Openness and liberal policies allow countries to move more quickly towards the productivity levels of the advanced countries. Since productivity is the ultimate source of wealth, with this trend comes higher living standards. This approach, with a commitment to upgrade education, explains the bulk of the growth in incomes per head in the East Asian countries over the past generation which, recent problems notwithstanding, remains one of the most remarkable economic transformations in history. There are many challenges that flow from these developments. Not least among these are the requirement for governments to explain to the public the benefits that flow from these changes.
Reforms associated with liberalisation typically imply a difficult transition period.
Yet it takes time for new employment opportunities and more profitable enterprises to become apparent. All too often, the debate is captured by those who lose from the process - and, as with any evolutionary change, there always are losers. Since these tend to be concentrated, vocal and well organised, and the beneficiaries spread across the population, debate can be one-sided. There is a common misconception that the trend towards liberalisation and globalisation means that policy authorities have to abdicate their role completely. To the contrary - they do not abdicate their role, they change the manner in which they perform it.