This has been dubbed the 'Asian Century,' with Asian nations expected to ascend to global economic pre-eminence in the coming decades.
What does this mean for the West? While some view Asia's dynamic growth as a possible threat, the region's vibrant economies—expected to grow more than seven per cent this year—are worth wooing.
Asian leaders have taken steps to protect their economies from the global slowdown and the eurozone crisis by tightening monetary policies and introducing measures to cool down the property sector. Some countries are further cushioned by low levels of external debt, banking systems with strong capital bases and low levels of non-performing loans. For Asia, the future looks bright.
For countries like Canada, Asia's growth presents an unprecedented opportunity to bolster their own bottom line while helping shape the region's development. But expanding trade in emerging Asia should not be about simply exploiting an opportunity.
Despite glittering economic forecasts, Asia is still home to the bulk of the world's poor. More than 750 million Asians live on a daily budget that is less than most Canadians spend on their morning coffee. Nearly half a billion Asians still lack access to safe drinking water. Another 700 million still aren't connected to a power source.
While Asia has made tremendous inroads in the fight against poverty, not enough of the region's economic prosperity is reaching its poorest people. In urban areas of the People's Republic of China, for example, the Gini coefficient, an index measuring income inequality, has risen more than 35 per cent since 1990.
It is essential to balance Asia's economic expansion with more inclusive policies. Cut off by poor roads, telecommunications, or even government policies that don't allow them to easily borrow or save, Asia's poor and vulnerable are watching the chasm between rich and poor grow ever wider. That gap in prosperity can aggravate simmering social, economic and political tensions.
Asian governments can help stem widening inequality by creating better conditions for the private sector to take the lead on economic expansion, continuing to promote economic diversification, and spending on regional road, sea, and air networks that will open more opportunities to more people.
This is an area where Canada and other Western governments can help. By investing in infrastructure alongside public lenders, they can help attract much larger sums from the private sector. Asia needs to capitalize on financial lessons from the West, particularly when it comes to setting banking regulations, strengthening regional links, and promoting bonds to better use Asian savings.
Canada's aid agenda is a reflection of its values of fairness and equity, and as the country moves toward more trade with the Asia and Pacific region, it can build on those characteristics by promoting policies that invite inclusive growth.
Carefully calibrated government support can help steer Asia's economic potential, reducing political risks while opening new markets to help move the West beyond the current crisis. In the long run, an Asian economy built on sustainable growth can open up new opportunities for Western businesses, support greater levels of trade, and generate growth in Asian tourism. Conversely, a weaker Asia presents a host of threats to the West's future growth and prosperity.
The world's future prosperity will be built on economies that both power growth that benefits all of society as well as protect against environmental degradation and climate change. Advancing trade that builds on these ideals would not only promote Canada's own economic interests, it would help protect more of the world's poor from slipping back into extreme poverty.