If it is able to maintain the current growth momentum and address, at the same time, the multigenerational challenges and risks, Asia could account for about half of global output by 2050, up from 27 per cent as of now.
The region will also boast half of the global trade and investment by then and an additional three billion Asians will enjoy higher living standards, according to the draft of a new report commissioned by the Asian Development Bank (ADB).
Under this optimistic outlook, referred to as ‘Asian century' scenario by the report, the gross domestic product (GDP) of the region will soar to $148 trillion by the middle of the century. On purchasing power parity basis, GDP per capita in Asia will rise to $38,600 as compared with the projected global average of $36,600 in 2050.
However, the report assumes an alternative ‘middle income trap' scenario with Asia's fast-growing economies, namely, China, India, Indonesia and Vietnam, falling into slow growth rates and stagnant income levels over the next five to 10 years. If it occurs, Asia will account for only $61 trillion, or 32 per cent, of global GDP by 2050 and the GDP per capita will rise to only $20,300.
The report notes that while the region has made significant strides in tackling income poverty, the issue of non-income poverty still remains pervasive. For instance, half of all Asians live without basic sanitation, while 900 million people have no access to electricity.
The sustained transformation and eradication of poverty in the region will require more than just high economic growth rates. The yawning inequalities must be narrowed down and the region must be prepared for a massive wave of urbanisation and changing demographic profiles.
The realisation of ‘Asian century' scenario will also depend on how the region controls its resource use, including water and food, and manages its carbon footprint.
Besides, the countries in the region must modernise governance systems and retool their institutions to ensure transparency, accountability and enforceability of rules and regulations, says the report.