Asia’s Economic Troubles Ahead: Lessons from the Biggest Example

Asia struggles with the same problems that the rest of the world faces.  Hosting nearly four and a half billion people, or roughly 60 percent of the world’s population, Asia’s problems are more or less the biggie-sized versions of those seen in the developed and underdeveloped countries of the West.  With the environmental and social carrying capable of Asia tested by the sheer number of people alone, the extreme nature of the problems faced in Asia offers the world  invaluable insights into how these problems may be addressed.
 
Due to its massive population and limited natural resources, which are increasingly strained by environmental phenomena, e.g. climate change, and socioeconomic developments, such as the rise of an Asian middle class, poor and destitute Asians struggle with increasing scarcity of basic human necessities, i.e. food, water, heating fuel, and safe shelter.  They also face increasing scarcity of socioeconomic necessities like running water, sanitation, access to reliable modes of transportation, electricity, and a general infrastructure deficient that prevents the poor of Asia from achieving economic security and stability.

Dividing Asia between the East and South, South Asia clearly faces a far more dire situation.  Through an apt history of foreign funding and investment, utilizing of natural resources, and constructive governance/regulation, economies like those of Japan, South Korea, Vietnam, Taiwan, and Hong Kong have been relatively successful.  For that reason, their access to, and participation in, the global economy shields the Peoples of these lands from issues like climate change and affords them a level of financial security that subsistence farmers do not enjoy. 
 
Lacking any level of financial security, those in largely agrarian economies struggle to enter the modern world and cope with everyone from mild food shortages to natural disasters.  Human civilization is designed to protect People from the brutality of nature. Those who are living in modern economies where food, water, and shelter are primarily purchased, instead of areas where individuals are preoccupied with the need to provide for this basic, are able to cope with climate change easier as the burden is shared.  Then again, participation in a formal economy is not necessarily enough.
 
Unfortunately, much of Asia is highly industrialized, yet its Peoples are subject to destitution and hazardous working, as well as living, conditions.  Although workers in third world industries participate in the global economy, their perpetual lack of financial security is fueled by economic trends that suppress wages in an effort to continually seek out the lowest bidder for goods. Underdeveloped countries may be able to attract foreign investment and jobs with cutthroat wages, but those jobs, and the incomes of the workers dependent on those jobs, quickly evaporate due to the mildest of economic downturns, price shifts, and geopolitical shifts.  In short, poor workers face a similar plight as subsistence farmers who find themselves at the mercy of environmental disasters. 
 
Looking at China and India as the most populous countries, both China and India have an economy that enriched their elites while excluding large pockets of their Peoples from the modern world. China has a bigger economy, but it also faces massive debt and an overreliance on overproduction while it struggles to reengineer an economy away exports and tenuous foreign demand in order to focus on domestic needs.    What China has cultivated is a superficial economy built on cheap labor, excess production, and massive bubbles fueled by government debt.
 
China’s authoritarian rule has allowed it to craft a massive manufacturing economy that attracted a lot of wealth through policies that exploited cheap labor.  Beijing may be adept at suppressing political dissent, but troubled times will bring China’s house of cards crashing to the floor.  In turn, increased civil unrest will cause even greater economic troubles.  Looking at the brutal manner in which the Indian military suppresses opposition in places like Kashmir, India faces a similar future, if it cannot learn to address problems in a more democratic, constructive manner.  It is, however, possible for both China and India to lead their countries, as well as the whole of Asia, through the troubled times ahead.
 
India and China have unparalleled human resources while they also have long histories of prosperity built on innovation and resourcefulness.  Thanks to the World Bank, the ADB, and AIIB, as well as other initiatives, there is a significant amount of capital available for development.  The lesson from China, as well as the US stimulus packages in the wake of the 2008 Great Recession, is, however, that government spending is not enough.  The lesson of the lowest bidder economy model is that foreign private industry is not enough.  Relying on foreign demand is not enough.  Creating artificial demand through government spending is not enough.
 
Success economics, such as those of Vietnam, Taiwan, and Hong Kong, are successful, because their innovators enjoyed the freedom and support to build new industries.  To build a successful economy, governments must free their Peoples and economies to develop their economy based on their needs and the availability of resources.  National economies must be built on industries that serve the local needs of a people with locally plentiful resources that are as local as possible with excess production being used to participate in the global economy.  Government spending can aid in this development by mirroring natural economic to ensure the proper infrastructure is there to support natural economic development.