The rise of Asia on the back of its rapid industrialisation will lead to a shift in the balance of global economic power by 2050, noted economist Deepak Nayyar said on Wednesday.
In a conversation on his latest book 'Resurgent Asia: Diversity in Development' here, Nayyar said that by around 2050, Asia will account for half of the world's total income and population, but per-capita income of the region will be nowhere of the level of the US or Europe.
The rise of Asia represents the beginning of a shift in the balance of economic power in the world and some erosion in the political dominance of the West, he said.
Future will be shaped partially on how Asia exploits opportunities and meets challenges, he said adding that partly by how the difficult economic and political conjectures in the world unravel.
"Yet it's plausible to suggest that by around 2050, a century after the end of colonial rule, Asia will account for more than half of the world's income and will be home to more than half of the people on earth," Nayyar said while giving a brief account of his book.
In his book, he says that Asia will have economic and political significance in the world by 2050 which would have been difficult to imagine 50 years ago, even if it was the reality in 1820. "In terms of per-capita income, however, it will be nowhere as rich as the United States or Europe. Thus, Asian countries would emerge as world powers, without the income levels equal to rich countries."
China will be large and influential and so might India, but as a continent, Asia will not have the dominance that Britain had in the past or the United States has even now, Nayyar writes.
"The most likely scenario in 2050 is a multipolar world, in which dominance might not be so striking. The United States and China will most probably be the leading countries with an economic and political significance in this world. But, it is likely that this group will be larger including India, Indonesia and Japan from Asia, Brazil and Mexico from Latin America, with Germany, France and possibly Britain from Europe," the book says.
Tracing back to 1820 when Asia accounted for two-thirds of the world's population and more than half of the global income, Nayyar said the subsequent decline of the region was due to its integration with a world economy shaped by colonialism and driven by imperialism.
By the late 1960s, Asia was the poorest continent in the world, marginal except for its large population, he said, adding that the social indicators of development, among the worst anywhere, epitomised its underdevelopment.
He said the deep pessimism about Asia's economic prospects, voiced by the Swedish economist Gunnar Myrdal in his 1968 book Asian Drama, was widespread at the time.
In the rapid industrialisation led by economic transformation of Asia over the last 50 years, governments performed a vital role ranging from leader to catalyst or supporter, Nayyar noted.
"The developmental states in South Korea, Taiwan and Singapore coordinated policies across sectors over time in pursuit of national development objectives, using carrot-and-stick policy to implement their agenda, and were able to become industrialised nations in just 50 years," he said.
China emulated these countries with much success, while Vietnam followed the same path two decades later as both the countries have strong one-party communist governments that could coordinate and implement policies, he further said.
However, it is not possible to replicate these states elsewhere in Asia, the economist said. "But other countries, such as India, Indonesia, Malaysia, Thailand, Bangladesh and Turkey managed to evolve some institutional arrangements, even if less effective, that were conducive to industrialisation and development."
In some of these countries, the checks and balances of political democracies were crucial to making governments more orientated towards development and people-friendly, he added while talking about his book.
Nayyar said that even as the rising per-capita incomes transformed social indicators of development, literacy rates and life expectancy rose everywhere in the region with a great fall in absolute poverty. "The poverty reduction could have been much greater but for the rising inequality. Inequality between people within countries rose almost everywhere, except South Korea and Taiwan."
He further said the gap between the richest and poorest countries in Asia remains significant and the GDP-to-per-capita income ratio in the richest and poorest country in Asia was more than 100:1 in both 1970 and 2016.
Nayyar is a former vice-chancellor of Delhi University and Emeritus Professor of economics at Jawaharlal Nehru University.
He is also a former Distinguished University Professor of Economics, New School for Social Research, New York, and is currently serving as an independent director on the Board of Directors of Press Trust of India.
The book has been published by Oxford University Press.