ECONOMY: Singapore, Malaysia Most 'Globalised' Developing Nations

Jim Lobe

WASHINGTON, Jan 7 (IPS) - Led by Ireland, Switzerland, and Sweden, the countries of northern and western Europe are once again the world's most ''globalised'' nations, according to the third annual edition of Foreign Policy magazine's 'Globalisation Index', released Tuesday.

Singapore (4) and Malaysia (18) topped the list of developing countries, says the report, which measures the degree to which 62 countries representing some 85 percent of the world's population and more than 95 percent of its economic output, were integrated into global trade, finance, politics, and technology at the beginning of 2002.

The survey named Iran as the least globalised country of the 62 nations surveyed for the second year in a row. Saudi Arabia, Venezuela, Peru, Indonesia, Brazil, and India followed close behind to fill out the bottom seven positions.

The survey found the greatest changes during 2001 in: Morocco, which advanced from 46 in 2000 to 29 in 2001, largely due to a sharp increase in foreign direct investment (FDI) and worker remittances; South Africa, which jumped from 54 to 38, also due to increased FDI; and Russia, which fell from 39 to 45.

The report, which is based on data compiled for 2001 - the year for which the latest relevant statistics were available - found that global economic integration actually declined during the year due to the sharp slowdown in the world economy, which was worsened by the impact of the Sep. 11, 2001 terrorist attacks on the United States.

Trade levels declined by 1.5 percent during the year, while global FDI dropped by more than 50 percent, from 1.5 trillion dollars in 2000 to 735 billion dollars in 2001.

But political, social and technological connections among nations continued to grow at a rate that offset the fall in economic integration. Indicators of personal connections across borders, such as international telephone traffic, saw steady growth during the year, while political engagement deepened as a result of factors like the ''war on terrorism'' and China's membership in the World Trade Organisation (WTO), according to the Index.

''Globalisation is not only dependent on the ebbs and flows of business cycles,'' said Moises Naim, Foreign Policy's chief editor. ''Economics integration lagged, but political and technological integration increased.''

Rankings on the Index, which is a joint project of Foreign Policy, a publication of the Carnegie Endowment for International Peace here, and A. T. Kearney, an international business consulting firm, consists of 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 gross domestic product (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 travellers 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.

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

As in the previous two surveys, smaller northern and western European states outperformed the field, accounting for 11 of the first 15 rankings. Aside from Singapore, Canada (7), the United States (11), and the Czech Republic (15) were the three exceptions.

The Czech Republic was rated ninth in the combined economic variables, the first time a country from Central Europe had broken into the top 10 most globally integrated economies, ahead of Britain, France, and Germany, among other western European economies. The United States, by contrast, ranked 50 in overall economic integration, underlining its relative economic independence from the global system.

Besides Europe and North America, the most integrated region was East Asia, led by Singapore and Malaysia, followed by South Korea (28), Taiwan (34), Japan (35), Thailand (47) China (51), the Philippines (52), and Indonesia (58).

Among the six Latin American countries covered in the survey, Panama, like Singapore a small centre for international trade and finance, ranked 30, followed by Chile (31), Argentina (48), Mexico (49), Colombia (55), Brazil (57), Peru (59), and Venezuela (60).

''Latin America is more integrated into the rest of the world than it was 10 years ago,'' Naim said. ''But it hasn't integrated fast enough to catch up with others, particularly in Southeast Asia.''

Only six African countries were covered in the survey, primarily due to the lack of statistics. Of those, Botswana ranked 33, followed by Uganda (36), Nigeria (37) South Africa (38), Senegal (41), and Kenya (43). Most scored highest on one or more political variables.

The least integrated regions featured in the survey were South Asia and the Middle East and North Africa. While Israel ranked 19 and Morocco 29, the next rankings were Tunisia (39) Sri Lanka (44), Egypt (46), Pakistan (50), Turkey (53), Bangladesh (54), India (56), Saudi Arabia (60) and Iran (61).

The Middle East, according to Paul Laudicina, vice president of A.T. Kearney, ''is moving in the opposite direction from the rest of the world''.

As in previous years, the new index was accompanied by a report that debunked common perceptions about the negative impacts of globalisation on economies.

Last year, the globalisation index was compared with other indices on political freedoms, corruption, and income inequality. Researchers found that the more globalised countries tended to enjoy more freedom, less corruption and greater income equality.

In the latest survey they compared their globalisation rankings with a recent index of 23 countries compiled by the Yale Center for Environmental Law and Policy and found that greater globalisation correlates positively with more environmental protection.

In yet another survey using World Bank data, researchers found that more globalised countries tend to pay more to workers in their manufacturing sector.

''The data simply does not support the notion that globalisation begets a 'race to the bottom','' said Laudicina. (END/2003)