The center of gravity of the world economy is shifting toward Asia but an "Asian Century" can only be realized if the continent's fast growing economies avoid the "middle income trap" of slowing economic growth and stagnating incomes.
A draft report commissioned by the Asian Development Bank (ADB) says the region could account for nearly half of global output as well as global trade and investment by 2050.
An overview of the report, unveiled at the ongoing 44th annual meeting ADB in Hanoi, paints two scenarios with very different outcomes depending on the region's success or failure in sustaining its current growth momentum and addressing "multigenerational challenges and risks."
An ADB press release issued Wednesday (May 4) said the report would be discussed by participants in the Governor's Seminar. The seminar included the finance ministers of Bangladesh, France, India and the Republic of Korea; the vice finance minister of China, the governor of the State Bank of Vietnam (SBV) and Japan's parliamentary secretary of finance.
Rampant poverty, highly uneven growth, increasing inequality and heightened vulnerability to economic, social and environmental risks are some of the challenges facing the region, the bank said.
Delegates at the meeting also highlighted corruption as a development barrier that needs to be eliminated by strengthening international cooperation, reforming administrative procedures and increasing salaries for state employees.
Indian Minister of Finance Pranab Mukherjee said corruption hinders stable and prosperous development. He spoke of an anti-corruption movement launched by 72-year-old Indian social activist Anna Hazare that drew support from millions of Indians.
India has strengthened its fight against government corruption, Mukherjee said. India has set up an anti-corruption committee that will receive all complaints from citizens about the country's administrative agencies, he added.
Noting that corruption exists in most countries, State Bank of Vietnam (SBV) Governor Nguyen Van Giau stressed the need to create a legal framework to fight it, accelerate administrative reforms and strengthen public finance management.
China's Alternate Governor in ADB Li Yong said fighting corruption will be a long-term process that requires close international cooperation to reduce tax evasion and cut back on illegal incomes. He said it was necessary to find new ways to deal with corruption.
Japan's Parliamentary Secretary of Finance Motoyuki Odachi said Asian countries should also focus on dealing with the pressure of urbanization in the coming decades. He said they should increase investment in infrastructure development by mobilizing more private capital sources via the public-private partnership (PPP) model.
Mukherjee, of India, said the best way to reduce urbanization was to create jobs for rural people. India offers vocational training to some five million workers anually, he said.
SBV governor Giau said Vietnam was also facing pressure from rapid urbanization. He said many farmers have lost arable land, and the country is helping rural residents attain new skills to find off-farm employment.
Asia is facing "convergent crises of water security, food security, and climate-related disasters, and we must act with the urgency that crisis demands," said ADB vice president Ursula Schaefer-Preuss at a seminar held May 3 on Climate Change and Resilience.
In her speech, carried on the ADB website, she said "water, food and natural disasters are already significant concerns for security, economic development and poverty reduction in the Asia and the Pacific region, and"¦ climate change is likely to exacerbate these risks.
"We are already in crisis, as the facts from developing Asia speak clearly for themselves. The region is home to more than half the world's peopleand the majority of its poorbut contains only one third of its water resources," Schaefer-Preuss said. "By 2030, demand for water in Asia is anticipated to exceed supply by 40 percent. And, since 80 percent of the water we use is consumed in agricultural production, water shortage leads directly to food shortage."
She said "dramatic increases in energy use are destabilizing our climate, and the increasing frequency and severity of climate-related disasters are eroding food security as well. When these trends are combined with rising population, urbanization, and industrialization, our precarious future becomes even more uncertain."
Not enough attention has been paid to the quality of growth and the long-term impacts of the development path pursued until now, she said, warning that a failure to urgently address issues of water and food security as well as climate change could push millions back into poverty.