Economic Openness: Growth and Recovery in Asia

Abstract

The ADEs' best route for ensuring economic growth and pros-perity is through openness and liberal economic policies. Economic theory and empirical evidence clearly demonstrate that outward-oriented trade policies should be a central part of de¬velopment strategies in poor countries. The financial crisis does not change this; however, it does raise questions about the desirability of completely free capital movement and full capital account convertibility. ADEs should take a proactive rather than a reactive approach to multilateral trade negotiations. To maximize the benefits of economic openness as East and Southeast Asia emerge from the financial crisis, the ADEs should push collectively for a comprehen¬sive round of multilateral trade negotiations and develop a common negotiating strategy to promote Asian interests. Many of the prod¬ucts that the ADEs export still remain subject to high tariffs.