ASIA PACIFIC – ENGINE OF GROWTH
Introduction
• Asian-Pacific region is the region in Asian continent that includes East Asia, Oceania and
South Asia.
• Asian-Pacific region has been flourishing since the late 20th century because the
industrialization hit the world during this period.
• As political power and economic power has been shifting to this region from the last five
decades, due to this the current century will be recognised as the “Asian Century”
Growth of GDP
• GDP of Asia is high in this region as compared to the rest of the world. Investors around
the world feel that the region will grow very well and relate it to the growth of London
and USA and due to this the FDI in this region are also very high.
• Asian Pacific region comprises of 9 of those 20 major metropolitans. Delhi, Karachi,
Mumbai Tokyo etc. are some of the major cities in the Asian continent.
• $30 trillion is the current GDP of the region
Reasons for growth of GDP
1. Decreasing poverty – There is not only social growth, but there is financial growth also.
The poverty decreased as there is development taking place.
2. CONNECTIVITY- Connectivity among the different countries helps to transport raw
materials and finished goods at a low cost this is one of the reason, a lot of
manufacturing plants have been set up in this region.
3. PURCHASING POWER PARITY- in terms of purchasing power parity, Asia and Pacific
region holds around 40-45 percent of the share of worldwide GDP.
Issues of concern
1. OBOR
2. SOUTH CHINA SEA DISPUTE
3. TRADE WARS (US-CHINA)
OBOR -
One Belt One Road (OBOR) is a project WHICH focuses on connectivity and
cooperation among many countries across the continents of Africa, Asia, and Europe.
It was announced in 2013, it includes building networks of railways, roadways, maritime
ports, gas and oil pipelines, infrastructure projects.
It has 2 parts
1. 21st Century Maritime Silk Road: It is likely to connect China’s southern coast to
the Mediterranean, Africa, South-East Asia and Central Asia. It is based on sea
2. Silk Road Economic Belt: It is likely to connect China with Central Asia, Western
Europe.and Eastern Europe. It is land based.
Advantages to India
it will help in improving strategic and economic relationship with other countries
because of connectivity.
It will help in building infrastructure in border of india and other areas
Advantages to China
It will help in improving economic relations with neighboring countries.
It will help China access to mineral and energy supplies which will allow them get
access to maritime facilities which are in the Indian Ocean.
Issues with OBOR
1. The project will take many years to complete and may even fail.
2. China will get control to the ports if members fail to repay the loans.
SOUTH CHINA SEA DISPUTE:
South China Sea is a part of the Pacific ocean AND is bordered by some of the ASEAN countries
and China. The South China Sea is considered one of the busiest waterways in the world. It is
very significant for trade. The dispute has maritime and island claim, in the region by 7
countries that are Brunei, China, Indonesia, Malaysia, Philippines, Taiwan, and Vietnam.
Why are the nations disputing over the South China Sea?
1. South China Sea plays an significant role in the geopolitics of the Indo-Pacific region. It
comprises one of the busiest shipping lanes in the world.
2. There are Natural resources like oil and gas, and fishing is other reason for claims over SCS.
3. the region holds around 11 billion barrels of oil.
4. contains one of the unexplored oil and gas reserves in the world
TRADE WARS – Trade war is a situation where countries restrict each other’s trade by imposing
tariff on imports. US aimed at China, its “Made in China 2025” programme — WHICH IS an
initiative to transform China into a manufacturing powerhouse. The tariff will damage the trade
agreements under WTO. US and China need to negotiate the issue harmoniously and not put
the free trade under threat.
TO SOLVE THE ISSUE- to protect the economies and to have stable trades There are many
bodies formed by governments of various countries of Asia.
APAC and ASEAN are some of the most popular bodies created to have smooth trades within
Asian countries to increase Asia’s geostrategic significance.
WAY FORWARD - the region will grow even at a better rate than it does now as the
infrastructure development will be complete in most parts of the Asian Pacific region which will
help push the world economy because of better connectivity.
