Economists decode the rise of Asia, reasons for region’s success

A screenshot of esteemed guests attending the seminar held by the International Financial Forum online, on September 8, 2022.

Takehiko Nakao, chairman of the Mizuho Research Institute and a former president of the Asian Development Bank (ADB), shared insights from his book titled The Rise of Asia: Perspectives and Beyond that was published in English by ADB in July 2020 during an online seminar held by the International Financial Forum on Thursday.

A group of economists from various international financial institutions and academic institutions, including the International Monetary Fund, Peking University, and the ASEAN+3 Macroeconomic Research Office (AMRO) joined panel discussions and commented on the book and its main topic focusing on Asia’s economic rise.

Eight key conditions for economic development were put forward by Takehiko Nakao, which comprised infrastructure investment, investment in education and health, open trade and investment regimes, macroeconomic stability, public governance, social inclusiveness, leadership and a vision for the future, along with political stability and a good international environment.

As to the reasons for Asia’s success, Nakao believed there was no such thing as a unique “Asian consensus”and standard economic theories could instead be employed to explain the region’s many achievements.

Justin Lin, Dean of the Institute of New Structural Economics from Peking University, echoed the view that there is no “Asian consensus” because the word consensus means that there is a one-size-fits-all policy approach. “And as Nakao noted, Asian countries develop differently following different models,” Lin said, adding that it's important to have Asia’s voice heard in the global community because currently the voice of the international community is still dominated by the West, as well as being shaped by the theories devised in the West.

Professor Justin Lin said that “the Western voice and theories are based on the Western experiences of success. Since now Asia is also successful, we should also have the Asian voice and theories that's based on Asian experiences of success as well.”

According to the Asian Development Bank, the per capita GDP of Asian developing countries has grown 15-fold from a mere 330 USD in 1960 to reach 4,903 USD in the year 2018, with the region of Asia meanwhile seeing its share of global GDP rise sharply from 4% to 24%. Nakao attributed such amazing achievements to globalization and rapid technological progress. Besides, as Asia enters an era of innovation-driven economic growth, governments have increasingly had a bigger role to play.

Hoe Ee Khor, Chief Economist at AMRO, described Asia’s sustained development following the global financial crisis of 2008 as an “Asian Renaissance,” with the region of Asia having emerged today as more resilient and stronger than ever in contemporary history.