ASEAN, PRC and India: The Great Transformation by Asian Development Bank Institute (review)

In the past two decades, the three emerging Asian giants, namely the Association of Southeast Asian Nations (ASEAN), China, and India have registered impressive economic growth and political stability. Together, the three entities (termed as ACI in the work under review) comprise around half of the world population and roughly a quarter of the global gross domestic product (in Purchasing Power Parity terms).

This book fills a critical gap by devising a new term for these Asian markets, which are not only capable of transforming into engines of growth in the medium to long term, but have also been facing similar social and economic issues. Environmental challenges are likely to be even more daunting, such as: the haze problem in Indonesia, Malaysia, and Singapore; New Delhi’s extreme pollution; and the worsening environmental condition of Beijing and Shanghai.

What makes the term “ACI” even more fascinating is that its constituent territories have contiguous boundaries, historical and cultural similarities as well as an abundance of human and natural resources. This book focuses on the prospects and challenges for growth and transformation of ACI’s swiftly growing economies by 2030, while outlining a set of feasible policy reforms needed to effectively meet the challenges.

The book revolves around the idea that ACI is “in the midst of a historic transformation that will dramatically improve the living standards of their three billion people and lift hundreds of millions from poverty … The size of their combined economy would exceed those of the European Union and the United States taken together … Thus, the ACI group could become the principal engine of global economic progress.” (p. xxvii).

The resilience of ACI is evident from the fact that the 2008 Global Financial Crisis and the 2009 Eurozone Debt Crisis severely affected the Western world, but these economies remained largely unaffected. Taking cues from the 2008–09 crises, the book argues that while ACI economies are in good health, caution is in order, since future economic downturns might affect private capital inflows and investor confidence along with a downfall in exports in the ACI region. In that context, the study suggests that ACI should devise “prudent short-term policies” and drive more investments and reforms home (p. xx). However, while the study highlights the importance of studying the growth and development of ACI economies, focussing on the commonalities and accords, it seems to overlook the differences and discords among them. For instance, it does not give enough attention to an unfolding major trend in the ACI: the slowdown of the Chinese economy; nor does it address the issue of poor strategic communication between India and China that poses a major challenge to their mutual understanding.

While the book does not attempt to answer one central puzzle, it has one broad theme, i.e., what is it that the ACI region should do to realize its fullest potential? Divided into eight succinct chapters, this work envisions the future course of action for the ACI, which is ambitious yet implementable. The book questions the “uncertainty in achieving the dramatic transformation by 2030 unless these economies can successfully manage major challenges and risks” (p. xx).

The book covers several important aspects of ACI: scope of transformation; prospects of growth and development; and progress and remaining gaps in achieving inclusive growth. It may serve as an essential policy document to ACI economies, particularly India, which has initiated major employment-oriented and capacity building initiatives such as Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), Sarva Skisha Abhiyan (SSA), Jan Dhan Yojna (JDY), Make in India, Stand Up India, Start Up India, etc. It also examines the prospects of expanding and deepening regional production networks and supply chains, upgrading technology and innovation, and enhancing regional and intra-regional infrastructure and connectivity.

Both India and China are energy hungry economies and two of the biggest carbon emitters. Water issues have also been complicated between them. Despite being upper and lower riparian states on the...