(SINGAPORE) Singapore and Malaysia have more to gain by working together than constantly competing with each other, Malaysia's International Trade and Industry Minister Rafidah Aziz said yesterday.

Speaking in Singapore at a seminar on business opportunities in Malaysia, the minister rattled off figures to show how intertwined the Asean neighbours were.

She said both countries could not avoid working together when 205,000 or so Malaysians work in the Republic, including 120,000 who commute daily.

Conversely, 130,000 Singaporeans visit Malaysia daily.

'That's how close we are,' she said.

Such close ties are also evident at other levels.

Last year, two-way trade jumped almost 10 per cent year-on-year to US$40.1 billion in 2006.

Singapore was Malaysia's second largest trading partner that year, accounting for 16 per cent of Malaysia's total trade.

Top traded items include electronics and electrical products and refined petroleum products.

'Exports via Singapore amounted to US$12.68 billion, or 7.9 per cent of Malaysia's global exports, while the value of imports via Singapore was US$23.14 billion, accounting for 17.7 per cent of Malaysia's global imports,' Ms Rafidah said.

'It is clear that as competition gets more keen, industry competitors and rivals have found it a viable strategy to forge alliances and to work together rather than dissipate resources by competing,' she said.

On the investment front, 196 Singapore manufacturing projects in Malaysia worth a total of $1.6 billion were approved between January 2006 and July this year.

These include 66 projects approved so far this year with a total investment of $759.4 million.

'These links cannot be severed,' Ms Rafidah told an audience of business executives from both sides of the Causeway. 'In other words, we grew together. We are not there trying to kill each other.'

Investment opportunities abound in Malaysia, not only in manufacturing but also in the services sector, she said.

Under Malaysia's Third Industrial Master Plan, the services sector is expected to grow an average of 7.5 per cent a year over the next 15 years and its contribution to GDP is expected to increase to 59.7 per cent by 2020 from 50.8 per cent in 2006.

The sector's total investment target over this period is $300 billion.

Opportunities for Singapore companies are available in business and professional services, integrated logistics, information and communication technology (ICT), education, health and tourism services, Ms Rafidah said.

She also urged Singapore companies to set up operational headquarters in Malaysia which has advantages in terms of a well-developed infrastructure, relatively low business costs, an educated and multi-lingual workforce, attractive investment packages and liberal policies on foreign equity participation and expatriate employment.

Ms Rafidah also highlighted the Iskandar Development Region (IDR) and the Northern Corridor Economic Region as attractive investment destinations.

The IDR, for example, offers incentives for companies in tourism, education, healthcare, logistics and creative industries.

During the seminar, organised by parties including Malaysia's Ministry of International Trade and Industry, the Singapore Business Federation and International Enterprise Singapore, the minister had a candid dialogue lasting about 90 minutes on the concerns of Singapore investors.

She assured them the Malaysian government is stepping up efforts to combat crime and said the situation is not as bad as portrayed in the media.

On red tape in Malaysia, she said it is 'not the norm' and her ministry will do its best to minimise bureaucracy. She also encouraged investors to e-mail her on any difficulties they have doing business in Malaysia so she can get her department to look into the matter.