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Evolving Asia: Growth, Challenges and

Opportunities – Asia’s Search for Leadership

Synergy

Tan Sri Dr. Munir Majid

Visiting Senior Fellow LSE IDEAS

and

Chairman of Malaysia Airlines

29 to 31st July 2011,

Phnom Penh, Kingdom of Cambodia

7th Asia Economic Forum

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Asia is evolving … GDP growth outpacing the world

World GDP growth GDP growth of developing Asia

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Share of GDP rising from 27% in 2010 to 51% in 2050

Global output (market exchange rates US$Trillions)Asian share of global outputGlobal growthAsia GrowthAsian share of global growthGlobal GDP per capita (PPP)Asian GDP per capita (PPP)

62

27.4%

10,7006,600

90

33.5%4.0%5.8%

55.7%14,30010,600

132

38.9%3.9%5.2%

59.3%19,40016,500

195

44.5%3.8%4.8%

62.8%26,60025,400

292

50.6%3.6%4.4%

66.0%36,60038,600

2010 2020 2030 2040 2050

Source: Centennial Group Projections 2011

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Evolving Asia … The emerging middle class is a key driver

Source: Centennial Group Projections 2011

The middle class is the source of savings and entrepreneurship that drives new products and processes. Growth comes mainly from new products and most growth happens when new products are targeted at the middle class. Consumption by the global middle class accounts for one third of total global demand.

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The engines of the Asian Century are the Asia-7 economies

PRCIndiaIndonesiaJapanRepublic of KoreaThailandMalaysiaTotal Asia-7

5.71.40.75.41.00.30.2

14.8

62.940.411.48.23.73.22.6

132.4

2010 GDP (MER

trillion)

2050 GDP (MER

trillion)

MER- Market exchange rate

Source: IMF World Economic Outlook, Oct 2010; Centennial Group Projections 2011

Between 2010 and 2050, they

will account for 87% of total GDP

growth in Asia and almost 55% of

global GDP growth. They will

thus be the engines of not only

Asia’s economy but also the

global economy.

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There are mega challenges to overcome ..

• Inequities within countries (eg between the coastal and western regions of PRC)

• The risk of falling into the Middle Income Trap

• Intense competition for natural resources (energy, water, fertile land)

• Rising disparities across countries could destabilise the region

• Global warming, climate changes and natural disasters could threaten agricultural

production, coastal populations and urban areas

• Almost all countries face the challenge of governance and institutional capacities

Source: Asia 2050, Asian Development Bank 2011

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