THE link between globalisation and economic growth has been a subject of intense scrutiny by policy-makers, economists, civil society leaders and the media for quite some time. There are many who argue persuasively (hat integration with the global economy accelerates growth. No less persuasive are the arguments to the contrary. The recent global meltdown has given added ammunition for the critics. The arguments and counterarguments are fairly well-known. Considering the limitations of space those will not be repeated here. However, given the contradictory positions of the proponents and the opponents, it would be fair to suggest that the relationship between globalisation and growth needs to be explored empirically. Accordingly, I have reviewed the growth experiences of 12 Asian Countries covering the period 1980 to 2009. Countries examined are Bangladesh, China, India. Indonesia, Korea, Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Thailand and Vietnam. The statistical findings and the key messages emanat-

ing therefrom are presented below.

Statistical findings:

• All of the above-mentioned countries recorded notable increase in trade as proportion of GDP between 1990-2005.

• During the same period, inflow of private capital as proportion of GDP also increased substantially.

• Remittances increased sharply in all countries except Korea which recorded decline and Singapore for which no data are available. Both of these are high-income countries: their residents have no incentive to look for jobs abroad.

• During 1990-97 period, higher growth rate was observed in all countries compared to 1980-90 period except Korea (7.2 per cent as against 9.5 per cent during 1980-90) and Pakistan whose corresponding growth rates were 6.3 per cent and 4.4 percent. In 2005, Pakistan had the second lowest position in terms of both trade/GDP and private capital/GDP ratios.

• In 1998, all the East/South-East Asian countries suffered major declines in

growth rates compared to the average of 1990-97 period (Indonesia to - 13.2% from + 7.5%, Korea to - 6.7% from + 7.2%; Malaysia to - 7.5% from + 8.7%; the Philippines to -0.5% from + 3.3%, Singapore to + 0.4% from + 8.5%, Thailand to -10.4% from + 7.5%, Vietnam to +4.4% from + 8.6% and China to + 7.8% from + 11.9%.

• In 1998, the South Asian countries fared quite well with growth rates ranging from a minimum of 3.3% in Pakistan to 6.8% in India, (Bangladesh 5.2% and Sri Lanka 4.7%).

• During 2000-07 all the East/South-East countries bounced back with a minimum growth of 4.9% in Korea to a maximum of 10.8% in China, but none reached 1990-97 average except Philippines which averaged 5.8%durng 2000-07 against a low rate of 3.3% during 1990-97 period.

• During 2000-07 period, all the South Asian countries performed better than during 1990-97. The growth rates of these late globalises converged towards those of East/South-East Asian countries.

• Estimates of growth rates for all countries in 2009 are lower relative to 2000-07 period except for Indonesia which had lower than potential growth during 2000-07 period.

Key messages:

• While it should be recognised that there are many determinants of growth, there is no doubt that globalisation accelerates growth as 1990-97 performance of all countries relative to 1980-90 period shows.

• This is reconfirmed by South Asian countries' experiences during 2000-07 relative to 1990-97 period.

• Once a high level of income is reached in consequence of high rates of growth during earlier periods, it becomes difficult to sustain the same growth rates as evidenced by East/South-East countries during 2000-07 period.

• Globalisation does expose countries to vulnerability as evidenced by the experience of East/South-East countries during 1998 and the estimates of growth rates for 2009 for all countries.

• However, continued participation in

the globalisation process enables countries to bounce back fairly quickly, as shown by post-1998 experience of East/South-East Asian countries.

• In conclusion, it can be stated that from the perspective of economic growth participation in the globalisation process should be welcomed and encouraged. However, developing countries such as Bangladesh should also remain alert to the possibility of being at least temporarily victimised by external shocks. To the extent possible, they need to adopt domestic policies to pre-empt or mitigate the negative impact of such shocks. These could include flexible exchange rates, counter-cyclical monetary and fiscal policies, restrictions on the inflows and outflows of short-term capital and targeted programmes to alleviate the distress of those who are hit hardest by the external shocks.

Mirza Azizul Islam, Ph D. Is former Adviser to the caretaker government, minis tries of finance and planning