ONE is driven by natural resources, the other has very few. One covers a vast land mass, the other is tiny.

Russia - a nation of more than 140 million people - and Singapore may be polar opposites in many ways, but they can achieve much by working together and sharing their respective strengths.

Senior Minister Goh Chok Tong spoke about the potential for the modest but growing relationship between the two very different nations in an address on Day Three of the fourth Russia-Singapore Business Forum held at the Shangri-La.

The forum ended last night.

One of a range of high-level speakers, Mr Goh suggested that by partnering Singapore, Russia could internationalise its economy and diversify away from its dependence on oil and gas.

He identified three key areas in which the two countries can cooperate.

First, innovation, and research and development. As Russia moves to transform itself into a knowledge-based economy, Singapore's strong intellectual property rights regime is an attractive place for Russian firms looking to create and commercialise technologies, he said.

He also encouraged Russian companies to use Singapore to test-bed new technologies for the Asian region, noting that about 25 Russian scientists are already doing research here in partnership with research body Agency for Science, Technology and Research (A*Star).

Russian firms can also capitalise on Singapore's strategic location in Asia and its role as a logistics and services hub to tap the region's growing trade.

He gave the example of Russian oil giant Lukoil, which has chosen Singapore as its regional headquarters.

Third, firms from Singapore and Russia can work together in other countries.

'Russia is strong in innovation and technology, while Singapore has good networks and experience in Asia,' he said.

Russian technology firms can work with firms here to access the emerging markets of South-east Asia, China and India.

He cited TMK, Russia's largest steel pipes maker, that will market its products to South-east Asia using Singapore as a base. Also, premium vodka maker Russian Standard has a marketing deal with a Singapore-based firm.

Still, in a sign that investment ties have a way to go, the Economic Development Board (EDB) said accumulated foreign direct investment from Russia in Singapore is just $40 million with some 200 firms here.

Mr Goh said: 'With the global economy beginning to bottom out, this is a good time for Russian businesses to position themselves for Asia's recovery.'

But despite signs of recovery in the global economy, he also advised businessmen to 'proceed with cautious optimism'.

'While the clouds may be parting, sunny days will be slow in coming... Difficult challenges still lie ahead, and governments have yet to put in place exit strategies to phase out their stimulus packages without upsetting markets,' he said.

Despite Russia's current economic woes, Mr Goh said he was confident 'it will emerge from the crisis renewed, stronger and more competitive' if it continues to maintain a long-term vision of its development.

Russian First Deputy Prime Minister Igor Shuvalov said the financial crisis has shown that there is 'no recipe to build up the best economic model'. He said Russia will take a more cautious approach and work to develop its domestic market, as a cushion against any future crisis.

Also speaking at the forum was Mr Herman Gref, chairman and chief executive of Sberbank, and a former economics and trade minister. He said Russia's priority for economic development was to eradicate corruption and inefficiency.

He said it could look to Singapore as a model for building up strong and transparent government institutions.

He encouraged Singapore-based logistics and engineering firms to invest in Russia to help develop its infrastructure, and noted that his country needed to upgrade its education system to prepare and train workers for a new economy.

EDB managing director Beh Swan Gin, a forum moderator, told The Straits Times that Singapore would be looking to attract investments from Russia's natural resource firms even though they are not sectors EDB has traditionally focused on.

'Our focus will be on the large companies, regardless of the cluster they're from. I think Russia as a market, as a source country for investments, is important enough for us to adopt this approach.'

-end of ST article