By the middle of this century, an additional 3 billion Asians could enjoy higher living standards, but only if Asia sustains its present growth momentum and addresses daunting multigenerational challenges and risks, says a new report commissioned by the Asian Development Bank (ADB).
The draft report says that as the global economy’s center of gravity shifts toward Asia, the region could account for about half of global output in 2050, up from the current 27%, as well as half of global trade and investment.
The overview of the draft report, “Asia 2050—Realizing the Asian Century,” was unveiled at ADB’s 44th Annual Meeting in Ha Noi, Viet Nam. The draft report compares the potential outcomes for Asia under two competing 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 $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 $38,600, compared with the projected 2050 global average of $36,600.
The alternative scenario 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,” Kuroda says.
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.
While developing Asia has made significant strides in tackling income poverty, non-income poverty still remains pervasive. For example, half of all Asians live without basic sanitation while 900 million people in the region have no access to electricity.
The draft report highlights the challenges and risks that lie in the path of Asia achieving its development potential by the middle of this century and outlines the corresponding strategic decisions and actions facing Asian policy makers at the national, regional, and global levels.
MORE ARTICLES ON ECONOMIC OUTLOOK