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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)
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