Asian Century

One term which gained currency in the millennium’s first decade was “Asian Century”. The term represented a promise, a prospect and a goal; and, invariably, was used with optimism. For a while, it was as evocative as the term “21st century” was in the 1980s, replete with visions of new vistas of life, living and development far removed from the poverty, deprivation and tribulations suffered by the world’s oppressed majority in the 20th century.

When the 21st century was actually upon us, much of the romantic yearning for it had ceased. Similarly, invocation of “Asian Century” ceased to resonate with the aspirations it brought to mind. It came to be used less frequently, especially in capitals such as Beijing and New Delhi. In the last few years, Asia’s movers and shakers seem to have all but abandoned both the phrase and the promise held out by its usage. If there are any who continue to harbour hopes of an Asian Century, they keep it concealed. Even those striving for it have stopped uttering what has become an empty cliché and mocks the impoverished masses of Asia, particularly of India and China, which dined out on the term at the world’s high tables.

The Asian Century meant different things to different countries. However, there was general agreement that it would mean the end of the American Century and a global power-shift from West to East. And, when the world’s centre of gravity moved from the western to the eastern hemisphere, then Asian powers China and India would emerge as the twin drivers of a new international order. The global financial crisis of 2008 — which saw western capitalism in a funk, India bucking the downtrend and China riding high on three decades of turbo-charged growth — further fed the ambition of an Asian Century.

Although the Asian Infrastructure Investment Bank (AIIB) has been launched and the IMF has included the Chinese yuan in the SDR basket as a fifth currency along with the US dollar, the British pound, the euro and the Japanese yen, there have been no game-changing moves towards reform of international institutions, particularly the prevalent financial architecture.

However, as much as international structures, there are serious internal challenges that hold back the continent, especially India and China, from taking any effective steps for bringing about the Asian Century. In their preoccupation with seasonal ups and downs of the economy, the market, the investment cycles and the currency, China and India tend to lose focus on the common, and central, challenge facing the two countries, namely: poverty and inequality. This is a challenge facing Asian economies, which is made worse by the disparity within countries, between countries and even within prosperous regional forums such as ASEAN.  

In the first 15 years of this century, inequality in India has increased. Economic growth benefited the top 1%, who appropriated most of the wealth created. According to Credit Suisse, the leading global financial services company, this top 1% of the Indian population owns more than 53% of the total private wealth in the country. Even among the top 1% of about 12.5 million people, just 0.2% — one fifth of the 1% — own more than 40% of India’s wealth.

In 2000, the wealth of this top 1% was 36.8%. Credit Suisse Global Wealth Data Book 2015 shows that in 2000, inequality in India was less compared to the world where the top 1% owned 48.7% of the world’s wealth.

However, in the last 15 years, India’s top 1% increased its wealth by 16.2 percentage points to 53%. In contrast, the share of the world’s top 1% rose by only 1.3 percentage points.

Among all the regions of the world, the data shows that India’s richest 1% own the largest share of their region’s wealth. The poorest own very little: the bottom 50% or 625 million account for about 4% of India’s wealth. The top 10% own 76% of total wealth, with only 24% left for the vast majority.

The figures reveal that India’s economic growth further enriched the top 1%. Out of the total wealth of $ 2.3 trillion created between 2000 and 2015, the top 1% appropriated $1.4 trillion (61%) and the next 9% got $ 0.5 trillion (21%). The 90% left behind got only $ 0.4 trillion (18%).

This deepening rich-poor divide is a threat to social and political stability. There can be no Asian Century until the gap within countries like India and between advanced Asia and developing Asia is reduced drastically.

Aiming for an Asian Century meant that the Asian giants could neglect poverty at home and in the region only at their peril. There was a time when, as much as India, China and international organisations, the problem engaged thought leaders such as Nobel laureates Amartya Sen, Martha Nussbaum and Joseph Stiglitz. The discourse on elimination of extreme poverty in India and China in the foreseeable future was visible and inspiring, and commanded as much attention as the political priorities of the season. That is no longer the case.

Today, there is no climate for sustaining the fight against poverty and inequality. Yet the enormity of the issue requires India and China to deal with the hard questions which haunt bilateral ties and thwart new possibilities of cooperation in the interests of developing Asia. For bringing about a shift in the global centre of gravity from the West to the East, India and China need to join hands and work in tandem. This requires greater trust, and recent initiatives to dissolve the distrust have not succeeded. 

Despite the rapport between the leadership, successful bilateral visits and booming trade, the recurrent strains and mutual distrust preclude any joint effort to combat poverty in the world’s two most populous nations. Sooner rather than later, China and India need to resolve disputes and strengthen trust for eliminating poverty in their respective countries and in Asia. Only when they accept this global responsibility, can the Asia’s Big 2 attempt the first steps towards ushering in the Asian Century.

The author is an independent political and foreign affairs commentator