I think the intention is to deliniate between 'western' and 'eastern' standards of living - in that context, Japan, South Korea and to an extent China are quite 'western'. This is as opposed to the Nepalese, who as the article says live on an annual income of ~USD$600.
This opens up another can of worms in implying that 'eastern' civilisations are poorer than western ones. I agree it is not a good use of the term but it's arguably better than 'first world' and 'third world' and I cannot think of a better equivalent.
This is exactly right. "Westerners" has less to do with the exact geography and more with economic indicators including standards living/income. I was traveling with Singaporeans who kept being referred to as "westerners"; it was odd initially, but to the locals it was about the group's purchasing power, expectations of luxury/comfort, and nothing else. It was their way of identifying big spenders from the rest.
This opens up another can of worms in implying that 'eastern' civilisations are poorer than western ones. I agree it is not a good use of the term but it's arguably better than 'first world' and 'third world' and I cannot think of a better equivalent.