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Is it the best of times or the worst of times for globalization? The 2013 Depth Index of Globalization (DIG) reveals that overall, globalization’s post-crisis recovery stalled in 2012. The DIG uses hard data to rank 139 countries on the depth of international trade, capital, information and people flows, and it provides insights into the future course of globalization. Visit http://www.ghemawat.com/dig for the full 2013 DIG report and other resources.
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HOW “GLOBAL” ARE WE REALLY?
THE DEPTH INDEX IS BASED ON FOUR ”PILLARS” – BROAD
CATEGORIES OF INTERNATIONAL FLOWS:
TRADE PILLAR
OVERALL DEPTH OF GLOBALIZATION, 2005 - 2012
The proportion of goods and services exported across national borders dipped from 32.1% in 2011 to 31.6% in 2012.
CAPITAL PILLARForeign direct investment dropped 18% in 2012, but international portfolio equity investment rebounded.
INFORMATION PILLARInternational internet bandwidth soared; average person spent 140 minutes on international phone calls, up from 88 in 2005.
PEOPLE PILLARInternational tourist arrivals crossed 1 billion for the first time ever. Migration and international education grew modestly.
TOP10
BOTTOM 10
HONG KONG SAR (CHINA)
SINGAPORE
LUXEMBOURG
IRELAND
BELGIUM
NETHERLANDS
MALAYSIA
MALTA
BAHRAIN
ESTONIA
139. IRAN, ISLAMIC
REPUBLIC
BRAZIL
VENEZUELA, RB
ETHIOPIA
NEPAL
CENTRAL AFRICAN REPUBLIC
BURUNDI
PAKISTAN
BANGLADESH
MYANMAR
02
03
04
05
06
07
08
09
10
01
138
137
136
135
134
133
132
131
130
139
BIG SHIFT TO EMERGING ECONOMIES The rise of emerging economies is reshaping these
international flows and driving most of their growth.
Exports
0% 10% 20% 30% 40% 50% 60%
FDI Outflows
Int’l Internet Bandwidth
Int’l Tourist Arrivals
Emerging Economies’ Share of World Totals
2000
2000
2012
2000 2012
2012
2000 2012
Emergingeconomies
Healthy Fundamentals and Room to GrowDespite recent downward forecast revisions, the world economy is still projected to grow faster between 2012 and 2018 than in the 1980s, the 1990s or the first decade of this century. This implies that the largest threat to globalization actually comes from policy fumbles rather than macroeconomic fundamentals.
In advanced economies, the average person takes an international trip every 1.7 years. In emerging economies, people have to wait 14 years on average to travel abroad.
People in Hong Kong SAR (China) spent more time than people anywhere else talking on international phone
calls in 2012: 53 hours (versus only 6 minutes in Rwanda, which ranks last on phone calls depth).
Emerging economies’ share of the world’s economic output has nearly doubled since 2000. Emerging economies contributed 77% of growth from 2008-2012 and are expected to contribute 53% from 2012 to 2018.
Western Europeans guess immigrants make up 25% of their countries’ populations, about twice the correct
answer of 12%. Americans are even further off, guessing 42% (versus correct answer of 14%).
25% of Twitter followers, 10-15% of Facebook friends and less than 5% of phone calls (including calls placed over the internet) cross national borders.
Advancedeconomies
2008-2012
77% 53%2012-2018
© 2013 Pankaj GhemawatFull report, 139 country profiles, and complete source references at www.ghemawat.com/dig DOWNLOAD THE REPORT
BUT EMERGING ECONOMIES ARE MUCH LESS GLOBALIZED THAN ADVANCED ECONOMIES.
If emerging economies become more globalized as they grow wealthier, the big shift beyond trade has only just begun.
How much More Globalized are Advanced Economies than Emerging Markets?
Exports (% of GDP)
FDI Outflows(% of Gross Fixed Capital
Formation)
Int’l Internet Bandwidth(Per Internet User)
Int’l Tourist Arrivals(Per Capita)
Advanced
Emerging
Advanced
Emerging
Advanced
Emerging
Advanced
Emerging
(nearly equal)
(4x more globalized)
(6.6x more globalized)
(7.4x more globalized)
GLOBALIZATION STALLED IN 2012
Globalization’s post-crisis recovery
stalled last year. The world was still less deeply interconnected
in 2012 than it was in 2007.
GOOD TIMES OR BAD TIMES FOR GLOBALIZATION?
Highlights from the Depth Index of Globalization 2013
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