Rapid economic development in recent decades has pulled Asia from the periphery to the center of the global economy. In the process, hundreds of millions of Asians have risen out of poverty and many millions more continue to benefit from new economic opportunities. Asia knows how to grow. To spread the wealth further, it must grow well. Quality growth the kind that brings the poor into the mainstream economy, creates jobs and raises incomes without destroying the environment is not easy to achieve. Asia is at a defining moment. With strong economies, massive financial reserves and a growing consensus that nations of the region can do more together than any country can alone, wise decisions now can set the foundations for continuing growth that will pay dividends for years to come.
But there are at least three critical challenges which, if left unchecked, could threaten economic stability. For one, Asia's growth must be inclusive. No one should be constrained by the lottery of birth. Opening the growth process to all citizens is not just a moral imperative. When certain regions, sectors, or groups are left behind for long periods, growth itself is at risk. Inclusiveness is critical if countries are to reach their full potential.
This broad-based growth can only be achieved if people have access to basic services like clean water and sanitation, and if the poor can get the education and training needed to undertake productive work.
Jobs must then be created and growth spurred in the right places. More than two-thirds of Asians live in rural areas, and almost everywhere, the incidence of poverty is greater in the countryside than in cities. Farmers need irrigation systems and access to technologies that can make their land more productive. Rural economies need roads to move their produce and other products, and markets at which to sell them. Researchers have estimated that in India each 1 million rupees, or $22,200, invested in rural roads pulls 165 people out of poverty. Across Asia, expanding economic opportunities for the rural poor is the surest way to cut poverty. Reducing corruption and improving governance presents a second central challenge. It would be difficult to overstate the importance to development of rules, public management systems and laws that are transparent, respected and enforced. These are the hallmarks of good governance. Without them societies suffer corruption spreads, public services like schools, clinics and police deteriorate, justice is lost.
The greatest impediment to private investment and productivity growth in many countries is the high level of risk arising from policy uncertainty, corruption, market distortions, and legal and regulatory weaknesses. Countries must address these risks if they are to attract the massive investments required to build the infrastructure Asia needs to remove bottlenecks that raise costs and slow production. A failure to protect the environment poses another risk to sustainable growth. The region is already suffering from the loss of forest cover and biodiversity resources, deteriorating air quality and water pollution. The growing gap between energy demand and supply may be an even greater risk. Between 1973 and 2003, Asia's energy consumption grew 230 percent, compared with an average worldwide increase of 75 percent. Asia's share of greenhouse gas emissions soared to nearly one-quarter of the world's total.
A significant change in energy-use patterns is essential to steer away from the specter of per capita energy use rising to levels now seen in the developed economies. Asia's current energy development path, which focuses mainly on increasing the supply of low-cost, fossil fuel-based energy, is unsustainable.
Estimates by the International Energy Agency suggest that Asia could require up to $5 trillion in energy infrastructure investments over the next 15 years. These enormous investments must be directed at developing sustainable energy supplies and employing the technologies most efficient at mitigating the adverse impact on the global climate.
The response to these key challenges will shape Asia's growth and, in many ways, the futures of the 1.9 billion Asians who still live on less than $2 a day.
This is a period of great opportunity and importance for Asia and the Pacific. It can be the moment we secure our future. Or the moment we let the chance to end poverty slip away.
This article first appeared in the International Herald Tribune