and, it is no exaggeration to say, underpinned the remarkable speed with which emerging economies like China are catching up to the advanced industrial powers and enhanced the prospects of others, in Africa (where the development of mobile banking in the financial sector is a new phenomenon) and in India (where the delivery of public services on a scale and with a reach previously undreamed of is a work in progress). The information and communications technology (ICT) sector continues to lift productivity and transform society in ways that are a premise of modern living.

Telecommunications facilitate communication and the dissemination of information and knowledge and are vital to the efficient operation of every sector of the economy. It is also a major economic sector in its own right. The mobile phone boom worldwide has created jobs and generated income for the government, operators, manufacturers, service providers, and application and content developers. In developing countries, mobile phones serve as the universal access tool, especially for low-income populations.

ICT is transforming public service delivery and democratising innovation. The World Bank reports that for every 10 per cent increase in high-speed internet connections, there is a 1.3 per cent increase in economic growth. The impact of ICTs is pervasive and profound, with their creative and cost-efficient use in basic sectors, such as education, health and agriculture.

Having access to the most efficient and competitive telecommunications services and infrastructure is thus a critical element in successful development or remaining at its frontier. There may be debates about which aspects of telecommunications services or infrastructure should be delivered by the state or the market, since some have the dimensions of an important public good, but there would seem to be no argument against being open to the lowest cost and most efficient products and systems from suppliers around the world.

This week’s lead essay from EAF regular Justin Li suggests that a range of forces are conspiring otherwise — that the global telecommunications sector is confronted by a wave of new protectionism, little understood and even less well rationalised.

At the heart of the new protectionism in the telecoms sector is its dual role in economic life and security affairs. Li points out that, as long ago as the 1960s, the telecoms industry in the United States was co-opted into the business of national security: US telecommunications giant RCA International, who built Cuba’s telephone system in 1959, provided the CIA and the National Security Agency (NSA) with the schematics of the Cuban communication system and details about the operating parameters of the equipment which allowed US interception of Cuban telephone signals. Edward Snowden has now revealed, for anyone who hadn’t already guessed, that the NSA ‘continues to rely on the cooperation of American telecommunications and internet companies to engage in systematic espionage against both enemy and ally’.

This history is what makes US concerns about the integrity of Chinese telecommunications technology plausible. Chinese telecoms giants Huawei and ZTE have been barred from the United States ostensibly over worries that the Chinese government would use these companies to do what the US government has done globally with its own telecoms companies as well as those of allied or compliant states. That Huawei is in form a private company is neither here nor there in this conception of security interests.

As Li observes, ‘these restrictions have big implications for international trade and investment. Governments around the world have a tendency to use national security or other public policy excuses such as anti-monopoly law to engage in implicit protectionism’. And it is by no means as obvious as many (especially in the security community) believe that the interests of Cisco in the United States or Alcatel-Lucent in France or ZTE in China are convergent with the national economic or security interests of their respective home country governments, let alone those of compliant and allied countries. Security interests (or perhaps monopoly interests as Li points out in the case of China) are a skirt under which vested protectionist and other political interests find a cosy hiding place.

‘Tribalism’, as Li describes it, inspired by half thought-through notions of national security or national economic strength in the global technology and telecommunications market — where companies are confined to operating within their own national borders but in which national borders are porous to product penetration through cross-national production networks — offers only a third-best future for the telecommunications sector in driving global modernisation and development.

Peter Drysdale is Editor of the East Asia Forum.