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SINGAPORE: Singapore's Prime Minister Lee Hsien Loong on Friday said the country's financial system is sound, and its economy remains competitive despite slowing down.
Mr Lee was speaking at a conference of overseas Indians held in Singapore.
He cautioned that with the ongoing financial storm, Asian countries must prepare for a rough ride at least over the next year and quite possibly longer.
Mr Lee said it will take time for the fear and panic gripping financial markets to subside, and the problems facing financial institutions in the US and Europe are complex and grave.
The Prime Minister said: "The trust and confidence between banks, which lie at the heart of finance intermediation, will take time to restore. The crisis in the financial system will dampen consumption and investment in the developed countries and affect growth all over the world."
While Asian banks have avoided the problems afflicting the US and European banks, globalisation has meant that Asian equity markets have been hit by the events in Wall Street.
As a result, Mr Lee noted that Asian countries cannot avoid the impact of weakening US, European and Japanese economies.
For Singapore, Mr Lee noted that over the last few years which saw good economical conditions, the country had pressed on with upgrading and diversifying the economy.
"This will mean new and better jobs, even if some old ones are lost," he said. "The momentum from projects that we have secured will help to see us through this storm."
He added that Singapore's strategy of growing with Asia also remains valid as the country believes Asia's dynamism will endure. One way is by linking up with India through its diaspora, which numbers 25 million around the world.
Their members have helped to integrate India into the Asia-Pacific region and made a critical contribution to the Indian economy by remitting US$27 billion back to India each year.
- CNA/yb
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