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.

1. GOOD TIMES OR BAD TIMES
FOR GLOBALIZATION?
TOP
10
10
Highlights from the Depth
Index of Globalization 2013
01
BOTTOM
139
139. IRAN,
ISLAMIC
REPUBLIC
HONG KONG
SAR (CHINA)
02
138
MYANMAR
SINGAPORE
GLOBALIZATION STALLED IN 2012
03
Globalization’s
post-crisis recovery
stalled last year.
The world was still less
deeply interconnected
in 2012 than it
was in 2007.
LUXEMBOURG
04
IRELAND
05
BELGIUM
06
137
BANGLADESH
136
PAKISTAN
135
BURUNDI
134
NETHERLANDS
OVERALL DEPTH OF GLOBALIZATION,
2005 - 2012
07
CENTRAL AFRICAN
REPUBLIC
133
NEPAL
MALTA
08
132
MALAYSIA
ETHIOPIA
09
131
VENEZUELA, RB
BAHRAIN
10
130
BRAZIL
ESTONIA
THE DEPTH INDEX IS BASED
ON FOUR ”PILLARS” – BROAD
CATEGORIES OF INTERNATIONAL FLOWS:
TRADE PILLAR
The proportion of goods and services exported across national
borders dipped from 32.1% in 2011 to 31.6% in 2012.
CAPITAL PILLAR
Foreign direct investment dropped 18% in 2012, but international
portfolio equity investment rebounded.
INFORMATION PILLAR
International internet bandwidth soared; average person spent
140 minutes on international phone calls, up from 88 in 2005.
PEOPLE PILLAR
International tourist arrivals crossed 1 billion for the first time
ever. Migration and international education grew modestly.
BIG SHIFT TO EMERGING ECONOMIES
The rise of emerging economies is reshaping these
international flows and driving most of their growth.
Emerging Economies’ Share of World Totals
Exports
2000
FDI Outflows
2000
2012
Int’l Internet
Bandwidth
2000
2012
2012
Int’l Tourist
Arrivals
2000
0%
10%
20%
2012
30%
40%
50%
60%
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)
Advanced
FDI Outflows
(% of Gross Fixed Capital
Formation)
Advanced
Int’l Internet Bandwidth
(Per Internet User)
(nearly equal)
Advanced
Int’l Tourist Arrivals
(Per Capita)
Emerging
(4x more globalized)
Emerging
(6.6x more globalized)
Emerging
Advanced
(7.4x more globalized)
Emerging
HOW “GLOBAL” ARE WE REALLY?
Advanced
economies
Emerging
economies
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).
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.
77% 53%
2008-2012
2012-2018
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.
Healthy Fundamentals and Room to Grow
Despite 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.
© 2013 Pankaj Ghemawat
DOWNLOAD THE REPORT
Full report, 139 country profiles, and complete source references at www.ghemawat.com/dig