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Sansad TV: Asian Century

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Asian Century:

  • Asia is in the middle of a historic transformation. If it continues to follow its recent trajectory, by 2050 its per capita income could rise six fold in purchasing power parity (PPP) terms to reach Europe’s levels today.
  • It would make some 3 billion additional Asians affluent by current standards.
  • By nearly doubling its share of global gross domestic product (GDP) to 52 percent by 2050, Asia would regain the dominant economic position it held some 300 years ago, before the industrial revolution
  • The term the Asian century refers to the dominant economic and political role that China, India, and their neighbors are expected to play in the 21st century.
  • The concept gained credence following the rapid economic growth of China and India beginning in the 1980s, which propelled both nations into the ranks of the world’s largest economies.
  • Asia was a major driving force in the world’s economy for much of human history. In the 19th century, western economies dominated, powered by the Industrial Revolution.
  • Over the past few decades, the expectation that Asia will regain its place as the engine of global economic growth has gained momentum.
  • Many believe that the 19th century belonged to the United Kingdom and the 20th century to the United States. Now economists are speculating that the 21st century is destined to become the “Asian Century.”

Manage multiple risks and challenges:

  • Increasing inequality within countries, which could undermine social cohesion and stability. For some countries, the risk of getting caught in the “Middle Income Trap” , for a host of domestic economic, social, and political reasons.
  • Intense competition for finite natural resources, as newly affluent Asians aspire to higher standards of living. Rising income disparities across countries, which could destabilize the region.
  • Global warming and climate change, which could threaten agricultural production, coastal populations, and numerous major urban areas.
  • Poor governance and weak institutional capacity, faced by almost all countries.

Global agenda:

  • Asia’s growth and larger footprint in the global economy will bring new challenges, responsibilities, and obligations.
  • The region will need to take greater ownership of the global commons. It will need to gradually transform itself from a passive onlooker in the debate on global rule making and a reticent follower of the rules, to an active debater and constructive rule maker.
  • As an emerging global leader, Asia should act as—and be seen as—a responsible global citizen. When formulating its domestic or regional policy agenda, Asia will need to consider the regional and global implications.
  • It will need to delicately manage its rapidly rising role as a major player in global governance non-assertively and constructively.
  • As Asia becomes the center of the global economy, it will be in its own interest that the rest of world also does well economically and politically. Peace and security throughout the world will be essential for its long-term prosperity.
  • The Asian Century should not be Asia’s alone but the century of shared global prosperity.

Measures needed:

  • Improving infrastructure: Investments are needed to improve the logistical backbone supporting manufacturing.
  • R&D: Incentives are needed to encourage future investments in R&D.
  • Innovation: Large-scale innovation hubs need to be developed to move to manufacture to the next phase and help to capture the demand opportunity.
  • Attract investments: while India is beginning to attract investment from firms across Asia, more needs to be done to realize the potential opportunity of investment flows from other countries.

Conclusion:

  • The Asian century is truly underway. As globalization gives way to regionalism, Asia takes a leading position.
  • India could look to many of the opportunities arising out of the region’s rapid integration and shifting networks and flows to help drive its next chapter of growth.