Development & Aid, Global, Global Geopolitics, Global Governance, Globalisation, Headlines

POLITICS: Southeast Asia Most Globalised Developing Region

Jim Lobe

WASHINGTON, Feb 24 2004 (IPS) - For the third year in a row, Ireland rates as the world most ”globalised” nation, followed by Singapore, Switzerland and the Netherlands, according to the fourth annual edition of ‘Foreign Policy’ magazine’s ‘Globalisation Index’, released here Tuesday.

At number two, 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 number 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 globalised country among the 62 surveyed. Bangladesh, China, Venezuela, Indonesia, Egypt and India ranked 56 through 62, respectively.

The report, which is based on data complied 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 Sep. 11, 2001 al-Qaeda terrorist attacks on the United States.

Foreign direct investment, already down some 40 percent in 2001, fell another 21 percent in 2002 to 651 billion dollars, 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 A.T. 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 globalisation 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.

”Globalisation 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”.

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 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 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.

It ranked 62 in membership in international organisations, 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 effectively shrank their economies’ GDP, at least in 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.

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

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

Last year, it found that greater globalisation correlates positively with more environmental protection, and that more globalised countries tend to pay more to workers in their manufacturing sectors. Both findings contradicted conventional notions that globalisation begets a ”race to the bottom”.

In the latest analysis, researchers tested the relationship of globalisation with U.N. 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 globalised countries – whether developed or developing – tend to live longer than those in less globalised countries – and that women tend to be better off in more 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 that the number of major exceptions, including Ireland and the United States, which are both particularly observant, indicated the variable was not particularly significant.