Singapore and the Republic are rivals for direct foreign investment, particularly in the electronics and pharmaceutical sectors, and for skilled workers, but we can learn from each other, Singapore Prime Minister Goh Chok Tong believes.

"We regard Ireland not as a major competitor but as a healthy rival. We are rivals for foreign direct investment but Ireland is only one of a number of countries competing. We are both competing against the rest of the world," he said.

On his first official visit to Ireland this week, Mr Goh told The Irish Times that he believed Irish companies could use Singapore as a gateway into markets in south-east Asia. Singapore is interested in learning how Ireland built up its software sector and sees the Republic as a potential entry point into the European market for its goods and services, he said.

Singapore encourages foreign investment and offers a pro-business environment. Stating that his economy was recovering well from the Asian financial markets crisis, he said it was on track to achieve economic growth of 5 to 8 per cent in the current year.

Mr Goh sees potential for Irish companies to develop partnerships or joint ventures with local companies in a number of sectors including software development, financial services and marketing. Irish software companies could modify some products to penetrate the Singapore and other south-east Asian markets, he suggested.

In 1999, the Republic had a trade deficit with Singapore of £966 million (€1.22 billion), with imports of over £1.3 billion and exports of only £378 million.

Aimed at furthering political and economic links between Singapore and the Republic, the visit involved discussions on bilateral co-operation in areas such as information technology, financial services, e-commerce, education and research.

Mr Goh was particularly interested to find out how the Irish software industry was built up.

"We have tracked Irish performance over the last 10 to 15 years and admire the rapid progress that has been made . . . At this stage, in Singapore, we are asking the question, where do we go from here? We have discovered similarities in our own development model," he said.

After a period of fast growth in the early 1990s, Singapore was hit by the Asian crisis. Singapore learned important lessons from the crisis of 1998/99, Mr Goh explained.

"We have learned the importance of having the right macro policies, both governance at the political level and corporate governance," he said. Another lesson for all the Asian economies was the importance of not opening up their economies before they had the capital instruments in place to manage them, he said.

Stating that Singapore had been less badly affected than other Asian economies, he said he was anxious now to position it for the future.

The financial crisis was a consequence of increasing globalisation of services and trade while at the same time the Internet revolution was accelerating this globalisation, he explained.

"We could either try to protect ourselves from this or embrace it and minimise the negative effects on our society," he said.

In the past, Singapore's rapid economic growth was based on organisational efficiency and adding value with a disciplined workforce and a good environment for business, Mr Goh explained. While these factors were still important they are not sufficient to sustain prosperity for the future, he warned.

"We need companies to create knowledge, to create value, to be more creative. We have to move into new areas where we have not been before. Areas such as information technology . . . we need more software programme writers, life sciences people to create new biotechnology and pharmaceutical products."

Mr Goh accepted that Singapore's education system would have to change to meet the new needs of the economy. "We have produced good students. But we need now to change towards encouraging them to ask more questions rather than giving answers."

On democracy, he said that Singapore was different from the "liberal democracies" in Europe and the US. "Our people have chosen this type of disciplined democracy," he said.

The people vote every five years he said, explaining that the return of his party - the People's Action Party - in election after election was because it had produced the results people wanted in terms of fast economic growth and good living standards.

But he accepted that changing the educational system would lead to social changes. He sees a need to allow "space for alternative opinions" and plans to provide channels where alternative opinions can be examined and put to constructive use.

Mr Goh feels that the Republic and Singapore can share development experiences, with each learning from the problems and success of the other. He feels it is important for two small states competing against much larger countries to find ways to co-operate and help each other.

He hopes the Taoiseach, Mr Ahern, will make an official visit to Singapore in October on his way to the ASEAN conference in Korea.