By 2050, Asia may become the wealthiest region of the world, accounting for up to 50 per cent of the global gross domestic product (GDP), trade and investment. The continent currently accounts for around 27 per cent of these.
This was predicted in the Asian Development Bank’s report entitled “Asia 2050 – Realizing the Asian Century” presented during the ADB’s 44th Annual Meeting held recently in Ha Noi, Vietnam.
Grounding this dream of a very prosperous Asia, however, is contingent in the region’s success in efforts to reduce corruption and improve government accountability.
Other factors that will contribute to the realization of this bright future are: technological change, labor, capital, the emerging middle class, climate change, and the communications revolution.
ADB’s recommendation, according to the report, is for Asia to “modernize governance and retool its institutions with an emphasis on transparency, accountability and enforceability.” It pointed to Japan, Singapore and South Korea as models for other Asian countries to follow.
According to the report, Asian countries could only fall into two alternative scenarios: the Asian Century and the Middle Income Trap.
In the more optimistic Asian Century scenario, the region’s gross domestic product (GDP) would soar to USD $148 trillion and account for 51% of global output in 2050. On a purchasing power parity basis, GDP per capita in Asia would rise to USD $38,600, compared with the projected 2050 global average of USD $36,600.
The other, less optimistic projection assumes that Asia’s fast-growing economies—the PRC, India, Indonesia, and Viet Nam—will fall into the middle income trap of slowing growth rates and stagnating income levels over the next 5 to 10 years. Furthermore, none of Asia’s slow-growing economies would manage to accelerate its growth rate under this scenario. If these events occur, Asia would account for only 32%, or $61 trillion, of global GDP in 2050. On a purchasing power parity basis, GDP per capita would rise to only $20,300, or just over half of that under the Asian Century scenario.
“The difference in outcomes under the two scenarios and thus the opportunity cost of not realizing the Asian Century scenario is huge, especially in human terms,” Mr. Kuroda said. Under the Asian Century scenario, almost 3 billion additional Asians would enjoy the fruits of prosperity at least one generation earlier than under the Middle Income Trap scenario.
“The difference in outcomes under the two scenarios and thus the opportunity cost of not realizing the Asian Century scenario is huge, especially in human terms,” said ADB president Haruhiko Kuroda.
– from Pera-isipan news, Philippine Online Chronicles, May 26, 2011