The World's Globalization Index

For the past five years, Foreign Policy magazine has tried to measure globalization, country-by-country. We discuss the recently released results with the magazine's editor-in-chief.

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FRANK STASIO, host:

This week, public radio stations around the country are examining the issue of globalization and how we are all connected. For the past five years, Foreign Policy magazine, along with the A.T. Kearney consulting firm, have tried to actually measure globalization country by country with something they call the Globalization Index. The most recent issue was released in their latest findings--has been released. And joining me now to discuss the results is Moises Naim. He's the editor in chief of Foreign Policy magazine.

Mr. MOISES NAIM (Editor in Chief, Foreign Policy Magazine): Thank you. How are you?

STASIO: What--I'm fine. What exactly does the index measure?

Mr. NAIM: It measures the way in which countries are related to each other, the ties that unite countries. And we look at a variety of indexes. We look at economic--the traditional ways of measuring trade and investment, but we also look at technology--the number of Internet users, or we look at the national travel and tourism or the number of minutes of international long-distance calls--telephone conversations between people. We also look at the political relationships and ties. And then we aggregate those numbers into one number and we run the countries.

STASIO: And what does that tell you?

Mr. NAIM: It tells us we have--we measure 62 countries that account for 96 percent of the world economy and about 85 percent of the world's population. And it gives us a ranking. And the top-ranked country is Singapore.

STASIO: Singapore is sort of related to more countries in more ways than any other country?

Mr. NAIM: Right. According to the four clusters, the four baskets, of numbers that we look, which are economic, the personal people-to-people contact, and then technology--communications--and political. The second one is Ireland, and the third is Switzerland, and the United States comes in at fourth place.

STASIO: Wow. So you've got two countries that are islands and one that is the absolute archetype of isolation in the mountains.

Mr. NAIM: Yes. We also have the Netherlands and Canada...

STASIO: Wow.

Mr. NAIM: ...Denmark, Sweden, as...

STASIO: So are there correlations between sort of life within those countries, their relations generally internationally, and their interconnectedness?

Mr. NAIM: Yes. One of the fascinating results of having done this now for five years is that we look at our ranking and then compare that ranking with other rankings; for example, the way in which countries are ranked on how religious they are, or income distribution or happiness. There is a happiness index. There's a survey that goes around the world and asks people how they rank. And on the environment--how environmentally friendly different countries are. And by doing that, we have very often been very surprised by how our results are different from what we had expected and what most people think.

STASIO: How so?

Mr. NAIM: Well, for example, more globalized countries--countries that have more links with the rest of the world--have a better income distribution than those that don't. The less globalized you are, the worse is economic justice and distribution in your country.

STASIO: Yeah. How do you measure that? When you talk about the--you're not talking about overall wealth; you're talking about the distribution of wealth in countries with greater connectedness.

Mr. NAIM: Right. We just look at our ranking and--which measures globalization, and then we look at other rankings and, you know, countries do measure the income distribution. There are measures that tell you which countries have better or worse income distributions. And we discovered that our ranking is contrary to measures of income distributions. Country that have better income distributions are more--fare better in our index.

STASIO: What are some of the other surprises?

Mr. NAIM: Well, the globalization and the environment--global countries tend to be more environmentally friendly. They are indexes. These are--we don't have all those indexes. We use other people's indexes. We measure globalization and then compare it to others. Corruption, for example--the more open, the more integrated a country fares in our index, the less--the lowest its ranking in the corruption scale. And we...

STASIO: Have you speculated about why this might be, why this--it certainly is counterintuitive on all three of those scores. Any idea what's going on?

Mr. NAIM: Well, we have been very careful not to ascribe causalities here. We're not saying that one thing causes the other. We just show that there are these surprising results, that the more globalized a country is, the more links it has with the rest of the world, it fares differently. For example, another one is wages. Globalized nations tend to have the highest manufacturing wages. So the more open you are to the rest of the world, the higher the wages of your workers.

STASIO: We're talking today about globalization and the Globalization Index. You're listening to TALK OF THE NATION from NPR News.

I'm Frank Stasio in Washington, sitting in for Neal Conan. Moises Naim is the editor in chief of Foreign Policy magazine, talking about the Globalization Index, an index that takes a look at the interconnectedness of countries in a lot of different ways, having to do with communications, having to do with trade and other factors.

Over what period of time does the survey cover?

Mr. NAIM: Well, we started five years ago, and we measure a year ago, so this--I'm talking about data collected in year 2003.

STASIO: How does the US rank?

Mr. NAIM: US ranks fifth--I'm sorry, fourth. And it ranks, of course, very high in technology and also, of course, very high in terms of its contribution to personal contacts and visits and connectedness to other countries in terms of personal interactions.

STASIO: And you say--What did you say?--it was fourth? Does that represent...

Mr. NAIM: Fourth.

STASIO: ...a change in position?

Mr. NAIM: Yes. This year the United States jumped. It used to be less. And essentially, it's driven by changes in foreign investment and economic indicators.

STASIO: Does your survey take into account immigration?

Mr. NAIM: Yes, it does. Yes, it does. And we have international travel and tourism, and we have also--we measure remittances, for example--the money that immigrants send back to their countries--as a measure of how countri--you know, that is an interesting link--indicator of a country's tie to another.

STASIO: Who's at the bottom of the list?

Mr. NAIM: Very interesting question. At the bottom of--the lowest-ranking countries, the five lowest-ranked countries are--last one is Iran, and next to that is India, Indonesia, Egypt, Bangladesh and Brazil.

STASIO: And these are all countries that, again, by your index, are least interconnected or least related. China--where's China on this? I guess maybe my question is--because I would anticipate that China would be--show the greatest change, a country like China or India.

Mr. NAIM: Right.

STASIO: Have they?

Mr. NAIM: China ranks 54 out of 62. And, yes, China has had a lot of change. But remember that China is still very large, and most of China is not that integrated. You have some specific pockets of globalization within China. Shanghai comes to mind, in which there is a lot of investment and trade and communications. But then they have--you have the hinterland in rural China, which continues to be not well integrated, even to China itself.

STASIO: Now you've been doing this for five years, right?

Mr. NAIM: Yes.

STASIO: What got you started? Why did you think this'd be a good idea?

Mr. NAIM: We were very interested in sorting out some of the assertions that were being made on globalization. We discovered that there was not a lot of numbers about this, that people had very strong, strongly held feelings and sentiments and opinions, but they were not often based on numbers. And so we tried to start--we started compiling the numbers and looking, and we wanted, essentially, to present one set of data that would allow the conversations to be anchored on facts and not only on opinions.

STASIO: And is every country in the world included?

Mr. NAIM: No. We--unfortunately, the sort of data we use is not available for every country. We do have--do use 62 countries. But, as I said at the beginning, the 62 countries that we measure are 96 percent of the world's economy and 85 percent of the world's population.

STASIO: And so what's the cutoff? How do you decide where to stop? It has to do with...

Mr. NAIM: No, we don't make that decision. It's just in terms of the availability of data. We need to rely on data that--and ev--and so if a country does not have the data, we cannot include it.

STASIO: When you look at some of these factors and you say, `Well, the more interrelated a country is, the less corruption there is, the better distributed their wealth,' is there anything to sort of parse out whether a country in process needs to learn something from those at the top of the list? Are there things that they could actually learn and sort of skip ahead and not have to go through all the terrible trial of unequal distribution and corruption that...

Mr. NAIM: Yes. There--the index, per se, doesn't speak to that. Again, we have been very humble and very careful just to offer the data for others to start the conversation and eventually develop it further. But there is no doubt that, for example, doing as much as you can to improve the communications infrastructure of your country--that that openness is certainly not a bad thing to have...

STASIO: Mois...

Mr. NAIM: ...both inside your country and to the rest of the world.

STASIO: Well, I want to thank you very much for talking with us.

Mr. NAIM: Thank you very much for the opportunity.

STASIO: Moises Naim is editor in chief of Foreign Policy magazine. He joined us by phone.

This is TALK OF THE NATION from NPR News. I'm Frank Stasio.

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