Foreign Affairs Minister George Yeo and his Malaysian counterpart, Dr Rais Yatim, both agreed yesterday that the two countries should find ways to work together economically while putting aside historical baggage and differences.

Speaking to reporters at the end of a friendly sports meet between the two nations' foreign affairs ministries in Kulai, Johor, on Saturday, Mr Yeo stressed on the importance of cooperation within Asean during the global economic downturn.

'Cooperation between Malaysia and Singapore - which is the single most important economic relationship in Asean - becomes especially important. Where we can work together, to keep each others' economies moving, we should try to do so.'

'In fact, at a time like this when we expect retrenchments on both sides, it is especially important that we find ways to work together,' he said.

Mr Yeo cited Iskandar Malaysia - an economic zone in the southern state of Johor about three times the size of Singapore - as an example of a project that is supported by Singapore and can benefit both countries.

After the meet, Mr Yeo planned to visit Pontian and Kukup to better understand the development in Malaysia and to look out for opportunities for the two countries to work together.

In between badminton, bowling and golf games at the sports three-day meet, the two ministers discussed issues pertaining to economic cooperation and ways to increase the synergy in bilateral relations.

Said Dr Rais, 'Like it or not, Singapore and Malaysia cannot afford to disagree on issues pertaining to our future.'

Read the full story in tomorrow's edition of The Sunday Times.