Asia’s Economic Rise — Prospects and Pitfalls

By Jheel Bastia

As a part of the public session, ‘The Conversation Series’, the United Nations University Headquarters in Tokyo invited Under-Secretary-General and Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), Dr. Shamshad Akhtar to give a talk on the economy and growth trends in in Asia and the Pacific countries. The Economic and Social Commission for Asia and the Pacific under the framework of United Nations has been working closely to give technical assistance and build capacity for its member states (Asian and the Pacific nations) in the fields of macroeconomic policy, poverty reduction and financing for development, trades, technology, information, and communications technology (ICT), social development, etc. The one-hour session was dedicated to understanding the economic growth that has been seen in these countries throughout the past few decades, where it presently stands in terms of economic growth, and ultimately ended with a discussion of whether it will continue to rise or fall in the coming years and concluded with a way forward.

In discussing the historical evidence of growth, Dr. Shamshad Akhtar emphasized how the regions have evolved through their homegrown models of economic development, which catered to the needs and requirements of the citizens. The strength has always been in the homogeneous nature across a specific country in every dimension, be it population outfit, basic food necessities, culture, society structure, etc. One can find that if the onus and policies are strong, the trend lines are strong and vice versa. Every region has its own challenges and the amount of growth has differed regionally. Regions in South Asia and Southeast Asia have grown drastically in comparison to many Pacific nations, owing largely to the differences in historical evolutions.

While discussing the present stand, Dr. Shamshad mentioned that it cannot be denied that economy of few Asiatic countries like ‘China and India’ are growing much faster than global economic trends and their populations is already exceeding 60% of the total global population. The challenge here is the diversification among the countries in terms of social, economic, political and environment dimension.

After hearing a lot of the back story, the next segment worked to given an understanding of whether the economy will continue to rise or if it will decline in times to come. “For it to continue to rise, tremendous work is required. The strength lies in the fact that Asia is globally and regionally integrated and despite economic crises, it has shown resilience,” she said. If it has managed to evolve through great economic crises in the past, it will always tend to try and seek a way out. Asia has seen historical success largely because it has been able to manage internal peace and security. Moreover, many Asian countries have invested heavily internally, building world class infrastructure, capital mobility, and foreign direct investments (FDI) with a highly skilled and cheap labor. Multilateralism is a new way to seek alliances and has given a new dimension to growing economies. Asia and the Pacific have been open and liberal economies but lately, even the command driven economy such as China has also started advocating the importance of the global economy and foisted multilateralism. To wrap up the discussion, she discussed the factors needed to drive Asian and the Pacific nations further. “This depends largely on stronger governance, self-driven economy and less dependence on external factors,” she stated. Focus now should be on the quality of economic growth and not just the quantity. Further, these factors and methods must largely move towards a common vision of sustainable development. Domestic demands must replace external trades as it involves one of the major dimensions of social policy which targets ‘job creation’.  Expenditure must be done on skill building, education, and health. There are pockets in Asia-Pacific like Chile, who have done extensively well in targeting these issues as a way forward. The crux is to shift the fulcrum to demand rather than supply. The development does not only deal with age-old fundamental issues of money and investment but it’s time to deal with changing the fundamental policies in the sectors of education, skills, and infrastructure.