‘Megatrends’ Will Shape Asia-Pacific’s Long-Term Future

In the coming decades, countries including Vietnam and Indonesia will become increasingly important.


By Charles E. Morrison
For us at the East-West Center, the arrival of 2010 marks 50 years since our institution was founded to promote under-standing and cooperation between the peoples of the US and the Asia-Pacific region. While we will be celebrating the Center’s roots and legacy throughout the year, it is also a time to be attuned to the “megatrends” that continue to reshape the region and thus define our future agenda.

Perhaps the foremost of these is continued economic dynamism. Two hundred years ago, eastern and southern Asia accounted for half the world’s goods and services, but by 1960 this share had shrunk to less than 20 percent. In the past 50 years, however, Asia has made a remarkable comeback to about 35 percent of the world economy today, and by the middle of this century or even earlier, it should again reach the 50-percent mark.

China and India followed Japan as leaders of this resurgence. In the coming decades, other large countries including Vietnam and Indonesia will become increasingly important.

Despite setbacks such as the Asian economic crisis of 1997-98 and last year’s global financial crisis, Asia will lead global growth for years to come. Much of the advance comes from “catch-up” growth using available technologies and correcting deficiencies and inefficiencies. The fundamentals, notably strong productivity growth and an increasingly highly educated work force, are in place for continued dynamism.

A related, second megatrend is the sharp fall in population growth rates and the consequent aging of populations. In the 1960s, Asian women bore an average of four to five children during their lifetimes, a figure that has dropped to well below two in Northeast Asia. Total population began to decline in Japan two years ago, and South Korea and China will follow.

Since the birth rate has not yet fallen so steeply in South Asia, the bulk of new Asian population growth will be there, with India projected to replace China as the world’s most populous country by 2025.

As recently as 30 years ago, Japan had the youngest work force among advanced countries. Today, it has the oldest. By 2050, more than one-fifth of the Japanese population will be over the age of 75, with many more older women than men. Japan at least grew rich before it grew old, but China, also aging, may not.

This new demography is unprecedented in human history. There are obvious implications for health services, savings and pension systems, insurance and many other businesses. The broader implications for social wellbeing, innovation, productivity and political life are more speculative.

Also related to economic growth is the reality that Asia will continue to put enormous pressure on the environment. With limited resources, the region is already the world’s largest market for imported petroleum products. Forests and water supplies are under tremendous pressure, in part because of the growth in industrial use, but even more because of changing agricultural demands.

China now surpasses the United States as the largest overall emitter of greenhouse gasses. But with China’s per-person emissions still at only a quarter of the US level, and India’s emissions only half that of China’s, there will continue to be large increases in Asian emissions.

Education and healthcare will be among the most contentious policy concerns. In a globalising world with rapidly advancing technology, educational needs are highly dynamic, but many educational bureaucracies are not.

Aging populations and the rise of cardiovascular diseases, diabetes and other health issues associated with increased prosperity and changing lifestyles create dramatic new healthcare challenges. The potential for a pandemic remains strong, given the combination of dense human population, the explosion of the animal population as diets change and inadequate health and safety standards.

Clearly a region of such immense populations, rapid economic growth and huge social and resource issues will have enormous importance for the United States and rest of the world. No global issue, from climate change to nuclear non-proliferation to sustainable economic recovery, can be resolved without the cooperation of the big countries on both sides of the Pacific. And while many of the trends and challenges are predictable, the capabilities of governments and societies to respond effectively and cooperatively are not. The recent Copenhagen climate change summit illustrated the huge gaps in national perceptions of interests and responsibilities that make collective action difficult.

The challenge for the East-West Center in its second half-century is to help to reduce such gaps and strengthen the building blocks of cooperation. Working collaboratively on the challenges that these megatrends present and sharing expertise within the Asia-Pacific region have become all the more imperative.

Charles E. Morrison is president of the Honolulu-based East-West Center.

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