Asia has the population and the capital needed to become more than half of the world’s economy by 2050, if everything goes right, according to the Asian Development Bank.
While many people assume this kind of growth is inevitable, the ADB warns of other scenarios, including a Doomsday scenario:
Long-term projections of Asia through 2050 cannot rule out the possibility of a “perfect storm” scenario, whereby the combination of bad macro-policies, exuberance combined with lax financial sector supervision, conflicts, natural disaster/climate change risks, demographic and weak governance could lead to a major setback to Asian growth. Under this worst case—or Doomsday—scenario, Asia could stumble into a financial meltdown, major conflicts or regionwide chaos well before 2050.
That’s one scenario. A more likely one is the Middle Income Trap. This is a phenomenon where middle income companies become stagnant, as occurred in Brazil and South Africa:
They are caught in the Middle Income Trap — unable to compete with low income, low wage economies in manufacturing exports and unable to compete with advanced economies in high skill innovations. Put another way, such countries cannot make a timely transition from resourcedriven growth, with low cost labour and capital, to productivity-driven growth.
If caught in the Middle Income Trap, Asia would represent less than a third of the world economy by 2050.