Countries should look to the example of Malaysia and Singapore in promoting benefits between transnational companies and domestic small and medium-sized enterprises (SMEs), according to the UN Conference on Trade and Development.

In a report, the agency said that these two countries had followed proactive “encouragement” policies to promote SMEs and to create effective links for them with transnational companies.

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Both countries have seen solid levels of investment projects in recent years and are regularly ranked among the top global FDI destinations, according to greenfield investment monitor fDi Markets.

Collectively, the two countries accounted for 509 projects in 2010, equalling $26.25bn in capital expenditure, numbers that easily beat their 2009 levels. FDI into Malaysia and Singapore grew each year from 2005, but experienced its first decline in 2009, largely due to the global economic decline. Regardless, FDI levels in one of the toughest years were still impressive with 475 projects worth $21.76bn in 2009.