WHILE Asian countries have been posting strong economic growth in recent years, the Asian Development Bank (ADB) has admitted that more needs to be done to turn the “Asian Century” scenario into reality.
On Thursday, ADB President Takehiko Nakao told reporters that under the Asian Century scenario by 2050, Asia will account for 52 percent of global gross domestic product (GDP). Currently, the region only accounts for 32 percent of the global economy.
Nakao said, however, that in ADB’s developing member-countries (DMCs) alone, at a threshold of $3.2 per day using 2011 purchasing power parity (PPP), there are still 1.1 billion poor people accounting for 57.2 percent of the poor in developing countries globally.
“These are about the Asian Century, and I don’t want to emphasize too much on Asian Century,” Nakao said. “There are many things [coming] from the West, and so we don’t need to boast that Asia is dominating the world.”
Nakao’s presentation during the briefing showed that Asia’s GDP reached $26 trillion in 2017. With a population of 4.16 billion, this translated to a per-capita GDP of $6,272.
Under the Asian Century scenario, the GDP of the region would reach $174 trillion. With a projected population of 4.76 billion, this would translate to a per-capita GDP of $36,665.
The share of Asia in global GDP has started increasing in the 1980s. ADB data showed that the peak of Asia’s share in global GDP was in the 1700s when it accounted for nearly 60 percent of global GDP.
However, this share has declined sharply in the 1870s when the region’s share in global GDP was only below 40 percent. By 1913, the share declined to below 30 percent and, in the 1950s and 1970s, reached below 20 percent.
Since the 1980s, Asia’s share in global growth has steadily increased from below 20 percent, a little over 20 percent in 1995 to nearly 30 percent in 2010. This trend is expected to continue to above 30 percent by 2020; 40 percent by 2030; above 40 percent by 2040; and over 50 percent by 2050.
The recent gain in economic growth, particularly starting in 1990, has helped Asia lift millions out of poverty. Using the international poverty threshold of $1.9 per day in 2011 PPP, there are now only 264 million poor Asians living in DMCs.
However, a higher poverty threshold, which can reflect the current situation of many DMCs, showed a different picture. The World Bank recently said adjusting the threshold would paint a better picture of how many people are still poor.
Nakao said poverty in 1990, at a threshold of $3.2 per day in 2011 PPP, there were still 2.274 billion Asians living in DMCs that were considered poor. But this has declined to 2.241 billion in 1999; 1.942 billion in 2005; 1.495 billion in 2011; 1.267 billion in 2013; and 1.1 billion in 2015.
“The poverty rate is coming down dramatically from 1990, and it is because of the progress in China and India, for instance, because of the very large focus on poverty. But if you look at $3.2 per day instead of $1.9, we still have about 30 percent of the population and the share of poverty in the world is [significant] for Asia because of [the] big population of Asia,” Nakao said.
Lifting millions more from poverty in Asia is part of the targets of ADB under its Strategy 2030. The plan intends to transform the region into an economic powerhouse while sustaining efforts to eradicate poverty.
The plan has seven operational priorities—addressing remaining poverty and reducing inequalities; accelerating progress in gender equality; and tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability.
The priorities include making cities more livable; promoting rural development and food security; strengthening governance and institutional capacity; and fostering regional cooperation and integration.