Is the Asian Century Over? ADBI Chief Outlines 5 Pillars to Escape the Middle-Income Trap

Is Asia's era of rapid growth coming to an end? In an opinion piece for Nikkei Asia, Bambang Brodjonegoro, the dean of the Asian Development Bank Institute (ADBI), has proposed five pillars to help the region's developing economies escape the notorious 'middle-income trap' amid a fracturing global economy.

He argued that it's time for a rethink of Asia's traditional development model, underscoring the need for a new economic blueprint. The proposal suggests that Asia, for decades the world's primary growth engine, is now facing a new set of fundamental challenges.

The Old Challenge: The 'Middle-Income Trap'

The middle-income trap is a development stage where a country, after reaching a certain middle-income level, gets stuck. It fails to transition to a high-income economy because it can't achieve productivity gains and technological innovation. Many Asian nations that relied on export-led manufacturing have long been seen as vulnerable to this stagnation.

Geopolitical tensions, particularly the U.S.-China rivalry and rising protectionism, are disrupting established global supply chains. Brodjonegoro's proposal seems to stem from the urgent recognition that a strategic shift is necessary for Asia to survive and thrive in this new reality of a 'fractured global economy'.

A Proposal for a New Growth Model

While the opinion piece didn't detail the specifics of the five pillars, the proposal's significance lies in the fact that it comes directly from the head of the ADBI. It's seen as a call for structural changes that promote sustainable and inclusive development beyond simple economic growth. Analysts speculate the pillars likely include elements such as technological innovation, human capital investment, strengthening domestic markets, a green transition, and governance reform.