database makes possible, as far as we know, the first rigorous analyses of the link between policy and performance over time across a number of Asian countries. At the present stage, however, only the most basic hypotheses about policy can be tested.

The General Agreement on Trade in Services (GATS), which emerged from the Uruguay Round, is the first multilateral effort to harness and further the liberalizing trend in services trade. And the results of the basic telecommunications negotiations were perhaps the most important results of the last round of negotiations that ended two years ago. Another round has just begun. So it seems appropriate to raise a number of key questions. What have we learnt about the interplay between reform at the national level and negotiations at the multilateral level? Do the latter simply harvest the liberalization accomplished unilaterally or can they actually help eliminate barriers? What is the value of multilateral rules and commitments? Do they foster good policy and help improve economic performance? How much advantage can be taken of the current round to encourage desirable policy reform? Is there a need to reform the GATS itself to make it a more effective catalyst for reform of national policies? Again we ask more questions than we can answer. But this paper should be seen more as an attempt to provoke discussion at an important juncture rather than as seeking to provide definitive answers.

We begin in the next section with an overview of recent developments in the telecommunications sector in Asian countries. Section III reflects on these developments in light of the current state of understanding of the implications of different policy choices. Section IV attempts to sharpen this understanding through an econometric analysis of the relationship between policy and performance in Asian countries over the last fifteen years. Section V examines how the pursuit of policies that have been identified as desirable can be encouraged in the new round of multilateral negotiations under the GATS. Section VI concludes.

# **II. OVERVIEW OF BASIC TELECOMMUNICATION SERVICES IN** ASIA

The number of telephone users in Asia is estimated to have tripled between 1990-2000. Despite the financial crises that hit the region in the late 1990s, Asia's share of fixed telephone lines in the world has grown from 23% in 1990 to 33% in 2000. More dramatically, Asia's share of global mobile telephone users has leaped from 13% to 35% over the same time period and is expected to reach 50% by 2010.

The fast-paced evolution of telecommunications technology has arguably been one key driver of services growth throughout the Asian continent. Another has been the general trend towards policy reform to foster network expansion and the introduction of new services. Over the past decade, the vast majority of Asian economies have embarked on a reform path encompassing the privatization of state-owned telecommunications operators, the introduction of competition, the opening of markets to foreign service providers and the establishment of pro-competitive regulations.

> **2** 'rhe information provided in this section relies on ITU (2000) as well as various market reports from Pyramid Research.

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