SINGAPORE and South Korea will 'build a bridge' to facilitate business cooperation beyond Asia into the Middle East where Koreans have a strong presence, says Senior Minister Goh Chok Tong.

'Both governments will encourage the private sector to work together to invest in other regions such as the Middle East,' SM Goh told the Singapore media yesterday at a door-stop interview in Seoul after he met South Korea president-elect Lee Myung Bak at the latter's office.

There are some 700 Korean companies in Singapore engaged in international trade, logistics, electronics, construction and engineering business.

Yesterday was the final day of his four-day working trip to South Korea that included a visit to the Kaesong Industrial Complex in the North.

Mr Lee, who was busy with preparations for his inauguration ceremony tomorrow, took time off yesterday for a 'mutually beneficial' discussion with SM Goh. He also thanked Singapore for the 'tremendously helpful' act of recognising Kaesong products as made in South Korea under the bilateral Free Trade Agreement signed in 2005.

SM Goh noted that both countries face similar challenges. Like Singapore, which faces stiff competition from its neighbours, South Korea is 'sandwiched between high-tech Japan and emerging economic power China'.

The two leaders agreed on the strategies needed to meet the challenges, including going global in their operations.

'We must have a business-friendly environment that creates jobs and brings in investment,' said SM Goh.

That, however, is not enough in the new world where new ideas are needed to create wealth. 'We need to innovate and generate new ideas to create wealth,' he said.

Hence there must be investment in people through education, training and re-training in both countries, which lack natural resources.

SM Goh said: 'We know what we need to do. The key is implementation.'

Mr Lee has shown a keen interest in South-east Asia, where he had been involved in major construction projects. As the chief executive officer of Hyundai Construction in the 1980s, he helped to build bridges in Malaysia and Thailand and also played a part in the construction of Marina Centre in Singapore, which he visited several times.

Last month, he told ambassadors from Asean countries that he wanted to strengthen ties with the region and would visit it 'soon' after his inauguration.

SM Goh is confident the incoming president has the qualities to quickly grow the Korean economy - a key election pledge - within the next two years.

'He is a pragmatic man who can deliver on what he has decided to do,' said SM Goh.

'Once he has the ideas, he will be able to work out the details and implement his policy.'

Yesterday afternoon, SM Goh toured the Incheon Free Economic Zone, an area one-third the size of Singapore, set up in 2003 by the Korean government to attract foreign investment and international companies.

Mr Goh flew back to Singapore last night.