FOREIGN AFFAIRS

NOVEMBER/ DECEMBER 1997

Asia's Reemergence

Steven Radelet and Jeffrey Sachs

Volume 76 • Number 6
The contents of Foreign Affairs are copyrighted. © 1997 Council on Foreign Relations, Inc. All rights reserved.

Asia’s Reemergence
Steven Radelet and Jeffrey Sachs capitalism leaves its western enclave Beginning in the early 1500s, for more than four centuries now, the West has been ascendant in the world economy. With but 14 percent of the world’s population in 1820, Western Europe and four colonial oªshoots of Great Britain (Australia, Canada, New Zealand, and the United States) had already achieved around 25 percent of world income. By 1950, after a century and a half of Western industrialization, their income share had soared to 56 percent, while their population share hovered around 17 percent. Asia, with 66 percent of the world’s population, had a meager 19 percent of world income, compared with 58 percent in 1820. In 1950, however, one of the great changes of modern history began, with the rapid growth of many Asian economies. By 1992, fueled by high growth rates, Asia’s share of world income had risen to 33 percent.⁄ This tidal shift is likely to continue, with Asia reemerging by the early 21st century as the world’s center of economic activity. Asia’s sudden ascent has become something of a Rorschach test for the economics profession and the foreign policy community. For some, Asia’s rapid growth is an economic miracle that calls for a reevaluation of Western economic strategies. For others, such as the mit economist Paul Krugman, writing in the November/December 1994 Foreign Affairs, the rapid growth has looked hollow. Not only has there been no miracle, but there was reason to believe that Asian growth might display weaknesses similar to those of the period of rapid Soviet growth in the 1950s and 1960s. These doubts seemed to
Steven Radelet is an Institute Associate at the Harvard Institute for International Development.