The focus shifts firmly to Asia once again after three centuries. The EU is overladen with huge external debt with most of the countries posting close to or more than 100 per cent debt to their Gross Domestic Product (GDP). They are still either reeling under covid-driven recession or recording sluggish growth. It appears the supremacy of the western hemisphere is nearing its end. India and China are recording phenomenal growth and are ready to take the top two spots of world economy, making Asia rapidly gain ground as the epicenter.
Now that Bangladesh (6.6 per cent), Indonesia (4.9 per cent), the Philippines (5.4 per cent), Thailand (1.8 per cent) and Vietnam (6.5 per cent) are also showing impressive acceleration in their economic growth, and some of them are set to end up in the top 10 by 2045 or 2050, according to the current data of the International Monetary Fund. Noteworthy is their contribution to the regional supply chain and their role in world trade.
This performance can be attributed to the three-month tariff pause caused by front loading that boosted the trade in the second quarter. Indonesia and Vietnam received stronger orders in electronics, footwear, apparel and machinery. This is a solid indicator that these economies are smallish, but significant. Of course, there is a risk of these economies slightly tapering owing to the reciprocal tariffs coming into effect last August. Not much damage is done, these economies are looking up well in the longer term and would be in the main scheme of things in Asia’s trade realignment.
These often under-rated countries have demonstrated remarkable resilience, emerging as mini economic powerhouses of Asia despite challenges the new hostile tariff deal, which may only slow growth in the short term. Together, they are helping Asia solidify its position as the world’s economic core. Alongside the Tiger economies and major players like China, India, and Japan, nations such as Indonesia and Vietnam are projected to rank among the world’s top ten economies by 2050. n