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“The Role of Asia in the Global Economy - Current Strengths and Vulnerabilities” Dan O’Brien, Chief Economist, Institute of International and European Affairs speaking on June 6 at the Fourth EU Asia Top Economist Round Table during Asia Business Week Dublin 2014
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ASIA BUSINESS WEEK DUBLINFourth EU Asia Top Economist Round Table
6 June 2014
The Role of Asia in the Global Economy – Current Strengths and Vulnerabilities
Dan O’Brien
Chief Economist, Institute for International and European Affairs
Kindly sponsored by:
[email protected] Twitter: @danobrien20
The Role of Asia in the World Economy
Dan O’BrienChief Economist
Institute for International and European Affairs
Demographics as destiny
• The world economy is rebalancing to reflect population distribution
• West V rest income disparities since industrial revolution are a historical anomaly
The world's most populous countries
China
Indi
aUS
Indo
nesia
Brazil
Pakista
n
Nig
eria
Bangl
ades
h
Russia
Japa
n
Mex
ico
Philli
pine
s
Vietn
am
Ethio
pia
Egypt
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
• Asia is leading the rest in the catch up process
• The West (including Japan) is slowing• Secular stagnation?• The end of growth?
1980s 1990s 2000s0
0.5
1
1.5
2
2.5
3
GNI per capitaAverage annual % change
GDP growth, annual % change(five year rolling average)
00.5
11.5
22.5
33.5
44.5
5
Major advanced economies (G7)
World
Half a century of slowdown
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07 EU15 GDP growth (% annual change, five year rolling
average)
• Asia’s share of global imports is growing
• But geography is still crucial– Distance is not dead
• Foreign direct investment is deepest form of integration – Transatlantic relationship
2003 2008 20120
500
1000
1500
2000
2500
3000
3500
4000
4500Irish exports of goods and services to
China (€m)
2003 2008 20120
0.5
1
1.5
2
2.5
Exports to China as % share of total Irish exports
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
2
4
6
8
10
12
14
16
Developing Asia% share of world outward FDI stock
Asia strengths
• Catch up potential• Integration potential• High savings and investment• Rise of Asian multinationals
Asia challenges
• China bubble?• Abenomics?• Modi-nomics?• North-East Asia security issues• South China Sea security issues
