The region’s future economic growth path looks increasingly bifurcated, something that banks and bankers are beginning to realize. 

A new Asian miracle may be in the making right before our very eyes. This one, however, is likely to be fronted by the likes of India or Indonesia, whose growing populations and expected GDP growth rates over the next decade could leave all other regional contenders in the dust. 

An overnight graphic by online publisher Visual Capitalist provides another take on what is becoming an increasingly divergent region economically. Over the next ten years, India will place third worldwide when it comes to the growth of its working-age population, followed by Indonesia in seventh and Australia in eighth. 

However, the statistic doesn’t factor in that India’s population already leads the world at over 1.4 billion while Indonesia is no slouch at 275 million. The populaces of all the other extra-regional contenders who make the top ten range from relatively minute, (United Arab Emirates, 9 million), medium (Saudia Arabia/36 million – South Africa /59 million), to modestly largish (Mexico/128 million).

Large Decline

But Asia also puts in a big showing at the other end of the very same scale. South Korea is expected to have the largest decline in working population in the 33 countries surveyed over the next decade, with Japan in fifth, and Thailand in eighth.

China, the most important economic force in the region, and the most populous, comes in 11th place, with the mainland expected to suffer a decline of 0.4 percent in its working-age population.

Double-Tracked

The statistic reinforces a message we have been propounding for some time but at the same time, it shows that future growth is going to be increasingly double-tracked.

That is something that banks and senior bank executives are now realizing. UBS CEO Sergio Ermotti, for example, noted in comments made on finews.asia earlier today that growth in Asia is expected to be «less linear».

Focused Investments

Reading between the lines, it appears to hint the impact is already being felt directly economically (likely the «absolute terms» that were cited) even though prevailing wealth creation and demographic trends will allow the Swiss bank to keep investing in a focused manner.

That is still a big comedown from a decade or two back when every bank in the world was trying to build up businesses here in the region without much of a thought as to sustainability – or profitability, something that VP Bank’s recent pullback from Hong Kong also seems to imply.

Again, India

Another graphic released Tuesday puts that growth in stark perspective. India’s annual GDP growth of 6.3 percent is expected to outpace all the other major economies in the world. 

But they are closely trailed by Indonesia at 5.5 percent. China, however, still manages to put in a respectable 4.0 showing, although that figure is beginning to look suspiciously G-7-like, albeit after an outstanding year.

Shifting Away

A decade from now, when the dust has settled, we could be looking at an entirely different regional economic paradigm, with much of the onus of economic activity shifting to the subcontinent and, possibly, Indonesia.