By Peter Jones, Contributor

RAPID AND sustained growth is the key to rising living standards and falling poverty. The official figures show that the infant mortality rate in China fell by around 83 per cent between 1960 and 2002. Thailand, Indonesia and Sri Lanka saw drops of a similar magnitude. Singapore saw a decline of 90 per cent.

Over the same period, life expectancy for Indonesian men rose by 24 years to around 62 years; for women it rose further, by 26 years to 66 years. In Malaysia, life expectancy for men is now close to 70 and for women it is almost 75. Literacy rates have seen similar impressive improvements. And the increase in school enrolments ensures that literacy is on the way to becoming universal. What can Asian economic performance tell us about delivering growth elsewhere in the world? And, indeed, what can the example set by more successful Asian economies teach those economies that experienced less rapid economic expansion?

CRUCIAL

An open trading system is crucial for economic success. It is possible for closed economies to achieve high growth spurts. But no country ­ in Asia or elsewhere ­ has managed rapid growth over a sustained period without opening its economy to the rest of the world.

1) Trade brings competition ­ and this is a powerful force for increased economic efficiency. Protectionists worry about jobs lost to foreign competition. But protection costs jobs. It imposes costs on producers, especially those geared to export production (or who would be without these cost penalties). It raises the cost of protected intermediate products and thus puts producers competing with exporters in other countries at a cost disadvantage.

2) Competition helps increase efficiency and ensures that resources are allocated in the best possible way. It helps eliminate domestic monopolies. And so it drives down prices both for domestic consumers ­ as well as producers in import-consuming industries ­ and in the international marketplace. Prices fall because import-competing industries are no longer protected and because more competition forces monopolists to lower prices.

3) Trade also helps create employment, especially in emerging market countries. Open economies have an outlet for large pools of unskilled labour. Instead of being a drain on resources, unskilled labour becomes an opportunity to benefit from export markets for goods whose production is labour intensive in the early stages of economic growth.

4) In general, the more open an economy is to the outside world, the higher are the growth rates that result. A study by Warcziarg and Welch of 133 countries between 1950 and 1988 showed that countries that liberalised their trade regimes enjoyed annual growth rates of about one half of one percentage point higher after liberalisation. And opening up to international trade seems to have become increasingly important. Removal of trade barriers during the 1990s raised growth rates by an estimated 2.5 percentage points a year.

The rewards of openness are widely spread. Even small economies like Vietnam ­ which had negligible exports in 1980 ­ have seen relatively large increases in their share of global trade as they have opened up.

INFERIOR GROWTH

Countries in other parts of the world, countries that have, for one reason or another, not opened their economies in the way that most Asian countries have, have recorded markedly inferior growth performance.

The impressive performance of many Asian economies owes much to the single-minded drive of governments and policymakers who were willing to persevere with their goals and who refused to be deflected. This single-mindedness is especially important once growth starts to accelerate and the temptation to relax or be distracted by other policy concerns can undermine long-term growth objectives.

Single-minded, yes: blinkered, no. Success has come in Asia in part because of the willingness of policymakers to learn from their mistakes ­ and, perhaps more

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