This week, the International Monetary Fund and the World Bank are holding their Annual Meetings in Tokyo. The mood has already been set by the downgrading of growth forecasts. The IMF's latest "World Economic Outlook" report has revised downwards its forecast for next year's growth from 2per cent to 1.5per cent for advanced economies, and from 6per cent to 5.6per cent for developing economies.
The comes after the Asian Development Bank also revised downwards its 2013 growth forecast for Asia, and the World Trade Organisation cut its forecast of world trade growth.
The deflation in the advanced economies comes from their weak financial systems, overhanging fiscal debt and rising unemployment. Their central banks are trying to push up growth through quantitative easing and low interest rates, which seem to have long-term consequences that are not yet fully understood. What we do know is that long-term savers are paying for the losses from the financial crisis.
The bad news is that the emerging economies, which are supposed to be the new engines of growth, have not decoupled from the advanced economies. China and India are both slowing.
Most national governments are at a loss about how to deal with the deterioration in overall sentiment, which could be self-fulfilling if not corrected. My own assessment is that there are three main forces that still have the power to act, what I call the three C's: corporations, civil society and cities.
On the whole, the global corporate sector has emerged from the recession in pretty good shape, especially the top multinationals with good innovative power and global nimbleness, and a willingness to invest in markets with good growth potential, many of which are in Asia.
Civil society is increasingly emerging as another force, with an increasing number of individuals who are willing to fund, act and work for the public good. The rise of philanthropic foundations, such as the Bill & Melinda Gates Foundation, contributes significantly to innovation and research and development; they provide funding for ideas that may change the world.
But it is the power of cities that remains the bright spot of an otherwise gloomy global economy. As the McKinsey Global Institute's excellent recent report on "Urban world: Cities and the rise of the consuming class" rightly pointed out, cities have been the world's economic dynamos for centuries.
Cities play a crucial role in world economic growth, because they are the hub of economic, cultural and intellectual activity. The success of economies depends on the success of cities and their surrounding regions. Japanese industrial power was founded around the Tokyo-Osaka corridor. Silicon Valley has been the intellectual nursery of technological innovation because of the concentration of top universities between San Francisco and Palo Alto.
At the same time, economies that have not succeeded in the growth league can be seen by the dysfunctional metropolitan sprawls of Cairo and Lagos.
Cities play such an important role because they are at the front line of the clash of rural and urban cultures, technological change, rising aspirations and, more often than not, social frustration from inequities.
The rise in China has been manifested by the rise of Chinese cities. More than half its population now live in urban areas, and that figure will probably reach 70per cent by 2035.
The McKinsey study estimates that by 2025, the top 600 cities of the world could generate US$30trillion in gross domestic product, or nearly two-thirds of global growth. Of this, 440 emerging-market cities will contribute US$23trillion, or just under half of global growth. A lot of this will be in Asian cities.
Managing this dramatic transformation could be a huge opportunity or a nightmare. Travelling through the US, you appreciate what a huge challenge it must be to transform ageing infrastructure in "hollowed out" city centres with sprawling suburbia. And yet, if you see what Mayor Ed Lee is doing to make sure that San Francisco becomes the technology capital of the world, and what a cultural and intellectual renaissance has happened in South Korea from the rejuvenation of Seoul, you believe cities can make a difference.
Getting cities to become smarter and better places to live will require better dialogue and understanding between the city leadership and its citizens. McKinsey identified three key lessons from their research on successful cities in China, India and Latin America - better planning and implementation; capable and accountable governance; and sustainable and responsible fiscal management.
There is one other important element - the relationship between the central government and municipal government, especially regarding the sharing of revenue and expenditure. Because Asian cities will need huge amounts of funding for infrastructure and urban renewal, municipal bond markets will have to be nurtured within Asia to provide that funding. This requires transparent accounting by cities.
In Jakarta, a new governor and deputy governor from outside the city have been elected to transform its urban sprawl into a 21st-century powerhouse.
Cities have become the new arena of global competition for people, ideas and prosperity.
Andrew Sheng is president of the Fung Global Institute