Developing economies have to balance globalisation’s benefits and costs. Increased competition can lead to better distribution and productivity but benefits are not shared equally because some sectors or regions grow faster than others. In Southeast Asia, rapid economic growth has reduced inequality and poverty, but these trends have now gone into reverse. How can we ensure globalisation does minimal social damage? It is not clear how globalisation affects growth, equity and poverty, but growth affects equity and vice-versa. What is needed to reduce poverty and inequality are sound macroeconomic conditions, good governance, investment in rural areas to narrow the urban-rural growth gap, flexible labour markets, stronger institutions for provision of social services and greater access to education. More democracy will increase pressure for such measures as part of general investment in physical infrastructure, human resources and the environment ...