Stephen Roach, chairman of Morgan Stanley Asia was interviewed by Clay Chandler in the McKinsey Quarterly following the release of his new book “The Next Asia: Opportunities and Challenges for a New Globalization about his views on the future for Asia.
Stephen Roach is quoted as saying “I think the Asia of the past 30 years has done an extraordinary jobâ€especially China, but, increasingly, the rest of the regionâ€in lifting standards of living well beyond anything we’ve seen in the annals of economic development. But, and here’s the big but, it is still some way from seeing the dawn of a new Asian century a century in which Asia is self sufficient and produces and consumes what its neighbors need rather than being reliant on exports to Europe and the USA. Specifically, Roach summed it up by saying, “The external demands that underpin the export model are now in trouble. So even if Asia is the best and most efficient producer that anyone has ever seen, the external demand is not going to be there the way it was. So if Asia wants to keep growing and developing, if it wants to keep raising the standard of living for its three-and-a-half-billion consumers, it has got to depend more on its own internal demand. So it really boils down to the fact that Asia’s options have been narrowed in terms of economic development as never before. And it has no choice but to become more internally, rather than externally, dependent.
If the interview is anything to go by, his book apparently reviews the prospects for India, Japan and the other SE Asian countries in addition to China and concludes that India has promise now that real political change has finally happened. Japan is probably consigned to many more years of poor growth and that the rest of SE Asia has to change its export dominated economies if it is to achieve any sustainable rise in living standards and create stable economies in the long-term.
You may feel you have enough of a synopsis to not read his book but that would be a mistake. I will be ordering my copy from Amazon. Roach has enough experience in the region to justify investing a week or two of my bed side reading. More details to follow post read.