of the post-recession global environment, he said the world will need not just Asia to grow but 'different engines which are all interconnected for global growth'.

'I believe in BRIC (Brazil, Russia, India and China), and even though Russia and Brazil are not the biggest economies, they are very fast-changing and flexible to adapt to global changes.'

-end of ST article