Washingtonpost.

Newsweek Interactive, LLC

Measuring Globalization
Source: Foreign Policy, No. 148 (May - Jun., 2005), pp. 52-60
Published by: Washingtonpost.Newsweek Interactive, LLC
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Measuring
oa/ization
T h e G l ob al T op 2 0 o
T h ecountriesth at
top
th e
ch arts
in
trade, travel ,
tech nol ogy,
and
l inkstoth erest
of
th eworl d
Singap ore
ECONOMIC INT EG RAT ION:
T rade and
foreign
direct investment
T ECHNOLOG ICAL
CONNECT IVIT Y:
Internet
users,
Internet
h osts,
and
secure servers
PERSONAL CONT ACT :
International travel and
tourism,
interna-
tional
tel ep h one traffic,
and remittances
and
p ersonal
transfers
(incl uding
worker
remittances, comp ensation
to
emp l oyees,
and oth er
p erson-to-p erson
and non-
governmental transfers)
POLIT ICAL ENG AG EMENT :
Memb ersh ip
ininternational
organiza-
tions, p ersonnel
and financial contrib u-
tions toU.N.
p eacekeep ing missions,
international treaties
ratified,
and
govern-
mental transfers
z
LLJ
m
z
Q--
L.3
[rY
Q
m
i,
o
52 FOREIG N POLICY
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G LOBALIZAT ION AT WORK
T h e
fifth
annual A. T .
Kearney/FOREIG N
POLICY G l ob al ization
Index
sh ows
th at
gl ob al integration
survived th eturb ul ence
of
th e
Iraq
war,
a
sh arp
economic
downturn,
and th e
fail ureof
tradetal ks. Our
rankingof
p ol itical ,
economic,
p ersonal ,
and
tech nol ogical gl ob al ization
in
62
countriesreveal sth atth eworl d isstil l
comingtogeth er.
Find outwh o's
up ,
wh o's
down,
and h ow
th ey got
th ere.
T
h enoted international economist
Josep h Stigl itz
cal l ed 2 0 0 3 "adisaster
for
gl ob al ization."
Atone
l evel ,
h e
was
righ t.
T h e
Iraq
warand itsafter-
math created
deep
fissuresb etweenth eUnited States
and its
al l ies,
and th e
greatmajority
of countries
wh o
op p osed
th ewar. T h eU.N.
Security Council ,
th e
l ead
b ody
forinternational
p eace
and
security issues,
wasdeal tab l ow
b y
th e
wil l ingness
of th ecoal ition
tol aunch a
mil itary camp aign
with outits
b l essing.
T h ewareven
p romp ted b oycotts
and
muttering
ab out
p ossib l e
trade
emb argoes. During
th e
h eigh t
of
th e
Iraq controversy,
someG ermanrestaurants
p ost-
ed
signsreading, "Sorry,
Coca-Col aisnotavail ab l e
any
moreduetoth ecurrent
p ol itical
situation." T h e
desireto
exp ressp ol itical
differencesatth ecash
reg-
isterwas
recip rocated
inth eUnited States. One2 0 0 3
p ol l
sh owed th at
nearl y
h al f of Americans
p referred
notto
b uy
French
goods.
EvenWh iteHouseCh ief
of Staff Andrew Card was
rep orted
toh avesaid th at
"Virginia
wineisfinewith me."
Economical l y,
th e
year
did not
b egin
much b et-
ter.
Foreign
investmentfl ows
sl owed,
and trade
was
stagnant
forth efirsth al f of th e
year.
Inits
meeting
at
Canctin,
Mexico,
th eWorl d T rade
Orga-
nization
(WT O)
fail ed to
agree
onth ereductionof
p owerful agricul tural
sub sidiesinth eUnited States
and
Europ e.
Wh at
migh t
h aveb eenadramatic
exp ansion
of freetrade
fizzl ed, l eaving
b eh ind no
ob vious
roadmap
for
p rogress.
Inth ereal m of
p ub l ic h eal th ,
th e
SARS ep idemic grounded gl ob al
Cop yrigh t 2 0 0 5,
A.T
Kearney, Inc., and th e
Carnegie
Endow-
ment
for
International Peace. Al l
righ ts
reserved.
A.T .
Kear-
ney
isa
registered
servicemark
of A.T . Kearney,
Inc.
FOREIG N POLICY isa
registered
trademark owned
b y
th e
Carnegie
Endowment
for
International Peace.
travel ersand
exp osed unsettl inggap s
ininterna-
tional h eal th
monitoring.
T ourism toAsia
drop p ed
p recip itousl y
asa
resul t-b y
asmuch as50
p ercent
insomecountries.
Yetth is
year's
editionof th eA.T .
Kearney/
FOREIG N POLICY G l ob al izationIndex sh owsth at
th emul tifaceted forcecal l ed
gl ob al ization
ismade
of sternerstuff.
By
th esecond h al f of
2 0 0 3,
th eties
th atb ind were
connecting
usonce
again.
G l ob al
trade,
wh ich
grew
atl essth an1
p ercent
inth efirst
quarter, jump ed b y
moreth an5
p ercent
inth e
second h al f of th e
year.
G l ob al
devel op ment
aid
imp roved dramatical l y.
T h e
Organisation
forEco-
nomic
Co-op eration
and
Devel op ment
estimated
th atofficial
devel op ment
assistancereach ed a
record $69 b il l ion. T h e
l argest
increasecamefrom
th eUnited
States,
wh ich b oosted
foreign
aid
b y
moreth an2 0
p ercent.
T h eresil ienceof
gl ob al ization
indicatesth atit
isa
p h enomenon
th atruns
deep er
th anth e
p ol iti-
cal crisesof th e
day.
Inanefforttomeasureits
many dimensions,
th eindex l ooksb eh ind th eh ead-
l ines
b y using
several indicators
sp anningtrade,
finance, p ol itical engagement,
informationtech -
nol ogy,
and
p ersonal
contacttodetermineth erank-
ings
of 62 countries. T h ese62 countries
togeth er
accountfor96
p ercent
of th eworl d's
gross
domes-
tic
p roduct(G DP)
and 85
p ercent
of th eworl d's
p op ul ation.
T h eindex measures12
variab l es,
wh ich aredivided intofour"b askets": economic
integration, tech nol ogical connectivity, p ersonal
contact,
and
p ol itical engagement.
T h e
resul tingrankings
offeran
imp ortanth igh -
al titudel ook atwh ich countriesare
gl ob al izing
and
wh ich arenot. But
siftingth rough
th edatath at
comeoutof th eindex al so
yiel ds
some
interesting
storiesb eh ind th eb roadertrends.
MAYIJUNE 2 0 0 5 53
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Measuring
G l ob al ization
T HE WINNERS' CIRCLE
T h el uck of th eIrish
final l y
ran
out,
asl ast
year's
run-
ner-up , Singap ore,
took th e
top sp ot
inth is
year's
ranking, ending
Irel and's
th ree-year
streak. One
key
to
Singap ore's
risewasitsincreased
p ol itical engage-
ment. T h eisl and nationb uil t
b ridges
in2 0 0 3-
increasing
itsfinancial contrib utiontoU.N.
p eace-
keep ing
missions
b y
41
p ercent. (Indeed,
a
Singap orean
general
commanded th e
p eacekeep ing
forceinEast
T imorformuch of
2 0 0 3.) Singap ore
sol idified its
first-p l aceranking
in
foreign
trade
b y signing
ab il at-
eral freetrade
agreement
with th eUnited Statesin
May
2 0 0 3,
th efirstsuch
agreement
th eUnited Statesh ad
signed
with anAsiannation.
Meanwh il e,
Irel and's
strongeconomy sl ump ed,
with G DP
growth sl iding
from arob ust6.9
p ercent
in2 0 0 2 toa
tep id
1.8
p er-
Rankings
nth e
tab l e,
th ecountries
ranking
inth e
top
10
ineach
category
aresh aded
orange,
and th ose
ranking
inth eb ottom 10 aresh aded b l ue.
centin2 0 0 3. T h erewasoth ermovementinth e
top
five.
Finl and
fel l from fifth to10 th
p l ace.
T h eUnited
States
jump ed
from seventh tofourth and b ecameth e
first
l argecountry
tocrack th e
top
five. Nationswith
l argep op ul ations(and l arge
domestic
markets) gen-
eral l y
fareworseinth eindex b ecause
th ey
are
typ ical l y
l ess
dep endent
on
foreign
tradeand investment. T h e
strong
U.S.
sh owing
is
p rimaril y
aresul tof itsremark-
ab l e
tech nol ogical p rowess.
T h e
Sch izop h renic
United States
T h eworl d's
sup erp ower
b ecameab itmore
gl ob al
in
2 0 0 3, cl imb ing
th ree
sp ots
inth eindex.
Buta
quick gl ance
atth eU.S.
rep ort
card reveal s
ah it-or-miss
p erformance.
T h eUnited States
p utup stratosp h eric
numb ersinth e
tech nol ogy
b asket, ranking
firstinth enumb erof Internet
h ostsand th enumb erof secureservers. Butth e
United States
l agged
farb eh ind in
categories
incl udingtrade, foreign
directinvestment
(FDI),
and
treaty
commitments. In
p art,
th eUnited States' l ackl uster
p er-
formanceineconomic areasisdue
toitsvib rantdomestic market.
Because
many
U.S.
p roducers
can
focus
excl usivel y
on
satisfying
U.S.
consumers,
th eUnited States
isal ess
trade-dep endent
nation
th ansmal l
exp orting
countries
such as
Singap ore
and Irel and. In
some
ways,
th eU.S.
economy
isa
worl d untoitsel f. T h eBush
administrationh asoftenacted
simil arl y
al oof in
p ol itical
and
dip l omatic
terms. Considerth e
United States'
skep ticism
of inter-
national
treaty regimes.
In
2 0 0 3,
th eBush administrationcontin-
ued toturn
up
itsnoseata
variety
of international
agreements.
T h eWh iteHouse's
op p osition
toth e
Kyoto
Protocol and th eInter-
national Criminal Courtiswel l known. Butth e
Bush administrationdidn'tevenwantto
sign
on
toth eBasel Conventiononth eControl of
T ransb oundary
Movementsof Hazardous
Wastes. T h eUnited Statesl ooks
susp iciousl y
at
many
of th enew
l egal
and institutional
arrange-
mentsth atare
b inding
th eworl d
togeth er,
at
l easton
p ap er.
Asa
resul t,
th eUnited States
ranks57th of th e62 ranked countries-b el ow
Ch inaand Pakistan-wh enitcomesto
signing
onth edotted l ine.
Internet users
asa
p ercentage
of
U.S.
p op ul ation
59
55
50
44
36
1999 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3
Sources: International T el ecommunication Union; International
Monetary
Fund
54 FOREIG N POLICY
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Dimension Item
Economic Personal Contact
T ech nol ogical
Pol itical
Engagement
Integration Connectivity
2 0 0 5
Pankings
Ch ange
from
2 0 0 4
Economic Personal T ech nol ogical Pol itical T radeFDI T el ep h one T ravel Remittances
and
Personal
T ransfers
Internet
Users
Internet
Hosts
Secure
Servers
International Organizations U.N.
Peacekeep ing
T reaties G overnment T ransfers 2 0 0 4
G I
Rankings
1
Singap ore
1 1 3 11 32 1 1 1 5 47 10 9 11 2 9 3 41 47 2
2 Irel and -1 2 2 13 19 4 2 3 3 6 2 4 18 7 12 11 2 8 2 2 1
3 Switzerl and 0 9 1 7 2 9 18 5 2 4 1 11 14 5 2 9 13 41 10 3
4 United States 3 60 40 1 43 61 42 19 34 58 4 1 1 1 2 8 57 38 7
5 Neth erl ands -1 5 11 8 4 8 4 6 13 45 9 4 13 5 17 6 6 4
6 Canada 0 2 7 8 2 10 2 6 2 3 4 2 2 60 5 11 2 2 2 2 6 2 8 6
7 Denmark 3 2 9 7 5 13 19 38 7 17 17 3 3 8 12 14 2 8 7 10
8 Sweden 3 12 10 9 16 2 1 6 9 6 43 1 10 9 17 12 6 40 11
9 Austria 0 10 5 14 2 14 12 11 2 31 16 15 14 12 2 6 8 9
10 Finl and -5 15 2 0 6 15 33 7 17 12 42 8 2 10 12 7 2 8 13 5
11 New Zeal and -3 36 16 3 2 1 39 2 7 5 2 3 53 7 8 3 2 9 2 3 6 2 0 8
12 United
Kingdom
0 32 12 10 5 45 2 0 10 16 37 12 17 6 5 10 6 18 12
13 Austral ia 0 37 34 4 2 5 55 16 14 30 50 6 5 4 2 9 5 2 8 36 13
14
Norway
3 35 15 12 17 2 9 34 12 2 4 30 2 2 6 12 17 2 0 6 2 4 17
15 Czech
Rep ub l ic
-1 11 4 2 4 35 5 2 4 2 5 1 2 5 2 5 2 2 2 6 17 42 2 8 15 14
16 Croatia 7 7 6 2 8 2 6 12 8 2 0 7 9 31 34 2 5 2 9 49 1 16 2 3
17 Israel 5 19 9 16 46 2 4 14 8 2 7 11 18 16 17 48 15 61 4 2 2
18 France -3 2 4 17 2 1 3 46 10 15 14 39 2 0 19 2 0 2 6 6 9 15
19
Mal aysia
1 4 19 2 7 49 2 2 1 2 7 10 16 2 1 37 35 2 9 43 41 45 2 0
2 0 Sl ovenia -1 17 13 2 0 2 3 11 39 2 2 8 2 3 15 2 5 18 2 9 2 1 6 2 5 19
2 1
G ermany
-3 43 2 9 17 8 30 54 16 2 1 49 14 2 1 16 2 9 2 8 11 18
2 2
Portugal
-6 44 18 2 2 1 34 53 2 3 15 2 2 17 2 3 2 2 5 1 6 5 16
2 3
Hungary
3 6 32 2 6 2 2 6 15 34 9 36 2 8 2 0 2 9 17 35 1 30 2 6
2 4 Panama 3 3 47 34 34 9 3 33 37 40 46 41 2 3 48 56 1 2 6 2 7
2 5 Sl ovakia -4 8 38 30 7 3 37 30 33 2 1 2 6 2 6 34 2 9 4 1 53 2 1
2 6
Sp ain
-2 2 2 2 8 2 3 11 42 11 2 4 18 2 9 2 9 2 4 19 5 2 5 6 14 2 4
2 7
Ital y
-2 47 2 7 2 5 6 50 40 18 2 0 44 2 3 33 2 4 5 18 6 12 2 5
2 8
Jap an
1 62 58 15 18 62 52 40 45 61 13 12 15 2 9 8 6 49 2 9
2 9 G reece -1 55 2 3 32 9 48 58 2 1 11 38 33 2 9 2 7 5 2 4 2 8 3 2 8
30 South Korea 2 38 46 19 45 2 5 47 39 40 2 7 2 13 30 2 9 2 9 41 42 32
31 Pol and 0 33 31 2 9 37 2 7 31 2 8 19 2 8 30 2 7 2 8 17 33 2 8 35 31
32
Ph il ip p ines
1 2 8 14 49 42 16 55 41 51 2 49 48 47 17 51 2 8 41 33
33
Uganda
5 39 2 4 61 14 56 18 62 58 3 61 53 59 48 61 6 2 38
34 Ch il e 3 16 51 31 30 31 9 35 38 52 2 7 32 32 12 47 6 2 9 37
35 Romania 4 2 5 37 36 2 7 2 2 2 6 36 2 9 18 32 42 44 2 9 46 1 31 39
36 T aiwan 0 18 2 5 18 62 13 32 13 31 2 6 19 7 2 1 62 62 62 55 36
37 T unisia -2 2 3 30 47 40 17 2 9 32 2 6 14 43 60 46 2 9 30 2 8 44 35
38 Botswana -8 30 39 51 12 2 0 41 31 2 5 33 51 46 50 48 57 6 1 30
39 Ukraine 4 13 41 45 41 10 2 5 42 32 19 44 43 49 48 37 2 8 2 1 43
40 Morocco 7 2 1 2 2 54 55 32 13 46 42 4 54 52 51 48 38 52 33 47
41
Senegal
-1 40 36 55 2 4 35 44 48 47 12 55 58 56 2 9 2 6 6 17 40
42 Mexico 3 41 44 37 31 41 35 2 9 35 32 34 31 38 5 54 6 60 45
43 SriLanka 8 34 2 6 57 56 2 3 45 49 50 5 58 54 48 58 58 41 46 51
44
Nigeria
-2 2 0 52 60 33 15 30 59 59 34 60 61 60 17 36 6 62 42
45 SaudiArab ia -4 45 2 1 46 57 2 8 62 2 6 2 8 8 45 47 45 48 45 52 54 41
46 T h ail and 2 14 50 40 58 7 43 54 43 35 36 44 40 17 44 57 48 48
47 Argentina -13 58 56 33 2 0 53 49 47 44 55 35 2 8 37 17 16 6 39 34
48 South Africa 1 48 55 38 2 8 44 50 43 39 54 40 35 31 17 32 6 2 7 49
49 Kenya 5 52 42 58 38 43 56 61 55 13 57 50 57 48 2 7 2 8 32 54
50 Pakistan -4 53 33 59 52 54 36 53 62 7 59 55 55 48 31 52 19 46
51 Col omb ia -1 42 43 44 51 52 2 2 38 53 15 50 39 42 48 48 41 34 50
52 Russia -8 46 53 42 36 40 46 51 41 48 39 38 43 17 19 41 37 44
53 Peru -1 54 49 41 39 57 2 8 37 49 41 37 40 41 2 9 52 6 59 52
54 Ch ina 3 2 6 57 50 54 36 19 56 54 46 47 51 58 2 9 34 52 58 57
55 Venezuel a 3 31 59 43 50 51 17 45 52 59 48 45 39 2 9 50 41 56 58
56 T urkey -1 49 54 39 47 38 57 44 36 56 41 36 36 2 9 41 41 43 55
57 Brazil -4 57 61 35 44 60 33 52 56 57 38 30 33 2 9 40 2 8 57 53
58 Bangl adesh -2 61 35 62 53 58 61 60 60 10 62 62 62 58 39 41 50 56
59 Egyp t 1 56 45 52 59 49 60 50 46 2 0 52 59 52 2 9
55
57 2 3 60
60 Indonesia -1 50 60 53 48 37 59 57 57 51 53 49 54 17 60 41 51 59
61 India 0 59 48 56 60 59 51 58 61 2 4 56 56 53 58 59 52 52 61
62 Iran 0 51 62 48 61 47 48 55 48 62 42 57 61 58 53 57 61 62
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Measuring
G l ob al ization
- msaFal eh n
Russia's
gl ob al ization
scoretumb l ed
eigh tp l aces
inth is
year's
index. T h eRussian
economy
h as
b ecome
dep endent
onoil and
gasinvestments,
and th e
country'sp artial
transformationintoa
"p etrostate"
meansth atits
economy
is
b ecoming
vul nerab l etoth evicissitudesof th osemarkets.
By
some
accounts,
th e
energy
sector'scontrib ution
toindustrial
outp ut
isab out2 5
p ercent
of G DP and
50
p ercent
of th e
country'sexp ortearnings.
T h e
Kreml in's
l egal
assaul tonoil
giant
Yukosand th e
b l oody
terroristattacks
b y
Ch ech enforcesh ave
deterred
many foreign
investors.
Corrup tion
and
inefficiency
areal so
sap p ing
Russianeconomic
strength . By
some
estimates,
th eb l ack marketwas
b etween2 0 and 40
p ercent
of th eRussian
economy.
Privatizationand
deregul ation, meanwh il e,
h ave
stal l ed. Russiastil l h asnotmadeth ereformsnec-
essary
to
join
th e
WT O,
and tradeasash areof Rus-
sia'sG DP fel l
sh arp l y
b etween1999 and 2 0 0 3.
By
contrast, Ukraine,
wh ich isal so
angl ing
for
wT o
memb ersh ip ,
saw tradeasash areof itsG DP
increase
b y
12
p ercentduring
th esame
p eriod.
An Invitation
to T error?
A weak connection
b etween
gl ob al ization
and terrorism
s
op eningyour
I
country
toth eforces
of
gl ob al ization
aninvita-
tiontoterror?
Many anal ysts
h aveth eorized th atth emore
gl ob al
a
country is,
th emore
suscep tib l e
itistoter-
roristattacks. Countrieswith
rel ativel y op en
p h ysical
b ordersand cl osecontactwith th eoutside
worl d
may
al l ow terroriststoenterand movearound
easil y.
Frustrated ab outth e
unequal
distrib utionof
gl ob al ization's
b enefitsorth e
p erceived corrup tion
of
traditional
val ues,
terroristoutfits
may actual l y
want
tomakean
examp l e
of th ese
op en
societiesand sin-
gl e
th em outforattack. And th emore
tech nol ogical l y
op en
a
country,
th eeasieritisforterroriststocoor-
dinateand executeth eir
p l ans
with out
b eing
noticed.
Noone
forgets
th atth e
Sep temb er
11
h ijackers
rel ied
on
e-mail ,
cel l
p h ones,
and wiretransfersinth e
month s
l eadingup
toth eirattacks.
It'san
interesting
th eory,
b utitdoesn't
ch eck out. We
comp ared
th e
U.S. State
Dep artment's
Patterns
of G l ob al T errorism 2 0 0 3 with th e
index and found l ittl ecorrel ationb etweena
country's
l evel of
gl ob al integration
and th enum-
b erof
significant
international terroristattacksonits
soil . In
general , integrated
countrieswerenotmorevul -
nerab l etoterrorism th ancountrieswith fewerl inksto
th eworl d. In
fact, gl ob al ized
countries
may
b emore
cap ab l e
of
comb ating
terrorism
b y joining
international
networks.
India,
for
examp l e,
is
taking
th at
p ath .
A fre-
quenttarget
of mil itant
group sop erating
in
Jammu
and
Kash mir,
New Del h i decided to
ratify
th eInter-
national Conventionforth e
Sup p ression
of th eFinanc-
ing
of T errorism in2 0 0 3. It'sasmart
move,
as
drying
up
th esourcesof terrorist
financing
isoneof
gl ob al -
ization'sb esttool sfor
keep ing
terroristsat
b ay.
56 FOREIG N POLICY
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Distance
Learning
A l ink b etween
p ub l ic
education
sp ending
and
gl ob al ization
Is more
worl dl y
more
I wise?
Ap p arentl y,
th e
answeris
yes.
We
comp ared
th e
G l ob al izationIndex toWorl d Bank data
on
p ub l ic
education
sp ending
and found a
p ositiverel ation, esp ecial l y
in
devel op ing
countries.
Sh ifting
toa
gl ob al ized economy
meansth atanedu-
cated
p op ul ation
isnot
just
desirab l eb utessential . As
arecentb ank
rep ortstates,
"T h e
emergence
of th e
gl ob al knowl edgeeconomy
h as
p ut
a
p remium
on
l earningth rough out
th eworl d." Of
course,
more
resourcesal onedonot
eguarantee
amoreeducated
p op ul ation. Iran,
th el east
gl ob al -
ized
country
inth e
index,
devotesa
greaterp ercentage
of its
sp ending
toeduca-
tionth an
Irel and,
th e
second-ranking country.
But
th ereisno
question
th at
assigning
moreresources to
education
general l y
creates
p ossib il ities
formore
sch ool s,
more
teach ers,
and
h igh erwages
foredu-
cators. With outth is
investment,
th ereis
virtual l y
no
way
fora
country
tomovetoth eh ead of th ecl ass.
T h e Ch inese
Engine
In
2 0 0 3,
wh enoth ernational economies
b egan
to
sp utter,
Ch ina
kep taccel erating;
itsG DP
grew
at
a
scorch ing
9.1
p ercent.
Noone
questions
th atth e
Ch inese
economy
isnow oneof th e
engines
of
gl ob al
economic
growth .
T h e
country'snearl y
insatiab l edemand forraw material sh as
strength -
ened tradel inkswith
neigh b ors
and
commodity
p roducers
around th eworl d. Wh enCh ina
announced itsintentionto
imp ort
arecord vol ume
of
soyb eans,
for
examp l e, p ricesjump ed
asmuch
as2 8
p ercent
in
p l aces
asdistantascentral Il l inois.
Ch ina'ssh areof worl d
exp orts,
at1.9
p ercent
in
1990 ,
reach ed 6
p ercent
in
2 0 0 3,
th efirstful l
year
th atCh inawasth e
l argestexp ort
marketfor
b oth South Koreaand T aiwan. G l ob al ization
ap p ears
toh aveb road
p ub l ic sup p ort
inCh ina. A
2 0 0 3 research
study b y
th ePew Centerforth e
Ch ina's economic
growth
(annual p ercentage growth
rateof G DP) 9.1
7.1
8.0
2 0 0 1 2 0 0 2 2 0 0 3
Source: Worl d Bank
Peop l e
& th ePressfound th at90
p ercent
of
p eo-
p l esurveyed
inCh inafel tth at
growing
tradeand
b usinesstieswere
"very good"
or"somewh at
good"
forth e
country. (By contrast, onl y
78
p er-
centof Americansfel tth esame
way.)
ButCh ina's
emergence
asaneconomic
p owerh ouse
h asnot
transl ated intoa
h igh
scoreinth eindex.
Many
of
th eindicatorsinth eindex aremeasured ona
p er
cap ita
b asis. With itsmassive
p op ul ation,
Ch ina
h as
struggl ed
to
imp rove
its
p l ace
inth e
ranking.
MAY
JUNE 2 0 0 5 57
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Measuring
G l ob al ization
]
T h e EU Effect
T h e
l argestEurop ean
economies
may
stil l b e
sl uggish ,
b utth e
Europ ean
Union
(EU)-or
more
accuratel y,
th e
p rosp ect
of
memb ersh ip
in
it-h asa
p owerful
economic
imp act
onth e
region.
Investors
keep
acl ose
eye
onwh ich
Central and Eastern
Europ ean
countries
may
join
th e
p ol itical
and economic cl ub . Countries
p rep aring
foraccessionin2 0 0 4-such asth e
Czech
Rep ub l ic, Hungary,
and Pol and-saw a
waveof
p rivatization
and
merger
deal sin2 0 0 2 .
In
2 0 0 3,
th ewaveof investmentmoved onto
l ower-costcountriesth at
may
b eincl uded inth e
next
memb ersh ip round, incl udingCroatia,
Romania,
and Ukraine. Al l th reecountries
cl imb ed inth e
index, l argel y
duetoincreased
l evel sof investment. Croatia
jump ed
seven
CanadaPl ugsIn
T h eterm
"outsourcing" conjuresup images
of cal l centersin
Bangal ore, Hyderab ad,
and
New Del h i. ButasIndiah asb ecometh e
b ack officetoth eworl d
(and
afocusof th e
deb ateab out
gl ob al ization's
costsand b en-
efits),
Canadah as
quietl y
takena
b igp iece
of th eaction. Inrecent
years,
a
growingseg-
mentof th e
outsourcingindustry
h asfound
ah omein
Canada,
wh ich
op ened
56 new cal l
centersin2 0 0 2 and 2 0 0 3. Canadah asb een
ab l etouseitssomewh atl owerl ab or
costs,
Engl ish -l anguageskil l s,
and cul tural l inksto
attractcal l centersfrom th eUnited States.
Being
just
acrossth eb orderh as
h el p ed
aswel l : U.S.
comp anies
th atb al k atth e
disrup tion
associated
with
settingup sh op
inIndiah aveb eenmore
wil l ing
torel ocatenextdoor. T h eriseinCana-
diancal l centersrefl ectsth e
country'sgrowing
tech nol ogical sop h istication,
wh ich
h el p ed
it
retainits
strongsixth -p l aceranking. Canada,
wh ich ish ometoResearch in
Motion,
th ecom-
p any
th atinvented th e
Bl ackBerry,
ranked sixth
in
tech nol ogical connectivity
in1999 and now
rankssecond. Canadaal so
l ags
b eh ind
onl y
th eUnited Statesinth enumb erof secureservers
p ercap ita.
Internetusersh ave
grown
from one
Foreign
direct investment
8,483
(inmil l ions of U.S. dol l ars)
6,310
Czech
5,639
Rep ub l ic
4,984
2 ,583
Ukraine
496 595
792 693
1,42 4
1999 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3
Source: United Nations Conference onT rade and
Devel op ment. Incl udes infl ows
onl y.
sp ots,
wh il eRomaniaand Ukrainemoved
up
fournotch es
ap iece.
T radefl owsforeach of
th esecountrieswere
up
b etween2 6
p ercent
and 36
p ercent,
and FDI infl owsincreased
b y
moreth an50
p ercent
forCroatiaand b et-
terth andoub l ed forUkraine. But
th ey may
b einfora
dip
soon: New EU memb erssuch
asth eCzech
Rep ub l ic, Sl ovakia,
and Sl ove-
niaal l
sl ip p ed
in
th is
year'sindex,
with
FDI
infl ows
fal l ingb y
moreth antwoth irdsfor
each of th eth reecountriesas
th ey
l ostth eir
cost
comp etitivenessfol l owing
EU
integra-
tion. It's
good
tob ea
memb er,
b ut
you
h ave
to
p ay your
dues.
quarter
tooneh al f of th e
p op ul ation
b etween
1998 and
2 0 0 3,
and th erearenow ab out50 0
p ersonal comp uters
for
every 1,0 0 0
Canadi-
ans, up
from 376 in1999.
Secure servers
inCanada
13,3461
8,497
6,674
4,869
2 ,2 2 3
1999 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3
Source: Netcraft Secure Server
Survey,
Decemb er 2 0 0 4
58 FOREIG N POLICY
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Wil l G l ob al izationSet You Free?
W
'ith
al l th erecenttal k ab out
sp reading
democracy,
werevisited th e
question
of
h ow freedom and
gl ob al ization
fit
togeth er. Comp aring
th eindex with Freedom
House'sannual
rankings
of
p ol itical righ ts
and
civil l ib ertiesincountries
worl dwide,
wefound
th at
th ey
work
togeth erquitenicel y:
T h ereisa
strongp ositiverel ationsh ip
b etween
gl ob al ization
and
p ol itical
freedom. G l ob al ization
may
al sob e
oneof th eb est
ways
of
keep ingp ol iticiansh onest,
asmore
gl ob al ized
countriesh avefarl owerl evel s
of
p erceived corrup tion,
asmeasured
b y
T rans-
p arency
International .
Engaging
countriesatth eb ottom of th e
gl ob al -
izationindex such asIranand
Egyp tmay h el p
foster
increased
p ol itical righ ts
and civil l ib ertiesforth eir
citizens.
Furth ermore,
increased
integrationmay
l ead toth e
adop tion
of
h igh er
international standards
for
transp arency,
wh ich inturnwoul d
discourage
corrup tion
and increase
governmentefficiency.
Of
course,
th ereare
al waysexcep tions
toth erul e.
Singap ore,
th eworl d'smost
gl ob al ized country,
is
h ometoa
modern, op eneconomy
th atexists
al ong-
side
tigh tgovernment
control overth emediaand
l imited individual l ib erties. Onth eoth erend of th e
sp ectrum,
South Africah asa
rel ativel y h igh
l evel of
p ol itical
freedom b utamediocre
gl ob al ization
rank-
ing. G oinggl ob al
doesnotoffer
any guarantees,
b utit
cl earl y
can
give
countriesa
l egup .
High l y gl ob al ized
countries areoften
l ess
corrup t
and
more free
MAY
JUNE
2 0 0 5 59
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Measuring
G l ob al ization
Iran,
th eBottom Dwel l er
T oday,
few countriesstraddl emore
p ol itical
faul t
l inesth anIran. T h e
ongoing
efforts
b y
several
Europ ean
statesto
negotiate
anend toth ecoun-
try's
uranium-enrich ment
p rogram
are
dominating
h eadl ines. Butsh uttl e
dip l omacy b y foreigndip l o-
matsdoesn't
real l y qual ify
as
op eningup
toth e
worl d-and ith asn't
h el p ed
Iranattract
foreign
investors. Iran
again
took l ast
p l ace
inth is
year'sindex,
a
sp ot
it
h asnow
occup ied
five
years
in
a
row. T h e
country'seconomy
is
stil l h ob b l ed
b y
U.S. sanctions
and l ow investorconfidence.
Meanwh il e,
th e
regime'sfrequent
crackdownsonth eInterneth ave
kep t
th e
country's
scoresfortech -
nol ogical
tiestoth eoutsideworl d
nearrock b ottom. Iranh asfewer
secureservers
p ercap ita
th an
any
country
inth eindex oth erth an
Bangl adesh .
And it'snot
just
onl ineth atth eIranian
regimekeep s
itsciti-
zensinch eck. Iranisdead l astintermsof th e
p ersonal
contactitscitizensh avewith th erestof
th eworl d. T otal tourism arrival sand
dep artures
asa
p ercentage
of th e
p op ul ation
were
onl y
7
p ercent-even
l essth an
Senegal 's
10 .5
p ercent. By
comp arison,
Saudi Arab ia'stourism arrival sand
dep artures equal ed
47.2
p ercent
of th e
p op ul ation.
Cl earl y,
Iranis
going
nowh erefast. [H
Foreign
direct
2 .53
investment inIran
(asa
p ercentage
of G DP)
1.34
1.16
0 .74
0 .40
1999 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3
Source: United Nations Conference onT rade and
Devel op ment.
Incl udes infl ows and outfl ows.
WanttoKnow More?
]
T h edatasourcesand
meth odol ogy
used toconstructth efifth annual
A.T .
Kearney/FOREIG N
POLICY
G l ob al izationIndex areavail ab l eat
www.foreignp ol icy.com
and onth eWeb siteof A.T .
Kearney's
G l ob al Business
Pol icy
Council at
www.atkearney.com.
T h eInternational
Monetary
Fund
(IMF)
warnsth atU.S. tradeimb al ancesand
b al l ooning
fiscal
deficits
migh t
undermineth e
gl ob al economy
inU.S. Fiscal Pol iciesand
PrioritiesforLong-Run
Sustainab il ity (Wash ington: IMF, 2 0 0 4).
A.T .
Kearney's
Paul A. Laudicinaadvisesb usinessesonh ow
to
cop e
with th eturb ul enceof
gl ob al ization
inWorl d Out
of
Bal ance:
Navigating
G l ob al Risks
toSeize
Comp etitiveAdvantage(New
York:
McG raw-Hil l , 2 0 0 5).
Neil Smith
critiques
th eBush
administration's
attemp t
to
sp read
neol ib eral ism around th eworl d inT h e
Endgameof
G l ob al ization
(New
York:
Routl edge, 2 0 0 5).
Overth el astseveral
years,
FOREIG N POLICY h as
p rovided
extensive
coverage
of trendsineco-
nomic, p ol itical ,
and cul tural
gl ob al ization.
HistorianNial l
Ferguson
worriesth at
gl ob al izationmay
unravel with outa
sup erp ower
in"A Worl d With outPower"
(Jul y/August2 0 0 4).
In"FiveWarsof
G l ob al ization"
(January/Feb ruary 2 0 0 3),
MoisesNaim warnsth at
governments
wil l continuetol ose
th e
struggl eagainst
th e
il l egal
tradein
drugs, arms,
intel l ectual
p rop erty, p eop l e,
and
money
unl ess
th ey adop t
new
strategies.
Andrew V.
Pap ach ristos
describ esh ow th eUnited
States,
th e
Internet,
and
gl ob al ization
are
b ringinggang
viol encetoatownnear
you
in
"G ang
Worl d"
(March /Ap ril 2 0 0 5).
Forl inkstorel evantWeb
sites,
accesstoth eFP
Arch ive,
and a
comp reh ensive
index of rel ated
FOREIG N POLICY
articl es, go
to
www.foreignp ol icy.com.
60 FOREIG N POLICY
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