SINGAPORE - Singapore and Malaysia signed an agreement here today that will help their business people organise joint investment promotions in third countries in another sign of improving bilateral ties.

The first joint mission will be in Indonesia on Aug 22-24, followed by a trip to Vietnam and Cambodia from Oct 10-14, a joint statement said.

Missions to India, China, Hong Kong, Russia and the Middle East are in the pipeline.

Singapore Trade Minister George Yeo and his Malaysian counterpart, Rafidah Aziz, signed the Agreement on the Malaysia-Singapore Business Development Fund (MSBF), which replaces and expands an earlier accord.

The new agreement establishes a fund totalling RM10 million which will be used to help Malaysian and Singapore companies carry out feasibility studies and organise joint missions.

Business people from the next-door neigbours who attended a seminar here Friday have also agreed to form a Malaysia-Singapore Business Council.

"We hope to see more such increased joint missions to third countries over the next few months," Yeo said in a speech to the seminar.

"Malaysian and Singapore businesses should actively combine their strengths to become more competitive globally," he said, citing vast opportunities in the rest of Southeast Asia, China and India.

Business opportunities

Rafidah said the best strategies to deal with India and China would be to view them not only as competitors but also as opportunities.

"China and India are huge markets unto themselves; we should never ignore that," Rafidah told reporters.

The signing of the agreement is another sign of improving ties since Malaysian Prime Minister Abdullah Badawi was elected in March.

Abdullah succeeded Dr Mahathir Mohamad, whose outspoken comments on several unresolved bilateral issues such as the price of raw water Malaysia sells to Singapore had soured relations.

Yeo noted in his speech that "there is a strong political will to improve bilateral relations" on both sides, and that "the economic relationship between Malaysia and Singapore should become stronger in the coming years."

Rafidah said ties with Singapore had generally been good, except on certain issues that required negotiations.

"In the process (of the negotiations) there have been, I would say, remarks made on both sides but that doesn't detract from the fact that our relationship has always been good," she said.

She also played down suggestions the leadersip of the more diplomatic Abdullah led to the improved atmosphere in bilatral ties, noting that the previous government had resolved many of the contentious issues.

Water issue

Ciitng the water pricing dispute, Rafidah said "we know where we are already.

"The days of having to clarify, having to send up notes and booklets to explain are all over. Perhaps the new prime minister has a better environment in which to approach these things. Much of the hassle are things of the past."

Last year, Malaysia was ranked Singapore's top trading partner, while Singapore was one of the five biggest foreign investors in Malaysia.

Singapore and Malaysia together account for more than 60 percent of trade within the 10-member Association of Southeast Asian Nations (Asean). - AFP