He was speaking at the Asia Pacific Economic Cooperation (APEC) CEO Summit in Vietnam. Mr Lee had arrived in Hanoi to participate in the 14th APEC Leaders' Summit this weekend.

Opening up the economy and freeing up cross-border movement of goods and services. These are important aspects of embracing globalisation, according to Prime Minister Lee.

Countries, he says, need to implement sound macro- and micro-economic policies to sustain investor confidence.

These include maintaining sound monetary policies and freer labour markets.

Mr Lee also suggested that governments need to build capabilities for the future to ensure investments continue flowing in.

"These strategic factors are necessary if countries are to make themselves attractive to investments and give their investment promotion efforts the best chance of success," he said.

Speaking to over 1000 top Asia Pacific business leaders, Mr Lee shared Singapore's experience in this area.

"The approach we took in Singapore was to set up the Economic Development Board as a one-stop centre for investors to promote investments into Singapore and to create an environment in which industries can operate flexibly and with minimum red-tape. Other countries have adapted this approach to their own circumstances."

Mr Lee said foreign direct investments have benefited East Asia significantly. But he admitted that to sustain the policy of liberalising the markets is not easy.

An example he cited is that citizens may be worried if foreigners take up local jobs. Nonetheless, he said, globalisation is still the best way forward to create growth and wealth.

"So when governments get together in multilateral groupings such as APEC, our key responsibility is to sustain the cross-border flows of trade and investment and harness the full benefits of globalisation while containing its risks. This is the key to unleashing the growth and prosperity of the Asia-Pacific region."

Responding to a query during a 10-minute question-and-answer session after his keynote speech, Mr Lee cited several key benefits of Free Trade Agreements (FTAs) which Singapore has signed with countries like the US, Australia and Japan.

"What is the advantage to us? It's insurance. In the first place, in case the world trading system runs into trouble we have access into these markets, assured by bilateral agreement. It gives us preferential access because there would be tariff concessions; access in terms of services, movement of people and other trade-related investments and cooperation."

On the sidelines of the APEC Leaders' Meeting, the Prime Minister also met his Japanese counterpart, Prime Minister Shinzo Abe.

It was their first meeting since the Japanese leader assumed the post of Prime Minister.

Officials said the two discussed the revision of the Japan-Singapore Economic Partnership Agreement that was concluded four years ago.

Prime Minister Lee is also expected to make an official visit to Japan in the first half of next year. - CNA/so

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