Has Asia’s century arrived?
In 2000 or at the turn of the millenium, Asia was widely predicted to eclipse Europe and North America in economic strength. Led by emergent China, Asia had already then become the world’s factory, able to churn out a galaxy of household and office items such as furniture, appliances, utensils, toys, office supplies and so on that flooded the world market.
The different Asian countries had also firmed up their positions in the global value chains (GVCs) of the multinationals specializing in the production of cars/vehicles, semiconductors/electronics and garments. The iPhone, conceived in California, has high-tech components from Japan, South Korea and Taiwan, and is assembled in China by Foxconn and Pegatron, both of which have other facilities in other Asian countries such as Indonesia. Garments, designed in American and European capitals, are cut and sewn in Bangladesh, Cambodia, India, Sri Lanka and Vietnam. The Philippines was in the industrial GVC periphery but, like India, managed to get later a big role in the GVC for services.
In 2011, the Asian Development Bank (ADB) formally declared that the 21st century indeed shall be Asia’s century, and that this will be a reality by 2040 or thereabouts (see ADB, Asia 2050: Realizing the Asian Century, 2011). To ADB, this means that Asia, which accounts for 60 percent of the world’s population, will reassume its economic dominance in the world in three decades, a position it held three centuries ago. ADB illustrated this cross-century pendulum in Figure 1.
The latest assessment on Asia’s rise came from McKinsey Global Institute, a multinational research institution. In its recent publication (Asia’s Future Is Now, July 2019), McKinsey declared that Asia’s arrival came much earlier. It observed that home-grown Asian multinationals are now dominating the financial boards of the world. In 1997, Asia accounted for 36 percent of the 5,000 largest global firms; in 2017, the Asian share was up to 43 percent. China accounts for the huge increase, but McKinsey noted that corporations from the Philippines, Vietnam, Kazakhstan and Bangladesh are now on the list. Also, the big Asian firms have diversified into technology, finance, logistics and infrastructure. They are now transforming the region’s economy into a services-led one, with manufacturing now accounting for a smaller share of the economy.
The most dramatic development is on the digital side of the global economy. Wrote McKinsey:
“Asia is online and booming. Today it already accounts for half (2.2 billion) of the world’s Internet users; China and India alone account for one-third…The region’s enormous pools of digital consumers support a flourishing and innovative technology sector. China, Japan, South Korea, and Singapore are among the most digitally advanced nations in the world. China has joined these ranks with startling speed. In e-commerce, for example, China accounted for less than 1 percent of the value of worldwide transactions only about a decade ago; that share is now more than 40 percent. Penetration of mobile payments among China’s Internet users grew from just 25 percent in 2013 to 68 percent in 2016. Three of China’s Internet giants—Baidu, Alibaba, and Tencent—are building a rich digital ecosystem now growing beyond them.”
Mesmerizing. Is this indeed Asia’s 21st century?
For majority of the working people of Asia, the answer is a likely no. There is no significant positive transformation in their lives.
In fact, ESCAP said that Asia is on course to “to miss all” the 17 Sustainable Development Goals (SDGs) set by the United Nations as the global indicators of growth and development. ESCAP stands for the UN Economic and Social Commission for Asia and the Pacific. In its Asia and the Pacific SDG Report for 2019, ESCAP wrote that the “region needs to fast-track progress or reverse negative trends regarding all Sustainable Development Goals to achieve the ambition of the 2030 Agenda.” Asia is lagging in realizing some of the SDG targets and even failing in meeting the other SDG targets.
The 17 SDGs are: (1) zero hunger, (2) no poverty, (3) good health and well-being, (4) quality education, (5) gender equality, (6) clean water and sanitation, (7) affordable and clean energy, (8) decent work and economic growth, (9) industry, innovation and infrastructure, (10) reduced inequality, (11) sustainable cities and communities), (12) responsible consumption and production, (13) climate action, (14) life below water, (15) life on land, (16) peace, justice and strong institutions, and (17) partnership to achieve the foregoing goals.
ESCAP’s summary of the SDG scorecard for Asia is as follows:
- Progress is below 2000 levels for clean water and sanitation (Goal 6), decent work and economic growth (Goal 8) and responsible consumption and production (Goal 12).
- No or little progress on zero hunger (Goal 2), industry, innovation and infrastructure (Goal 9), reducing inequalities (Goal 10), sustainable cities and communities (Goal 11), climate action (Goal 13), life below water (Goal 14), life on land (Goal 15) and peace, justice and strong institutions (Goal 16).
- Progress is insufficient on no poverty (Goal 1), good health and well-being (Goal 3), quality education (Goal 4), gender equality (Goal 5), and affordable and clean energy (Goal 7).
- Slow progress in strengthening partnerships (Goal 17).
- More than half of Asia-Pacific’s total employment is in the informal sector;
- In a few countries, some 15-20 percent of children from ages 5-17 are engaged in child labor;
- On average, 2,000 people die every day in traffic accidents in the region;
- 325 million people still live without electricity.
Is the Philippines a mirror of the above Asian paradox? The economy is surging GDP-wise, and yet most of the GDP targets listed above are unlikely to be met by the country, not in 2030 (the UN target year) and probably not even in 2040 (the target year of Neda’s Ambisyon 2040).