(Reuters) – Asia needs to work to ensure the potential of its economic and political rise is realized, including fulfilling its responsibilities as a global player, the Asian Development Bank said ahead of its annual meeting next week in Vietnam. Home to 3.3 billion people, Asia has led the global economy in recent years, and the rise of China and India has lifted the region’s profile and influence in world markets. But the region also has nearly 2 billion people living on less than $2 a day, including in China and India, who are most at risk from sharp rises in food and fuel prices this year.
“Sure we have had a tremendous growth story, incomes have increased, and Asia has a lot to be proud of,” ADB Managing Director General Rajat Nag told Reuters. “But you also 700 million people without access to clean water, you have 1.7 billion people without access to sanitation, you’ve got maternal mortality which is high, you’ve got child malnutrition,” he said. Around 3,000 people will gather in Hanoi for the May 3-6 meeting, and the ADB, charged with fighting poverty in Asia and the Pacific, will push the case for the region to face up to its responsibilities.
The message, Nag said, was clear: “Your rise is not preordained; it is plausible, but you’ve got to earn it.” “You’ve got to make some policy decisions now to reduce inequity, increase the basic education, address issues of governance and corruption, show leadership, have strong regional integration if you are going to avoid the middle-income trap.” That trap, where per capita income levels rise to about $7,000-10,000 and then stall, had afflicted countries in Latin America and the Philippines in Asia, he said. By avoiding the trap, Asia would account for half of world output by 2050, from 27 percent now, with per capita income of about $39,000, in purchasing power parity terms, and billions lifted out of poverty, an ADB-commissioned study found.
“If on the other hand you get caught in the middle-income trap, the per capita income will only be about half, about $20,000 per capita, and Asia’s output will account for about 32 percent,” Nag said. “So the potential loss is huge.” Earlier this week, the ADB warned that if the 10 percent rise in food prices seen in early 2011 was sustained, 64 million people in Asia could be pulled below the poverty line.
STEP UP TO THE TABLE
Part of the process of securing the future would be Asia living up to its global responsibilities in areas such as financial system architecture and climate change, both of which are topics at the annual meeting. It was not a matter of Asia demanding a place at the global table, Nag said. It was already there, with six G20 members and an increasing role in the world economy. The challenge was now for Asia to live up to its new role. “It cannot be just one of whining and complaining. We are a big player now ourselves,” he said.
“Asia has to start showing leadership. And I think some of the discussions on climate change will involve some fairly difficult choices which Asia will have to make.” Another role Asia may have to take on is its greater responsibility for the work of the ADB itself, with some of its traditional donors facing fiscal constraints. Nag said Japan had always been a generous donor and that would continue, even as the country faces the enormous task of rebuilding after the March 11 disaster. “Funding is going to be a challenge, so we have got to look at non-traditional donors. We have got to look at maybe Asia itself; we’ve got to say if Asia is growing and getting more prosperous, then maybe Asia also needs to contribute more.” (Editing by Richard Borsuk) Source>>
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