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McWorld gathers steam in East Asia
By Jim Lobe

WASHINGTON - Despite concerns that an economic slowdown and protectionist measures would lead to globalization's end, globalization is far from dead, and in fact, according to a recent report, the world is now more integrated than it's ever been.

Not only this, but developing countries are becoming increasingly globalized. For the first time, Singapore came in second on a list of the world's most globalized nations and East Asia came in just behind Europe and North America as the world's third most integrated region, according to the fourth annual edition of Foreign Policy magazine's "Globalization Index", released here on Tuesday.

For the third year in a row, Ireland was rated as the world's most "globalized" nation, followed by No 3 Switzerland and the Netherlands at No 4. But at No 2, Singapore topped the list of developing countries, according to the report, which measures the degree to which 62 countries, representing some 84 percent of the world's population and 96 percent of its gross domestic product (GDP), were integrated into global trade, finance, politics and technology at the beginning of 2003.

Next highest among developing countries were Malaysia, at No 20, followed by Panama (27), Botswana (30), South Korea (32), the Philippines (33), Argentina (34) and Tunisia (35).

As in the previous two years, the survey named Iran as the least globalized country among the 62 surveyed. Bangladesh, China, Venezuela, Indonesia, Egypt and India ranked 56 through 62, respectively.

The report, which is based on data compiled for 2002 - the year for which the latest relevant statistics were available - found that global economic integration actually declined in 2002 in the wake of the world economic slowdown in 2001, which was then worsened by the impact of the September 11, 2001, al-Qaeda terrorist attacks on the United States.

Foreign direct investment (FDI) - the investment of foreign assets into domestic structures, equipment, and organizations - already down some 40 percent in 2001, fell another 21 percent in 2002 to US$651 billion, while global flows of portfolio capital also dropped significantly. Overall, economic integration measures dropped to their lowest levels since 1998, according to the Index, a joint project of Foreign Policy and AT Kearney, one of the world's largest management consulting firms.

But when political, technological and personal contact and communication variables were taken into account, the Index found that overall globalization actually increased in 2002. Among other factors, it tracked strong gains in trans-border telephone use and Internet connectivity, particularly in developing countries - all pointing to the resiliency of trends that promote greater global integration.

"Globalization is not a fad," noted Moises Naim, the editor of Foreign Policy, which is published by the Carnegie Endowment for International Peace. "It won't go away."

As in previous years, the new Index was accompanied by analyses that tested widely held perceptions of the relationship between globalization and various trends.

Two years ago, the Index was compared with other indices on political freedoms, corruption and income inequality and found that more globalized countries tended to enjoy more freedom, less corruption and narrower gaps between rich and poor.

Last year, it found that greater globalization correlates positively with more environmental protection, and that more globalized countries tend to pay more to workers in their manufacturing sectors (see Singapore, Malaysia high on 'globalization' scale, January 9, 2003). Both findings contradicted conventional notions that globalization begets a "race to the bottom".

Rankings on the Index are determined by the combined score of a dozen weighted variables covering economic, personal, technological and political categories.

Economic variables include the percentage of trade as a share of the country's GDP, inward and outward FDI and other portfolio investment, and international income payments and receipts as shares of GDP.

Personal variables cover the number of minutes of international phone calls, the number of travelers per capita, and remittances from expatriate workers as a share of GDP, while technological variables include the percentage of the population with Internet access and the number of Internet hosts and secure servers in the country.

Meanwhile, political variables include the country's memberships in international organizations, its participation in multilateral peacekeeping missions and the number of countries where it has embassies located.

As in the previous three surveys, smaller Northern and Western European states outperformed the field, accounting for 12 of the first 20 rankings.

But for the first time, North America as a region outranked Europe, as the United States moved up four spots, from 11 in last year's Index to 7; Canada moved up one, from 7 to 6; and Mexico moved up six places, from 51 to 45.

The greatest declines in the rankings included Sweden (from 3 last year to 11); Morocco (from 29 to 47); South Africa (from 38 to 49); Kenya (from 44 to 54); and Egypt (from 48 to 60). Both China and India, whose combined populations account for more than one-third of the world's total, fell four rankings over the year.

The greatest gains were made by the Philippines (from 54 to 33); Argentina (from 50 to 34); and Peru, Australia and New Zealand, all of which rose eight rankings to 52, 13 and 8, respectively.

Besides Europe and North America, the world's most integrated region was East Asia, led by Singapore and Malaysia, which were followed by Japan (29), South Korea (32), the Philippines (33), Thailand (48) and China (57). Taiwan ranked 36, but its score would have been considerably higher had the political-engagement variables not applied. Taiwan ranked 62 in membership in international organizations, United Nations peacekeeping and treaty ratifications because China, which regards the island as a renegade province, strongly opposes international recognition of Taiwan as an independent nation.

Among the Latin American countries ranked in the Index, Panama (27) took the top spot, followed by Argentina (34), Chile (37), Mexico (45), Colombia (50), Peru (52), Brazil (53) and Venezuela (58). Overall, Latin American countries performed better than in the past largely due, however, to steep currency devaluations during 2002, which in effect shrank their economies' GDP, at least in US dollar terms. Thus, as a share of economic activity, the region's trade and investment flows were magnified.

Only six African countries were rated in the survey. Led by Botswana (30), they included Uganda (38), Senegal (40), Nigeria (42), South Africa (49) and Kenya (54).

As in previous years, the least integrated regions were South Asia and the Middle East-North Africa. While Israel and Tunisia ranked 22 and 35, respectively, all other countries in the two regions, with the exception of Saudi Arabia (41), fell into the bottom 12.

In the latest analysis, researchers tested the relationship of globalization with UN data on life expectancies at birth; women's well-being, including health, literacy, access to education and income; and studies on levels of formal religious participation. It found that people in more globalized countries - whether developed or developing - tend to live longer than those in less globalized countries, and that women tend to be better off in nations that are the most globally integrated.

As for high levels of religious participation, the researchers found that several countries clustered near the bottom of the Index tend to be more devout, but considering the number of major exceptions, including Ireland and the United States, which are both particularly observant, the variable was probably not particularly significant.

(Inter Press Service)
Feb 26, 2004

Mumbai puts anti-globalization stars to the test
(Jan 22, '04)



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