Asia will contribute 45% of global gross domestic product and 35% of world trade by 2020, when 90% of its people will live in “middle income” countries that will have overcome absolute poverty. This is according to an expert panel set up by the Asian Development Bank to visualise Asia in 2020 and come up with a strategy for the bank’s future growth and focus.
The panel, chaired by Supachai Panitchpakdi, secretary general of the UN Conference on Trade and Development, has said in the report (released in Tokyo recently), that policymakers in Asia face a radical set of challenges that arise out of economic success. The report said this could test the countries, several of which have just graduated from fighting widespread poverty.
The report listed its reasons for believing in the Asian growth story: the continent is capital-surplus and attracts large inflows, a trend that will likely continue; its 15 economies had $3.1 trillion or 62% of global foreign exchange reserves in December 2006; and it has high domestic savings rates, averaging 30-40%.
The rapid rise of major economies, especially China and India, meant that they would have to start addressing issues related to carbon emissions, natural resources and energy use, and security soon, said the report.
The report suggested that ADB change itself to cope with the the massive structural transformation Asia is going through. It identified six core areas where this needs to be done: infrastructure development, particularly public-private partnerships; financial sector development; energy and environment activities focusing on global issues, such as climate change; regional integration; technological development and innovation; and knowledge management.
The report envisages a more nimble ADB, with clusters of technical staff housed in hubs in major Asian business and academic centres.