Singapore said on Friday the global financial crisis, which has had a debilitating impact on world economies will take time to subside, but voiced optimism that Asia's dynamism, spurred by the growth of India and China will help the region endure the turbulence.

"Both India and China are continuing to transform their economies and after the turbulence passes, which eventually it will, their emergence in a stable and peaceful region will benefit many other Asian countries," Singapore Prime Minister Lee Hsien Loong told over 800 non-resident Indians from 20 countries gathered here for the Prawasi Bharatiya Divas.

He cautioned that Asian countries must be prepared for 'a rough ride at least over the next year and quite possibly longer' and said the problems facing financial institutions in the US and Europe 'will not be solved overnight'.

The conclave is being held at Singapore, the first Asian country outside India to host the event. The PBD was held in the US last year.

The two-day meet was formally inaugurated by Lee and India's Overseas Affairs Minister Vyalar Ravi, who lit the traditional oil lamp at the sprawling Suntech city complex.

Noting that the trust and confidence between banks will take time to restore, Lee said Asian banks had been lucky to have avoided the problems afflicting US and European banks.

Describing Singapore's association with India as 'deep rooted,' the premier said many ethnic Indians in Singapore had come as 'humble labourers and plantation workers'.

Singapore's population of four and a half million comprises nine per cent ethnic Indians. The Singapore government has at least half a dozen ethnic Indians in top posts.

"The Indian community in Singapore is vital pillar of our multi-racial community," Lee said.

Ethnic Chinese form the majority component of the population while Malays come in second. Singapore also has 200,000 Indian expatriates, one of the largest expatriate communities here.

Acknowledging that links through the India diaspora had helped the two countries to progressively enhance bilateral relations, Lee said, "India's integration into the regional network benefits immensely from its diaspora."

Meanwhile, Ravi in his address said New Delhi's partnership with Singapore and the ASEAN was based on a shared vision of the future.

"Our vision today is of an integrated Asia in which the benefits of cooperation will far outweigh the costs of competition," he added.

Terming the story of the Indian diaspora as that of 'struggle and success,' Ravi noted that the community was estimated to be around 30 million and spread across 110 countries.

Referring to the current financial turmoil, Ravi said a key lesson to be learnt from it was that sustainable economic growth was far too important to be left entirely to the market.

"The absence of regulation can and does create a moral hazard. Free markets are often prone to manipulation," he noted.

He also cited the financial turmoil as an opportunity to create better regulatory systems and better practices.

"Global financial markets need a coherent set of transparent rules for all of the participants in order to have a fair and orderly market. We must enforce them evenly," he said. 

Lee said Singapore was encouraging its universities and think-tanks to undertake research and promote a fuller understanding of the Indian diaspora.

He announced the setting up of an Indian Heritage Centre which will trace the history of the Indian diaspora in Singapore and how the Indian community had contributed to Singapore's development.