Emerging Asia in general will have a significant role to play in global manufacturing. While currently accounting for 29 per cent of manufacturing, it will account for 43 per cent in 2060. However, its contribution to energy will decline from 37 per cent to 29 per cent while the USA and Canada’s share is forecast to increase. Emerging Asia will also capitalise on a burgeoning services sector, contributing an additional 15 percentage points of global services production in 2060.
Despite its recent position at the Bali negotiations on global trade, India can only gain from further trade liberalisation as well, regionally and multilaterally. Indeed, China’s clear superior trade performance over the past two decades has been due to a faster liberalisation of domestic trade barriers. We believe India has enormous future dividends to be realised from both multilateral and regional trade liberalisation. India’s trade is likely to be 25 per cent higher by the middle of the Asian Century in the event of multilateral trade liberalisation. However, recent steps backwards in the Doha round of negotiations do not suggest these gains are reasonably foreseeable at this stage.
This is an excerpt from a presentation by Glenn Maguire, ANZ Chief Economist, South Asia, ASEAN and Pacific, in Delhi, on 5 August 2014.