Can Asia Grow Fast on its Own? The Economics of the Dynamic Middle

Current projections envision Asia’s emerging economies becoming the largest economic group in the world in the next two decades. Yet many observers warn that Asia's growth processes are unsustainable and could be headed for the “middle income trap.” This paper examines past growth engines — including exports to advanced economies — and those that might replace them. It argues that factors that will increasingly drive Asian demand — urbanization, infrastructure development and middle class consumption — are correlated with the region’s comparative advantages, could benefit from great scale economies, and offer the potential for substantial productivity growth. These reinforcing drivers of demand and supply do not guarantee future growth, but can provide autonomous foundations for the region’s development in the context of favorable economic policies