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India ranks second last in A T Kearney-Foreign Policy Globalisation Index news
Our Business Bureau
25 October 2007

When the results of the annual study on globalisation done by consulting firm AT Kearney and Foreign Policy magazine, were put together, India found itself No.71 in a list of 72 countries. Singapore ranked first for the third consecutive year. Hong Kong, Jordan, and Estonia debuted among the top 10 most globalised nations in their first year on the Globalisation Index.

The AT Kearney-Foreign Policy annual study 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. (See top 20 list below.)

Hong Kong was ranked second; the Netherlands jumped four places to third, followed by Switzerland and Ireland at fourth and fifth. The United States dropped four spots to seventh, despite its continued strength in the index''s technology score. Jordan and Estonia were ninth and tenth, respectively.

The 2007 edition of the index is the largest and most comprehensive to date, having added 10 economies to take the total to 72. The index accounts for 97 per cent of global gross domestic product and 88 per cent of the world''s population. It measures 12 variables grouped into four categories: economic integration, personal contact, technological connectivity, and political engagement.

The index quantifies economic integration by combining data on trade and foreign direct investment. Technological connectedness is gauged by counting Internet users, Internet hosts, and secure servers.

Political engagement is assessed by taking stock of the number of selected international organizations and the number of selected international treaties that each country signs, as well as each country''s financial and personnel contributions to U.N. peacekeeping missions and levels of governmental transfers. Personal contact is charted by looking at a country''s international travel and tourism, international telephone traffic and cross-border transfers, including remittances.

The 2007 index does not, however, base itself on 2007 data. This year''s index actually examines 2005 data, because that is the most recent year for which data is available.

Select country highlights
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 travellers. 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:

    • Globalisation 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 US 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 globalised countries have more international Internet bandwidth. The bandwidth of the US, for example, so exceeds that of other countries that most of the e-mail traffic flowing between Latin America and Europe passes through the US.

    • Less globalised 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.
Top 20 most globalised countries
Hong Kong
United Kingdom
New Zealand
United States
Czech Republic

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India ranks second last in A T Kearney-Foreign Policy Globalisation Index