In 1989 Singapore maintained both economic and diplomatic relations with the Soviet Union. From the mid-1960s until the mid1970s , Singapore's leaders promoted trade relations with Moscow in the belief that a Soviet role in Southeast Asia would ensure the permanent interest of the United States in the region. The Soviet Union was viewed as a major power and as a counterweight to China, and, therefore, as a significant factor in maintaining the regional power balance. This view changed when the Soviets established a military presence at Cam Ranh Bay in Vietnam, following the signing of the Soviet-Vietnamese Treaty of Friendship and Cooperation in November 1978, and actively supported the Vietnamese invasion of Cambodia a month later. At that time, according to Singapore, Moscow became a threat to regional stability.

Soviet diplomacy toward the region changed, however, in the mid-1980s under the leadership of new geeneral secretary Mikhail Gorbachev. Beginning with a milestone foreign policy address in Vladivostok in July 1986, he initiated extended ties with the ASEAN states and committed the Soviet Union to playing a more constructive role in resolving the Cambodian issue. His interest in improving ties with the region and his new emphasis on Soviet economic development acted to modify regional perceptions. Singapore, as well as many of its ASEAN partners, became increasingly receptive to upgrading their bilateral relations with Moscow.

Trade, banking, and shipping were the three critical areas of Singapore's economic ties with Moscow. Singapore's exports were mainly in the form of repairs to Soviet vessels in Singapore shipyards. Other exports included rubber, coconut oil, and fuel oil. In return, the Soviets exported fish and fish products, cast iron, light machinery, and crude oil. Beginning in the mid-1980s, the Soviets encouraged Singaporean firms to invest in joint ventures in the Soviet Union. Singapore's shipyards were reported in 1988 to be interested in reconstructing and developing the port of Nakhodka, the second largest port in the Soviet Far East after Vladivostok.

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Source: U.S. Library of Congress