ADB warns of bumpy road into Asian century

TOKYO — Asia could be as wealthy as Europe by mid-century, but only if it tackles key challenges from inequality and corruption to climate change, an Asian Development Bank (ADB) study said.

On current trends, Asia will make up half the world’s economic output by 2050, and another three billion people will have joined the ranks of the affluent, their incomes matching those of Europe today, states the report that was released yesterday.

But the ADB study also pointed to a paradox — the fact that the world’s fastest-growing region, dubbed “Factory Asia”, is still home to almost half the world’s absolute poor, who earn less than $1.25 a day.

Asia’s decades-long march to prosperity, the study said, is being led by seven economies with more than three billion people between them — China, India, Indonesia, Japan, South Korea, Thailand and Malaysia.

Under the best-case scenario, Asia’s combined GDP — also including poorer nations such as Laos and Pakistan — will rise from $17 trillion last year to $174 trillion in 2050, with per capita GDP of $40,800 in current terms.

But in order for Asia’s rise to be sustainable, the study warns, the diverse region must emulate the past successes of top performers Japan, South Korea and Singapore by promoting inclusive and equitable growth.

“Asia is in the midst of a historic transformation,” said the report, “Asia 2050: Realizing the Asian Century”, commissioned by the Manila-based ADB and launched by its president Haruhiko Kuroda in Tokyo.

However, the study warned that Asia’s rise is by no means inevitable.

“Many see the ascendancy of Asia — or ‘the Asian Century’ — as being on autopilot, with the region gliding smoothly to its rightful place in destiny,” wrote Mr. Kuroda in a foreword to the report.

“But complacency would be a mistake. While an Asian century is certainly plausible, it is not preordained.” — AFP