Is Asia The Emerging Economic Powerhouse?

Posted on February 26, 2011 in GlobeScope


By Waleed Tariq:

Asia is the world’s largest and most populous continent, located for the most part in the eastern and northern hemispheres. It covers 8.6% of the Earth’s total surface area and with approximately 4 billion people; it hosts 60% of the world’s current population. (Wikipedia)

As defined by the ECO ASIA Project, the Asian region is of vast proportions, stretching northward to Mongolia, southward to New Zealand, eastward to the island states of Oceania, and westward to Pakistan. It also encompasses a vast variation of climate and topography, from tropical to arctic, and from the Himalayas to coral reefs. Also, to its immense physical area, the region also presents a great historical, cultural, and ethnic diversity as well as a variety of stages of political evolution and economic development.

For over a hundred years, the United States has been the largest economy in the world. With major shifts however taking place in the last two decades, the transfer of economic development and power from West to East is gathering pace and many in the West have already recognized and aware of Asia’s growing strength.

Over the last 20 years, the Asian region is continuing to keep high economic growth rates exceeding those in other regions, and has consequently come to be known as the “growth center” of the global economy. Over the coming years, it is projected to continue to benefit from the highest growth rates in the world and to serve as the engine of world economy.

This can further be in illustrated by specific examples of countries; with India and China leading the way, the recent economic recession in the west has underlined the emergence of Asia as a global economic powerhouse.

Taking China, since the launch of economic reforms in 1997, China has become one of the world’s fastest growing economies. The economy has been growing at an astonishing rate of 9.5 percent per annum. The rapid rise of China as key economic power has become one of the biggest economic success stories in modern age.

“For the first time in recent history, in next year china will make a greater contribution to global growth than the United States” IMF said in its biannual report 2007.

According to an estimate, one third of the real growth in the world comes from China. Millions of Chinese have been living like Americans, and China has replaced United States to become the world’s leading consumer of most basic commodities like grain, coal and steals.

“Based on expected trends, within five years Asia’s economy will be about 50 per cent larger than it is today (in purchasing-power-parity terms), account for more than a third of global output, and be comparable in size to the economies of the US and Europe,” (IMF Director, Asia and Pacific Department, Anoop Singh).

While on his visit to India, President Obama commented “India is not simply emerging but has emerged”.

India’s record on indices of democratic governance, economic growth and socio-political stability is encouraging. It is almost the fourth largest economy in the world, with a steady annual growth rate of close to 9 per cent; it is a rising as a regional economic superpower. Moreover, Bangalore has emerged as the new Silicon Valley. Also, the Delhi and Mumbai skyline is decorated with classy hotels and international banks.

So in Asia, China is not alone; India also boasts growth rates that could outstrip those of major the Americas and other Western countries for decades to come. China’s economy is expected to double the size of Germany’s economy, soon and to overtake Japan’s, which is currently the world’s second largest, by 2020.

I have discussed a few characteristics that India and China share in the region and both have a great deal to gain from continuing to tackle the common challenges with determination, and from assuming a larger economic role in the region and the global economy, thus moving towards making Asia as major economic player.

Image courtesy.