Through the multiple crisis that have hit the world, Asia (and particularly the South East Asian part) has managed to pull itself together as a region. The major cause of this fructiferous return has been that, while countries such as the United States, France, Germany, and other European Countries thought more about their personal domains, Asian countries left ego aside and thought of a greater scale, the scale of countries, and the scale of a continent.
However, this expansive mindset of a “Broader Asia” has proved to be a blessing in disguise for the Asian countries. During the breakdown of the Global Financial System, while countries like China, India, Indonesia, Thailand and Korea showed soaring growth rates, there were countries like Pakistan and Afghanistan which were considered amongst countries showing the lowest development rates ever. One misconception that people have been living in is that developing economies such as China, India, Korea and Thailand will be able to avoid a deep recession even amid the global meltdown. It is a portentous rosy picture that has been painted of a region. Though it would be safe to say that China and India are still in the running to become the biggest economies in the world, the future of Asia looks rather frail. It is time that the rosy picture is put aside and we address the unexplored side of the crisis.
The fact that still stands is that this crisis for majority of the countries is an export oriented crisis. China has been hit obdurately, as its exports decreased by 25.7% in February 2012. If such massive slumps continue, the government would face loud demands from Chinese companies to depreciate the currency. The story of South Korea (a country which banks heavily on its software and hardware exports) pretty much follows the same lines. While IMF continues to reduce global growth estimates, and gives stronger warnings that the European crisis threatens to derail world economy, it is sad to see that the most authoritative force in the next 20 years (Asia) has learnt little from the 1997 Asian Financial Crisis which endured considerable distress to many economies. These countries must soon realize that the recommencement of the export-dependent growth strategy after the slowing down of the crisis is not the answer. Instead, the balancing of their respective economies towards greater domestic consumption will ensure a more promising future and in fact may act as a surfeit which will prove to be a much awaited boost to Asia’s self-esteem.
Highly integrated with the global trading and financial systems, Asia is set to become the largest economic region in the world over the next two decades. The speed of that growth, and Asia’s economic openness, underline its increasing importance for the global economy. It is thus extremely essential that the major economies of the continent viz. China, India, Korea, Singapore, Taiwan and Thailand must scrutinize every economic principium that they follow and build intellectual relations with the rest of the world. Given its rise, it is natural that Asia’s voice should become increasingly influential in global economic and financial discourse. This trend is already under way. Six of the Group of Twenty (G-20) major industrialized and emerging market economies are from the Asia-Pacific region.
With the hurdles that lie ahead in the rise of Asia, the continent has a perfect platform to convert criticism into something extremely productive, and for the Asian miracle to occur, an important countenance that the region must acknowledge is that it is not only about the emerging economies. For sustainable growth, competition among the well-off and uplifting of the under developed is of paramount importance.
