Many have dubbed this the 'Asian Century' with Asia's robust economies leading us to believe that all is well in a region that has generated some of the fastest growth and poverty reduction in history.
"Factory Asia's" growth has been underpinned in great part by its exports to Europe and the Americas, a model we now know to be under threat. The Eurozone is expected to stutter along with growth of just 0.5% and the U.S. fares only slightly better at 2.1%, almost certainly resulting in western households continuing to hold off on buying cars, stereos and other products coming from Asia.
The temptation for American policymakers facing tough times at home is to hunker down and focus on domestic concerns, letting Asia take care of its own problems. But a more robust Asia can open up new opportunities for American businesses in the region, support rising levels of trade, and underpin an expansion of Asian tourism in the West.
Adopting protectionist, inward looking policies, by contrast, may provide a short term domestic palliative but in the long run this can restrict trade flows, destabilize capital flows and causing prolonged surges in inflation, with extremely damaging consequences.
Such a course of action would not only undermine the West's own interests, it would cast more of the world's poor back into poverty.
The region may have become synonymous with new found wealth, but Asia has two faces, and the second is one where more than 750 million people subsist on a daily budget that is less than most Americans spend on a single cup of morning coffee.
While tremendous gains have been made in the fight against poverty, not enough of the region's economic prosperity is reaching its poorest people. Nearly half a billion Asians still lack access to safe drinking water, and infant mortality in many Asian nations is more than 10 times higher than the levels seen in developed economies.
The global economic downturn is likely to diminish already scarce job opportunities and push the cost of food further out of reach, widening the gulf between Asia's rich and poor.
As we have seen in other parts of the globe, if left unattended, this growing gap in prosperity could aggravate social, economic and political tensions, presenting a new -- and costly -- set of challenges that the West will inevitably have to contend with.
So what should the West do? Aid by itself is not the answer. But with carefully calibrated support from governments and the private sector, Asia can continue to close the economic gap and release its vast potential, which ultimately, is in the U.S. and the world's best interests.
Asia must do its part. It needs to create better conditions for the private sector to take the lead on economic expansion, continue to promote economic diversification, and it must be willing to spend more of its own capital resources on regional road, sea and air networks, which will ultimately bring down the cost of trade.
These are areas where Western governments can help. By working in tandem with public lenders to make relatively modest investments in infrastructure, for example, they can help catalyze much larger sums from the private sector. We are already seeing this in a rising number of public-private-partnerships in the region, but the process still has a long way to go.
The future health of economies in the world's most populous region is inextricably tied to what is happening elsewhere around the globe. Europe's sovereign debt crisis, the U.S.'s slow recovery and rising commodity prices are, without a doubt, a clear and present danger to Asia's well-being. Conversely, a weaker Asia presents a host of threats to the West's future growth and prosperity.
Unlocking Asia's economic potential can mitigate political risk and create new markets that will help the West transcend the current crisis. The Asia-Pacific region still presents this century's greatest economic opportunity, and if the U.S. can tap into the region's growth and dynamism it too stands to benefit, helping make this a 'Pacific Century' where both Asia and the West prosper.
Stephen P. Groff is Vice-President of the Asian Development Bank