http://www.foreignpolicy.com/issue_janfeb_2001/gindexpressrelease.html Hey, dismal scientists, what say you on this? Michael Pugliese SINGAPORE TOPS RANKING IN NEW GLOBALIZATION INDEX FROM A.T. KEARNEY AND FOREIGN POLICY MAGAZINE New Research Indicates that World's Most Global Nations Display Greater Income Equality and Less Corruption, but "Globalization Gap" Has Widened WASHINGTON, D.C. (January 8, 2001) - Singapore ranks as the world's most global country, leading a group of nations that have become integrated with their neighbors through cross-border flows of goods and services, capital, people, and communication. These countries display more equitable patterns of income distribution, lower levels of corruption, and higher levels of political freedom compared to countries that are less global. The United States ranks as the world's 12th most global nation. Exclusive Coverage: Watch video from the press event unveiling the Globalization Index www.foreignpolicy.com/issue_janfeb_2001/presscoverage.html#video Links to press coverage of the Globalzation Index throughout the world These are among the findings of a new study released today by A.T. Kearney and FOREIGN POLICY Magazine, providing the first comprehensive annual guide to global integration. The study, titled the "A.T. Kearney/ FOREIGN POLICY Magazine Globalization Index TM" debuts in the January/February 2001 issue of FOREIGN POLICY. The study also found that technological factors have become the driving force of globalization over the past several years. The sharp rise in Internet access among advanced economies more than offset the slow growth in traditional economic measures of integration, such as cross-border trade. On the down side, this situation has produced a growing "globalization gap" between developed and developing nations, as overall levels of integration among emerging markets have barely increased. "The Globalization Index shows that some of the most widely held notions about globalization are misguided," says Paul Laudicina, vice president and managing director of A.T. Kearney's Global Business Policy Council. "We believe that all interests are best served when the debates about globalization and its impact rely less on anecdotal evidence and more empirical facts." Moisés Naím, editor and publisher of FOREIGN POLICY, notes that, "The range of factors that the Globalization Index encompasses is truly unprecedented, making it a powerful tool for understanding the forces shaping today's world. By breaking globalization into its most important component parts, the Globalization Index presents the clearest picture yet of how globalization affects people all over the world." The Globalization Index is based on data collected from 50 developed countries and key emerging markets that represent nearly four fifths of world population and more than 95 percent of world economic output. The index's indicators not only quantify economic integration but also gauge the level of personal contact across national borders and measure the extent to which countries are connected to the World Wide Web. Small countries top "most global" rankings Based on results of the Globalization Index, the most global economies tend to be small nations for which openness allows access to goods, services, and capital not readily available at home. Tiny Singapore ranks as the world's most global nation, with the Netherlands, Sweden, Switzerland, and Finland not far behind. Singapore boasts high levels of trade and heavy capital flows, as well as an annual stream of international travelers nearly three times higher than the country's population. With international telephone traffic that totals 390 minutes per person each year, the country also far outdistances its nearest rivals in cross-border contact between people. By contrast, the United States ranked 12th in the Globalization Index. Despite high levels of integration in various technological measures, the United States posted relatively low scores in measures of economic integration and personal contact with the rest of the world. As a share of economic output (gross domestic product, or GDP), the Netherlands handles five times as much foreign direct investment, while Swedish trade totals three times more than U.S. trade. On a per capita basis, Singapore hosts eight times as many international travelers as the United States. And Swiss citizens, on average, each year spend four times as many minutes making international telephone calls than their American counterparts. Overall, the most global countries with the highest Globalization Index scores were: 1. Singapore 2. Netherlands 3. Sweden 4. Switzerland 5. Finland 6. Ireland 7. Austria 8. United Kingdom 9. Norway 10. Canada 11. Denmark 12. United States 13. Italy 14. Germany 15. Portugal 16. France 17. Hungary 18. Spain 19. Israel 20. Malaysia Less income disparity, more freedom, and less corruption in top global countries Among the Globalization Index's most dramatic findings is that more globalized countries display greater income equality than their less globalized counterparts. Even when developing countries are considered alone, those that are more integrated with their neighbors (such as Hungary, Poland, and the Czech Republic) tend to have more equitable patterns of income distribution than those that are not as well integrated (including Argentina, China, and Russia). The Globalization Index also indicates that the world's most globalized countries tend to enjoy more civil liberties and political rights, as measured annually by Freedom House, an organization that promotes human rights, democracy, free market economics, and the rule of law worldwide. Less globalized countries tend to score poorly in these categories. An important exception is Singapore, with the world's most global economy but a relatively low ranking in Freedom House's categories for civil liberties and political rights. Technology drives globalization, but digital divides deepen Although global trade declined with the financial crises of the late 1990s, information technology has kept the momentum of globalization moving forward. With an online population estimated at more than 250 million worldwide and growing, more people in more distant places have the opportunity for direct communication than ever before. Faster and better information technology also makes it possible for nations to sustain deeper levels of economic integration with one another. Not all nations have benefited equally from the technology-fueled surge in globalization. A closer look at Internet access worldwide shows that the digital divide appears more like a "digital abyss," with an overwhelming majority of Internet use-both for personal and business purposes-concentrated within the industrialized world. Developing nations lag far behind. However, various indicators of Internet use and access indicate that other gaps exist within the global digital divide. Globalization in many euro-zone countries has been weighed down by the slower diffusion of Internet technologies. Thus, a digital divide exists even among advanced countries, with North American and Scandinavian nations far outpacing most Western European economies and Japan. The Globalization Index shows that the world has made tremendous advances in global integration in recent years, but that these gains are not to be taken for granted, Paul Laudicina notes. "As the facts about globalization become clear, the challenge is to find policies that enhance integration and mitigate its problems while allowing its many benefits to keep flowing." The Globalization Index encompasses several key indicators. Globalization in goods and services is measured through the share of international trade in GDP, as well as the convergence of domestic prices and world prices. Financial globalization is measured through income payments and receipts, the inflow and outflow of foreign direct investment, and the inflow and outflow of portfolio capital, all measured as a share of GDP. Cross-border personal contact is measured by the number of international tourists and travelers as a share of population, minutes of incoming and outgoing international telephone calls per capita, and transfer payments and receipts as a share of GDP. Finally, three elements comprise the Internet connectivity indicator-the number of Internet users, the number of hosts, and the number of secure servers, all measured on a per capita basis. Although the Globalization Index provides a comprehensive view, Moisés Naím points out that there is an irony associated with trying to measure globalization on a nation-by-nation basis: "Even the least integrated countries are being drawn together by new forces beyond their control, whether it is global warming, the spread of infectious diseases, or the rise of transnational crime." These and other challenges highlight the need for continuing examination of the forces driving global integration. The full text of the article describing the findings of this year's index can be found at www.foreignpolicy.com.
