The Asian century calls for a rethink on growth

It has become a truism, buttressed by the hard realities of economic performance, that the 21st century will belong to Asia. But there is a big problem to overcome first, and it is not the flashpoints in North Korea, the Taiwan Straits and Kashmir. It is the region’s dangerous pace of population growth, and the health, environmental and security problems caused by urbanisation on a scale unique in human history.

The United Nations is forecasting that the world’s population will rise by more than 40 per cent to 9.3bn by 2050, with the proportion living in cities increasing to 70 per cent from slightly more than 50 per cent today. But the impact will be concentrated in Asia, where two-thirds of the world’s population lives, and where rapid economic growth is accelerating the natural process of urbanisation. While Europe is dealing with the problems of ageing, Asia (excluding Japan) will be trying to cope with a rush to the cities estimated at nearly 140,000 people a day.

How well it succeeds will have a huge impact on whether this really does turn out to be the Asian century. So far, the signs are not good. About 550m people are living in slums and squatter settlements in the region, according to Anna Tibaijuka, head of Habitat, the UN agency responsible for the built environment. That is about 55 per cent of the global total, and it stems directly from a headlong rush for development that has largely ignored the consequences of growth.

The physical manifestations of the dash for gross domestic product are obvious over much of the continent. In Mumbai, shanty towns breed resentment among street dwellers starving next to the luxury apartment blocks of the rich. In Hong Kong and Shenzhen, air pollution clogs the lungs of billionaires and their immigrant maids alike. In Kuala Lumpur, cars belch fumes in barely moving traffic jams because no government has yet built a metro system.

Without substantial change, all this will get worse. The 2bn or so extra people who will move to Asia’s cities by mid-century will double or triple demand for health services, transport, energy, housing, sanitation, food and water. All these services will have to be delivered in the right place at the right time and in the right way, often by governments unable to cope with existing demand. To make things worse, most of the new urbanites will end up in informal settlements of fewer than 500,000 people, which fragments demand and makes it harder to deliver services efficiently.

The worst of these crises is already upon us. At least nine countries, including India and China, are officially regarded as “water stressed” because they have access to less than 1,700 cubic metres per person per year. Arjun Thapan, the Asian Development Bank’s special adviser on water and infrastructure, says the gap between supply and demand will reach 40 per cent by 2030, as population growth and rising prosperity trigger greater demand from industry and agriculture. Climate change is likely to make the shortage even worse. India, for example, gets much of its water from a short monsoon season. If rain falls more heavily than expected, or in different places, much of it may run off uncollected.

There are some signs that Asia is waking up to these problems. Governments are beginning to discuss them at events such as the twin conferences on world cities and water shortages taking place in Singapore this week. Some have adopted the novel approach of treating water as an economic resource, rather than a public good. Australia has cut its total water use to 30 per cent of a decade ago, in part by giving farmers title to their water. That means they can sell any surplus to those who need it, rather than allowing it to go to waste. In the Cambodian capital, Phnom Penh, the state-owned water utility has connected every building in the city to a new distribution grid, and is making a profit from supplies. Seepage is down to 6 per cent, compared with 50 per cent or more in some Asian cities. Residents get a reliable supply of clean, safe water, and are at least $18 a month better off because they no longer have to buy supplies from private vendors. In the richest countries, desalination and waste water treatment plants can also help.

What is really needed, though, is a new approach to growth. Noeleen Heyzer, head of the UN’s economic and social commission for Asia and the Pacific, says the impact of trying to maintain the existing growth pattern over the next 15 years would be environmentally and socially devastating. Governments in Asia, she says, “simply do not have the luxury of growing first and cleaning up later”.

If this is to be Asia’s century governments will have to transform economic and urban planning, delivering huge savings in areas such as energy and water use. Can it be done? Possibly. But don’t count on it. Good intentions, hard work and even adequate funding are not enough. A huge international effort to eradicate slums over the past decade moved 227m people out of poverty, according to the UN. But the actual number of slum dwellers rose by more than 50m. Such is the lure of the city, even if the reward is no job and a shack on a hillside with no water and no electricity.

The writer is the FT’s Asia regional correspondent