Hong Kong, Jordan and Estonia Debut Among the Top 10 in Globalization Study

Photo:Singapore, number one in globalization study 

Hong Kong, Jordan and Estonia debuted among the top 10 most globalized nations in their first year on the Globalization Index, an annual study produced by A.T. Kearney and Foreign Policy which assesses the extent to which nations are becoming more or less globally connected. The index is published in the November/December issue of Foreign Policy.

Singapore ranked first for the third consecutive year. However, Hong Kong debuted very close behind, in second place. The Netherlands rose four places to third, followed by Switzerland and Ireland at fourth and fifth. The United States dropped four spots to seventh overall, despite its continued strength in the index's technology score. Index newcomers Jordan and Estonia ranked ninth and tenth, respectively.

 Rankings

1. Singapore
2. Hong Kong
3. Netherlands
4. Switzerland
5. Ireland
6. Denmakr
7. United States
8. Canada
9. Jordan
10. Estonia

An additional 10 economies were added since last year, for a total of 72. The index accounts for 97 percent of the world's gross domestic product and 88 percent of the world's population.

The index measures 12 variables grouped into four categories: economic integration, personal contact, technological connectivity, and political engagement. This year's index examines data from 2005, the most recent year from which data is available.

Placing second overall, Hong Kong ranked first in both the economic and personal contact categories of the index. Hong Kong's ties with China also helped as China was responsible for a large and increasing share of the special administrative region's tourist visits, direct investment and trade.

Jordan debuted at number nine after finishing in the top 10 for the economic, social and political components of the index. Jordan has one of the highest levels of peacekeeping troop contributions of all U.N. member states.

Estonia joined the index at number 10 due to its economy's reliance on trade and investment, as well as openness to international tourists and business travelers. It received the third-highest economic score after Hong Kong and Singapore.

The United States dropped to seventh place in this year's rankings, finishing second-to-last (just above Algeria) in economic measures as overall trade grew only modestly and inward foreign direct investment shrank. But the country's continued high level of technological connectivity kept it from sliding out of the top 10.

Vietnam, another of the 10 new countries included in the index, debuted at 48 and ranked 10th in terms of trade, demonstrating its recent progress toward economic liberalization. Export-driven sectors such as textiles and garments helped the economy grow and further integrated Vietnam into global supply chains.

China fell 15 places in this year's expanded index to 66 overall. The country's decline is in part a result of lower trade growth compared to the previous year -- possibly as the country shifts its emphasis to domestic demand-led growth over export-led growth -- and a decline in the political index due to smaller increases in contributions to U.N. peacekeeping operations.

India's export of services and its total trade both rose by more than a third, but the country still finished near the bottom of the rankings at 71 overall. The country's standing as a premier offshoring destination with a booming economy often masks the fact that 70 percent of its population lives in rural areas. Despite a doubling of Internet users in 2005, only 5 percent of India's population had access to the Internet and less than half of its population was attached to the power grid.

Belgium, another first-year index participant, debuted at 15 overall. The country scored in the top 20 in both the economic and social indexes.

In addition to the rankings, this year's index also explores the relationships between a country's global integration and its size, Web traffic, and urban growth. The results show that:

• Globalization is a much larger imperative for smaller countries with small domestic markets and limited natural resources. Seven of the top 10 countries in the index have populations fewer than 8 million and eight have smaller land areas than the U.S. state of Indiana. But total trade as a percentage of gross domestic product for countries such as Ireland and Singapore is more than twice that of economic heavyweights China and India.
• More globalized countries have more international Internet bandwidth. The bandwidth of the United States, for example, so exceeds that of other countries that most of the e-mail traffic flowing between Latin America and Europe passes through the United States.
• Less globalized countries tend to have faster-growing cities. Low-ranking countries such as Nigeria, Bangladesh and Indonesia have urban growth rates much higher than countries that performed well in the index.
  

Complete survey results, methodology and more are available online.