Asia is in the midst of a truly historic transformation,
according to the Asian Development Bank (ADB). If it continues to grow on its
recent trajectory, it could, by 2050, account for more than half of global Gross
Domestic Product (GDP), trade and investment, and enjoy widespread affluence.
Its per capita income could rise sixfold to reach the global average and be
similar to European levels today (though Europe and North America will remain
much richer in per capita terms).
The bank says the rise in prosperity holds the promise of making
some 3bn additional Asians, hitherto commonly associated with poverty and
deprivation, affluent by today’s standards. By nearly doubling its share of
global GDP (at market exchange rates) from 27% in 2010 to 51% by 2050, Asia
would regain the dominant global economic position it held some 250 year ago,
before the Industrial Revolution. Some have called this possibility the
However, the ADB warns that only if Asia sustains its present growth momentum
and addresses daunting multigenerational challenges and risks, will it achieve
its elevated status.
The overview of a draft report, “Asia
2050—Realizing the Asian Century,” was unveiled at ADB’s 44th Annual
Meeting in Hanoi, Vietnam on Wednesday and will be a topic of discussion among
participants at the Governors’ Seminar, including the finance ministers of
Bangladesh, France, India, and South Korea and the vice finance minister of
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 GDP would soar to $148trn 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
The alternative scenario assumes that Asia’s fast-growing economies --
China, India, Indonesia, and Vietnam - - 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 $61trn, 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,” Haruhiko Kuroda, ADB president, said.
Under the Asian Century scenario, almost 3bn 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 900m 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.
The draft report overview was prepared specifically for ADB’s 2011 Annual
Meeting. Following discussions of the report at the gathering, a comprehensive
book will be published in August.
Finfacts article 2010:
Globalization and Asia’s return to economic supremacy