The West is making a grave strategic error by blocking reforms to global economic institutions, Kishore Mahbubani has warned, arguing that clinging to outdated structures while the world's economic balance shifts toward Asia is both "unwise" and against the West's long-term interests.

"The biggest structural change is happening, and this is in some ways the end of a 200-year cycle," said Mahbubani, founding dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore.

"We're seeing the end of the era of Western domination of world history, and simultaneously the return of Asia," he added.

Addressing a side event during the annual Boao Forum for Asia on Wednesday, he cautioned that policymakers must look beyond short-term pressures.

"So if global economic governance wants to adapt, it doesn't have to just adapt to short term pressures. It's got to adapt to long term structural changes."

To illustrate the scale of the shift, Mahbubani pointed to a striking comparison.

"In the year 2000, the combined GNP of the European Union was six times bigger than China's. Today, the European Union and China are the same size. But what's interesting is that even though they are now about the same size, the European Union share of IMF voting is about 26 to 27 percent, and China's share is 6 percent."

He described this as an example of resistance to a new global reality. "This is an example of how the West is resisting the change, resisting adaptation to a new structural order."

Mahbubani's message to Western countries was direct. "The West is being very unwise in not allowing the reform of the current institutions and give greater space to China and other countries in the Global South."

"Frankly, all the major institutions of global governance such as the IMF, the World Bank, the WTO were all created by the West. The conceptual foundations on which they rest are Western," he remarked.

He argued that the Global South's requests for a greater voice in these global economic institutions "are actually doing the West a favor."

History could have taken a much more disruptive path, Mahbubani explained. When new powers rise, the more logical course would be to reject the Western-built institutions and build their own.

But instead, Mahbubani said, it is clear that China and other Global South countries do not want to discard the existing global economic governance system. "They simply want to reform it and adapt it to the new order," he stated.

"So I hope that as a result of our meeting, we can persuade our friends in the West that it is actually in the West's longer term interests to allow greater entry of Global South voices into these institutions," he concluded.