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The economy of Asia comprises more than 4,000,750,000 people (60% of the world population), living in 46 different states. In addition to this there are six further states that lie partly in Asia, but are considered to belong to another continent economically and politically.
As in all continents, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of differing cultures, environments, historical ties and government systems. The largest economy in Asia in terms of GDP is Japan, the smallest Mongolia, (although there is currently no reliable data for either Iraq or North Korea). This demonstrates the huge disparity in wealth on the continent, with Japan being the world's second largest economy, and North Korea being one of the poorest.
Economic development
to be completed - dates taken from European version, need to be changed to reflect major economic changes in Asia
Pre-1945
Asia was relatively rich in the ancient times. China was a major economic power and attracted many to the east. The Silk Road became the main east-west trading route in the Asian hitherland while the Straits of Malacca stood as a major sea route. In the Straits of Malacca, Malacca established itself as an important port in Asia.
Prior to the Second World War, most of Asia was under colonial rule. Only relatively few managed to stay independent despite constant pressure from many European powers.
Japan in particular managed to develop its economy thanks to reformation done in the 19th century. The reformation was comprehensive and is today known as the Meiji Restoration. The Japanese economy continued to grow well into the 20th century. Their ever increasing economy created various shortage of resources essential to the economic growth. As a result, the Japanese expansion began and a great part of Korea and China were annexed and thus, allowing the Japanese to secure strategic resources.
At the same time, Southeast Asia was prospering due to trade and the introduction of various new technologies of that time. The volume of trade continued to increase with the opening of the Suez Canal in the 1860s. Singapore, founded in 1819 rose to prominence as trade between the east and the west increased at an incredible rate. The British colony of Malaya, now part of Malaysia, was the world's largest producer of tin and rubber. The Dutch East Indies, now Indonesia on the other hand was known for its spices production. Both the British and the Dutch created their own trading companies to manage their trade flow in Asia. The British created the British East India Company while the Dutch formed Dutch East India Company. Both companies maintained trade monopoly of their respective colonies.
In 1908, crude oil was first discovered in Persia, modern day Iran. Afterwards, many oil fields were discovered and it was learnt later that the Mideast prosesses the world's largest oil stock. This made the rulers of the Arab nations very rich though the socioeconomic development in that region lagged behind.
In the early 1930s, the world underwent a global economic depression, today known as the Great Depression. Asia was not spared and suffered the same pain as Europe and the United States. The volume of trade decreased dramatically all around Asia and indeed the world. With falling demand, prices of various goods starting to fall and further impoverished the locals and foreigners alike. In 1941, Japan invaded Malaya and hence, begun the Second World War in Asia.
1945-1990
During these years, mainland China and India, which account for half of the population of Asia, adopted socialist policies.
These policies limited the economic growth of this region. In contrast, the economies of Japan and the four East Asian Tigers were economic success stories and the only successful economies outside of North America and Western Europe.
Wars driven by the Cold War, notably in Vietnam and Afganistan, wrecked the economies of these respective nations.
to be completed - dates taken from European version, need to be changed to reflect major economic changes in Asia
1991-2004
After the liberalization of the Indian Economy undertaken by the then Finance Minister and current Prime Minister of India Dr. Manmohan Singh, the Indian economy coupled with the Chinese economy which was already booming with the wise economic measures undertaken by Jiang Zemin powered Asia to being one of the hotspots for world trade. Currently, as these two economies are growing at well over 6% per year, Asia has started showing its potential. One of the favorable (or unfavorable, depending upon one's point of view) is the sheer size of the population in this region.
Meanwhile, Thailand, Malaysia and Indonesia emerged as the new Asian tigers with their GDP grew well above 7% per year in the 80s and the 90s. The economies were mainly driven by growing exports.
Throughout the 1990's the continents manufacturing ability and cheap labour markets allowed Asian companies to establish themselves in many of the industries previously dominated by Western companies. Asia became one of the largest sources of automobiles, machinery, audio equipment and other electronics.
At the end of 1997, Thailand was hit by currency speculators and the value of baht along with its annual growth rate fell dramatically. Soon after, the crisis spread to Indonesia, Malaysia, South Korea, Singapore and many other Asian economies and inflicted great economic damage to the affected countries. In fact, some of the economies actually contracted. This later would be known as the Asian financial crisis. By 1999, most countries have already recovered from the crisis.
In 2004, parts of Sumatra and South Asia were severely damaged by an earthquake and the subsequent tsunami. The natural disaster wiped out huge amount of infrastructure throughout the affected area and displaced millions.
to be completed - dates taken from European version, need to be changed to reflect major economic changes in Asia
Future
The continent of Asia faces severe disparities, which is a source of major tension in the region. While "Tiger Economies" such as China, India, South Korea, Japan, Taiwan (ROC), Thailand and Malaysia keep powering their way through, there are regions right next to these countries that are in need of severe assistance.
Clearly, the cheap and amply available labor, particularly in China and India are giving it an advantage over other countries, the rising standard of living in these countries will eventually lead to a slow-down. The continent is also riddled with political problems that threaten not just the economies, but the very existence of humankind on this world. The nuclear neighbors - China, India and Pakistan constantly pose a threat to each other, causing their governments to heavily invest in military spending, something which a country like Pakistan can ill-afford. North Korea continues to threaten South Korea and Japan, something which is a cause of grave concern. Terrorist threat in Central Asia is also a cause of worry and with the rise of Islamic extremism posing a severe threat to other countries.
The US intervention in Afghanistan and Iraq has also fanned the flames of the extremism that has caused many bomb blasts in Saudi Arabia among other countries. Another impending crisis is the running out of oil reserves in Arabia region. Most of these economies have traditionally been over-dependent on oil and are finding hard to establish another pillar in their economy.
While some parts of Asia are clearly headed in the correct direction, others are headed toward a disaster, making the prediction of the economic future of this continent impossible.
Regional variation
to be completed
Trade blocs
Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC) is a group of Pacific Rim countries who meet with the purpose of improving economic and political ties. There are currently 22 members.
Association of Southeast Asian Nations
The Association of Southeast Asian Nations (ASEAN) is a political, economic, and cultural organization of countries located in Southeast Asia. Founded in 1967, its aim is to foster cooperation and mutual assistance among members. The countries meet annually every November in summits.
The current member countries of ASEAN are Myanmar (Burma), Laos, Thailand, Cambodia, Vietnam, Philippines, Malaysia, Brunei Darussalam, Singapore and Indonesia. Papua New Guinea is given an observer status.
ASEAN contains a few of the fastest growing countries in the world.
Closer Economic Partnership Arrangement
The Closer Economic Partnership Arrangement (CEPA) is an economic agreement between the People's Republic of China and both the Hong Kong SAR government (signed on 29 June 2003), and the Macau SAR government (signed on 18 October, 2003), in order to promote trade and investment facilitation.
The main aims of CEPA are to eliminate tariffs and non-tariff barrier on substantially all the trade in goods between the three, and achieve liberalization of trade in services through reduction or elimination of substantially all discriminatory measures.
Commonwealth of Independent States
 Flag of the Commonwealth of Independent States The Commonwealth of Independent States (CIS) is a confederation consisting of 12 of the 15 states of the former Soviet Union, both Asian and European, (the exceptions being the three Baltic states). Although the CIS has few supranational powers, it is more than a purely symbolic organization and possesses coordinating powers in the realm of trade, finance, lawmaking and security. The most significant issue for the CIS is the establishment of a full-fledged free trade zone / economic union between the member states, to be launched in 2005. It has also promoted cooperation on democratisation and cross-border crime prevention.
South Asian Association for Regional Cooperation
The South Asian Association for Regional Cooperation (SAARC) is an association of 7 countries of South Asia, namely Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. These countries comprise an area of 4 480 000 km² and a fifth of the population of the world.
SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics control and anti-terrorism.
South Asia Free Trade Agreement (proposed)
The South Asia Free Trade Agreement is an agreement reached at the 12th South Asian Association for Regional Cooperation summit. It creates a framework for the creation of a free trade zone covering 1.4 billion people in India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives.
Currency
Below is a list of the currencies of Asia, including all fully Asian states plus Russia, with exchange rates between each currency and both the Euro and US Dollars as of 9th December 2004.
Table correct as of 9th December 2004 (see [1] (http://www.xe.com/ucc/full.shtml) for latest
Economic sectors
Primary Sector
The Asian continent is by a considerably margin the largest in the world, and is rich in natural resources. The vast expanse of former Soviet Union, particularly that of Russia contains a huge varity of metals, such as - gold, iron, lead, titanium, uranium, and zinc. These metals are mined, but not in an efficient manner due to continued use of poorly maintained, obsolute machinery left over from the communist era. Despite the inefficency of the mining industry, profits are high due to a commodity price boom in 2003/2004 caused largely by increased demand in China. Oil is perhaps Asias most important natural resource. The middle eastern nations of Saudi Arabia, Iraq, and Kuwait are rich in oil reserves and have benifited from recent oil price escalations. Asia is home to some four billion people, and thus has a well established tradition in Agriculture. Due to the high population density of many countries such as Bangladesh, China, Cambodia,India and Vietnam, agriculture constitutes a high portion of land usage. Many hillsides are farmed in a terrace method to boost arable land. The main agricultural products in Asia include Rice, Grain, and Chicken. One of Asia's major cash crops is Opium, which is sold in Europe and North America. Opium production is one of the princial economic activities in Central Asia - particularly in Afghanistan and a major employer. Forestry is estensive throughout the continent, with many of the items of furniture sold in the Western World made out of Asian timber. Fishing is a major source of food in Asia, particularly in Japan and China.
Secondary Sector
The manufacturing sector in Asia has traditionally been strongest in the South East region - particularly in mainland China, Taiwan, Japan and Singapore. The industry varies from manufacturing cheap low value goods such as toys to high-tech added value goods such as computers, CD players, Games Consoles and Cars. Major Asian manufacturing companies include Sony, Samsung, LG, Toyota, Honda, and Nissan. Many western firms from Europe and North America have significant operations in Asia to take avantage of the continents abundant supply of cheap labour. One of the major employers in manufacturing in Asia is the textile industry. Much of the world's supply of clothing and footwear now originates in Southeast Asia - particularly in Vietnam, China, Thailand, and Indonesia.
Tertiary Sector
Asia has three main financial centers. They are located in Hong Kong, Singapore and Tokyo. Call centers are becoming major employers in India due to the availablity of many well educated English speakers. The rise of the Business Process Outsourcing (BPO) industry has seen the rise of India and China as the other financial centers. Experts believe that the current center of financial activity is moving toward "Chindia" - a name used for jointly referring to China and India - with Shanghai and Mumbai(Bombay) becoming major financial hubs in their own right
Global trade relations
Economy by country
States which lie partly in Asia but are considered, in an economic and political sense, to be European:
States which lie partly in Asia but are considered, in an economic and political sense, to be African:
See also
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