According to a recent report published by DBS, 10 major economies of Asia – China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand – are expected to see robust growth in the next 12 years, which will amount to over $28 trillion in real GDP terms on aggregate, which is more than the US.
If the growth spurt is as vigorous as expected, by 2030, the 10 major Asian economies on aggregate will amount to over $28 trillion in real GDP terms, as compared to the US, which will amount to $22 trillion. “We expect Asia-10 to pull ahead of the US by 2030,” DBS said.
In the report, DBS also states that Asia has a bright economic future, but also noted that all Asian economies face the same kind of problems such as climate change, technological disruption, rising inequality amongst the masses and a worsening environment for trading purposes, which might hinder the growth process. “Several dynamics that have supported the economic development of the Asian economies in recent decades are weakening, and there are many changes in the international environment,” it continued in the research report.
However, the research note also highlighted that the ‘demographic dividend’ – i.e. the growth in an economy that results from the change in the age structure of a country’s population – that many Asian countries have benefited from in the past may no longer be as valuable as it was before, since a younger population creates another challenge of creating sufficient jobs in the market. The absence of sufficient jobs can cause unemployment, which can lead to economic, social and political challenges in a country. In particular, the report mentioned India in relation to its unemployment crisis, saying that “Countries like India and the Philippines will need to work hard to create employment for its young population; while ageing countries like Singapore, Japan and China may be able to offset the demographic drag through the active use of new technology”.
The report also warned that the emergence of trade protectionism – the practice of creating policies which limits competition from foreign industries, much like India did before its Liberalization, Privatization and Globalization (LPG) reforms – would reduce trade and investment flows in the continent.