Global economics: IMF forecasts leadership role for Asian nations

The recent crisis has underlined the emergence of Asia as "a global economic powerhouse," said Anoop Singh, director of the International Monetary Fund’s Asia and Pacific Department. As a consequence, he added, "Asia is moving into a leadership role in the world economy."

According to the IMF, several dynamic economies in the region are generating growth outcomes that register on a global scale and are helping pull the world economy out of recession. China and India are leading the way, but the phenomenon is by no means limited to these two countries. Asia’s economic importance is unmistakable and palpable.

Based on expected trends, within five years Asia’s economy (including Australia and New Zealand) will be about 50 percent larger than it is today (in purchasing-power-parity terms), account for more than a third of global output, and be comparable in size to the economies of the United States and Europe. By 2030, Asian gross domestic product (GDP) will exceed that of the Group of Seven major industrial economies (G-7).

"It is only natural, then, for Asia’s voice to become increasingly influential in global economic and financial discourse," said Singh. "Already, six of the Group of 20 major economies (G-20) are from the Asia-Pacific region."

Singh also noted that Asia accounts for just over 20 percent of IMF voting shares, and this weight is certain to rise as the IMF pursues reforms to bring countries’ voting shares more closely in line with their role in the world economy.

"With the right policies, this economic success is likely to continue and further improve living standards for Asian people, transforming the livelihoods of almost half the world’s population," said.

Consolidation of the recovery is still the main challenge for the world economy. Although Asia was not heavily exposed to the kinds of toxic securities that caused problems elsewhere, the region is an important participant in world trade, and its exports were hurt by the collapse in demand from advanced economies. The impact of the external shock was mitigated for countries with large domestic demand bases, such as China, India, and Indonesia, and some of the commodity producers, such as Australia, but the more export-oriented economies experienced particularly sharp downturns.

However, economies across the region rebounded strongly, and by end-2009 output and exports had returned to pre-crisis levels in most of Asia, including in the hardest-hit economies.

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