Economic power shifting east as Asia rises

In 1820, Asia accounted for two-thirds of the global population and more than one-half of the world GDP. The subsequent decline of Asia was attributable to its integration with the world economy shaped by colonialism and driven by imperialism. By 1970, Asia was the poorest continent in the world, marginal except for its large population. The deep pessimism about Asia's economic prospects, voiced by Gunnar Myrdal in Asian Drama, was widespread at the time.

In the half century since then, Asia has witnessed a profound transformation. By 2016, it accounted for 30 percent of the global GDP, 40 percent of world manufacturing, and over one-third of world trade, while its income per capita converged toward the world average. This transformation was unequal across countries and between people. Even so, predicting it would have required a bold imagination.

There were marked differences between countries in geographical size, embedded histories, colonial legacies, nationalist movements, initial conditions, natural resource endowments, population size, income levels and political systems. Despite such diversity, there are common discernible patterns. Economic growth drove development. Growth rates of GDP and GDP per capita in Asia were stunning and far higher than elsewhere in the world. Rising investment and savings rates combined with the spread of education were the underlying factors. Growth was driven by rapid industrialization, often export-led, associated with structural changes in the composition of output and employment.