These themes are timely since Asia still faces developmental challenges despite its growth miracles, while Asia's stake in the global economic recovery is high with the ADB projecting Asia's global economic share to be 61 percent by 2050.

Asia's success is not pre-ordained, said Shigeo Katsu, a senior associate of the Centennial Group, at the Asia 2050 meeting. He proposed three possible scenarios for Asia in 2050.

First is the benchmark case of “converging Asia” in which production chains and networks and total factor productivities, especially in China and India, continue on their current tracks. Second is the “non-converging Asia” in which Asian countries, especially India and China, are trapped as middle-income countries with poor institutions and governance as well as growing inequalities and urbanization buzz. Third is the “prosperous Asia”.  

Asia's projected world GDP shares are 61 percent, 44 percent, and 56 percent respectively in these three scenarios.

For anyone who hails a rising Asia, Emil Salim, chairman of Indonesia's presidential board of advisors, challenged this perception. Foreseeing an unbalanced Asia in 2050 between the “Asian eight” — India, Indonesia, Japan, Malaysia, China, South Korea, Thailand and Vietnam — and the rest of Asia as dictated by a solely market-based economy, is Asia moving in the wrong direction?  Or, should Asia look more into equitable and environmentally sustainable trajectories?  

Looking at individual countries’ growing inequalities — a highly developed, urban-based western Indonesia and an underdeveloped eastern Indonesia, a rising inequality between the rapidly modernized coastal areas of eastern China and the poverty-stricken western-most regions of China, and a strikingly diverse poverty rates among Indian States — Asia's jewels and economic growth miracles should not become regional hubris. Asia needs not only physical connectivity, such as infrastructure, but also mental, person-to-person, heart-to-heart and institutional connectivity in social, educational and human resources sectors, Emil asserts.

Taking elements other than economic growth into account, we are facing “two faces” of Asia. The first face consists of newly industrialized economies, including South Korea, Malaysia, Singapore, Taipei, Thailand, China and India. The second face comprises resource-rich, low-income, and less-developed countries and smaller Asian states.

The “Asia development agenda” symposium stressed three methods to bring more equitable development between the two faces of Asia, and within each individual Asian country: Aid for trade, financial inclusion, and social safety nets.       

What I would like to bring to the surface in Emil Salim's assertion about Asia's trajectory is the institutional factor. The interpretations of institutions are many, but one element I believe is a truly important factor in shaping all institutions — an element that often is downplayed by many economists — is cultural and social norms.  

Kaushik Basu’s new book, Beyond the Invisible Hand, released in 2010, correctly argues that culture and social norms are as important as law. This is easily understood if we accept the fact that human beings are social beings — we react to what others do instead of just following our innate feelings and most of the things we do are dictated by automaticity shaped by cultural and social norms in which we are brought up.

This leads to the fact that “equilibrium differences” are bigger than “innate differences”.

This is why the Asian jewels — China, Indonesia and India — may be trapped in the “low equilibrium” with people’s bad behavior reinforcing itself and rising in these market-based countries with persistently high economic growth but poor institutions, governance and even political environments.  

One other important issue in complement to Emil Salim’s institutional, social and ecological contentions is the regional and global cooperation to build a more equitable and sustainable Asia.

The Asian jewels’ foreign policies have been outward-looking and their stakes at the high-tables are big: India hosted leaders from all five permanent members of the United Nations Security Council last year; Indonesia will host the first expanded East Asian Summit this year with two new members, Russia and the US, and with a possibility of hosting the G20 Finance Ministerial and Central Bank Governors’ Meeting in 2013, and China’s Hu Jintao’s 2011 visit to the US will set the basis for the coming decades of a bilateral relationship whose stability is also in the best interests of the rest of the world. “Soft policies” coming from the region are necessary.  

Mahendra Siregar, Indonesian deputy minister of trade and the Indonesian G20 sherpa, correctly reminded us that Asia’s outward-looking strategies should be geared towards re-orienting our focus on how Asia can contribute to the global economic recovery and not vice-versa.                        

Unless all these are being pursued, a “rising Asia” hidden behind high economic growth figures seems to be a misnomer.

The writer is a researcher at the Centre for Strategic and International Studies and a lecturer at the Department of Economics, University of Indonesia.

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