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For insight into the historic changes taking place in Asia, read and compare the Asian Development Bank’s recent ground-breaking report (Asia 2050: Realising the Asian Century) tracking Asia’s seemingly unstoppable rise with the World Bank’s seminal study on The East Asian Miracle published in 1993.

East Asia’s eight turbo-charged power houses described by the World Bank two decades ago have now been joined by China – the biggest development story in the world today and the region’s dominant economy. India, while not an East Asian state, is part of the region’s growth trajectory as are Australia and New Zealand.

The East Asian Miracle pointed to strong fundamentals, international integration, and good government as the key factors of success in East Asia. But it all came crashing down a few years later as the region was brought to its knees by the 1997-1998 financial crises. Complaints about corruption, nepotism, poor financial regulation and more dominated the headlines. The region was expected to lose years of growth. Asia faltered but it did not fail.

The recovery has been difficult but relatively rapid as governments got serious about putting their houses in order. Today Asia is doing better than anticipated and the region has – so far – managed to escape relatively unscathed from the slowdown affecting Europe and the US.

As the ADB underlines, if Asia’s march to prosperity, being led by seven economies with more than 3 billion people between them – China, India, Indonesia, Japan, South Korea, Thailand and Malaysia – continues apace, there will be some 3 billion additional affluent Asians by 2050. Asia’s combined GDP – also including poor nations such as Laos and Pakistan – will rise from 17 trillion dollars last year to 174 trillion dollars in 2050. In short, Asia will retain the dominant economic position it held 300 years ago.

But Asia’s ascendance is not set in stone. Countries could slip and stumble into a middle income trap of stagnation and slow growth. And even as we celebrate rising Asia, it cannot be forgotten that the region is still home to almost half the world’s absolute poor, who earn less than 1.25 dollars a day.

Emerging economies face the risk of being stuck in the “middle-income trap” as bursts of rapid growth, driven by export-based manufacturing, are followed by periods of stagnation or decline.

There are other key challenges — rising inequality within and between countries, poor governance and corruption in many of them, and intensifying regional competition for finite natural resources.

In the worst case, according to the ADB, Asia could face “a perfect storm” of bad macro-economic policies, unchecked financial sector exuberance, conflict, climate change, natural disasters, changing demography and weak governance.

To make Asian growth sustainable, the study says, countries must address poverty, equality of access and opportunity, and focus on education, entrepreneurship, innovation and technological development. Massive urbanization will need to be tackled.

Climate change is “a wild card for Asian development”, warns the study, which stresses that Asia is already hit by more storms, floods and other natural disasters than any other region.

Asia must retool its institutions to ensure transparency, accountability and predictability in order to respond to demands for greater voice and participation in government being made by an expanding middle class.

Significantly, regional cooperation and integration are seen as vital for Asia’s continuing rise. The ADB also correctly insists that Asia will need to take greater ownership of the “global commons” and transform itself from a passive onlooker in the debate on global rule maker to an active debater and constructive rule maker.

Changes in Asia are impacting not only on the region itself but across the world. The United States is stepping up its engagement with all major Asian actors. In fact, if any thing China’s economic rise has increased other Asian countries search for closer military and security links with the US.

Is there a role for Europe in the Asian Century? Certainly, Europe has strong historical, cultural and economic ties with Asian countries. However, as pointed out in a Friends of Europe policy briefing and conference held in June 2011, enhanced Europe-Asia cooperation in the political and security spheres, requires stronger mutual understanding and a deeper knowledge of each other.

Key findings of the ADB report and Europe’s potential as a partner to help Asia maintain its growth trajectory were the subject of our breakfast debate entitled “Asia 2050: Challenges ahead” on 6 October 2011.