During the 2000s, a multinational CEO based in Asia told me he had the best job in the world. All he had to do was look at regional GDP and trade growth projections, and he could surmise that his business was destined for another blockbuster year. Nor did he need to worry about political and social risks, unlike his counterparts elsewhere. He assured me that the region’s transformation was unstoppable: Asia was stable and policymakers were enthusiastically pursuing pragmatic free market policies.

Fast forward to 2021. Asia still has high rates of economic growth, but social and political stability is fraying. Rising inequality has left younger Asians feeling that economic opportunity will be narrower compared with the booming generation of their parents.

The COVID-19 pandemic, and its public health and economics effects, has further tested the region. There are winners in China, Korea, Singapore and Vietnam, and countries that have stumbled, including storied democracies like India, Indonesia and the Philippines.

Asia’s emergence from the COVID-19 pandemic is a time for introspection. How much of what we boastfully declared about the region’s prospects is for real? Before the pandemic, an “Asia Shining” narrative dominated discourse as a small group of self-satisfied regional elites declared the 21st Century to be an Asian century, glossing over much of the region’s profound economic, social, and political challenges.

The problems were turbocharged by COVID-19. As the IMF’s Jonathan Ostry noted, Asia saw unprecedented declines in output and diminished job prospects for youth and women—and that “significant scarring” was likely.

Pandemics, like natural disasters and financial crises, leave long-lasting scars. Strong leadership from Asian governments will be critical in tackling fault lines.

Asia also need to pay attention to rising inequality and stalling social mobility, as hundreds of millions struggle to rise to the ranks of the middle class. Current estimates about the size of Asia’s middle class are vastly exaggerated—certainly not near the astonishing 1.75 billion that the World Economic Forum projected a few years ago—as commentators incorrectly use rates of economic growth to estimate the size of the middle class.

Instead, Asia has a vast army of poor and low-to-middle-class toilers who are finding that climbing the economic ladder is not as easy as it was in the past. The spread of higher education across Asia has created a surplus of college graduates with limited job prospects. Protests across Asia, such as those in Thailand, Myanmar and elsewhere—though driven by local political developments—have a common thread in unemployed and underemployed students taking to the streets. The fallout from the COVID-19 pandemic has also exposed the depredations of Asia’s urban poor. They toil in sectors like construction, manufacturing, and domestic labor.

Climate change will only increase pressures on urban Asian communities, as rising temperatures and flooding in South and Southeast Asia are forcing ever higher rates of emigration from rural communities.

India, which stumbled even before the pandemic, needs to transfer incentives away from the billionaire class if it is to return to high growth. Even Vietnam—the current poster child of a growing Asia—cannot hope to progress without a radical restructuring of the economy away from preferred local tycoons and state enterprises.

We cannot continue to gloss over these fault-lines in our rush to declare that an "Asian Century" has arrived.

Vasuki Shastry is an Associate Asia Fellow at Chatham House. A former journalist, he had a long career at the International Monetary Fund, Standard Chartered Bank, and Singapore’s central bank. He is the author of “Has Asia Lost It? Dynamic Past, Turbulent Future”.