April 1, 2010

(Educators)Within 20 years, India will join China and Japan among the world's four largest economies, according to projections by the Asian Development Bank. Rajat M. Nag, managing director-general of the ADB, said China is likely to surpass the United States by 2040 as the world's biggest economy.

The Asian economy is certainly coming out of the crisis ahead of all the others, Mr. Nag told The Washington Times. While he would not call Asian growth rates robust, he said the recovery there is certainly much more than fragile.

The world economy declined nearly 1 percent in 2009, according to the latest estimates by the International Monetary Fund, fueled by a 3.2 percent plunge in economic output among the advanced countries.

Asia as whole managed to grow at a pace of just under 5 percent last year, but Mr. Nag noted that the region needs to average at least 8 percent a year to prevent increases in unemployment and poverty. As a result, we did see a fairly severe social impact from the crisis, he said.

The ADB, a multilateral development finance institution with 67 members, estimates that 57 million more people remained mired in poverty in Asia than would have been the case if economic growth had not slowed. Based on the current standard for poverty ($1.25 per day and less), about 900 million Asians are impoverished, Mr. Nag said. That's two-thirds of the world total.

Despite the relatively strong rebound, Asia may fail to reach the 8 percent bar for the second year in a row in 2010. In December, the ADB projected a growth rate of 6.6 percent for Asia this year.

China's economy is expected to grow by 8 percent in 2010, a bit faster than India's projected growth rate of 6.5 percent. Growth is forecast to accelerate this year in Indonesia, the Philippines and Vietnam, while Thailand, Taiwan, Hong Kong, Singapore and South Korea are expected to return to growth this year after their economies declined in 2009.

The International Monetary Fund in its January forecast projected even better growth rates for leading Asian economies this year, with China projected to grow by 10 percent and India by just less than 8 percent.

In the long term, Asia inevitably will become the world's dominant economic region, Mr. Nag said.