ASIA
02 April 2014
Globalized Asia?
Asia's global giants like China, India and Japan, are missing out on many of the potential benefits of globalization, according to research by Germany's Bertelsmann Foundation.
Asia's global giants like China, India and Japan, are missing out on many of the benefits of globalization, according to research by Germany's Bertelsmann Foundation.
The Bertelsmann project proposes a broad-based definition of globalization, namely "the ever stronger economic, political and social interconnectedness of the world".
In doing so, it is inspired by the work of Nobel-prize winning economist Joseph Stiglitz for whom "globalization is much more than a simple expansion of global trade in goods and services". He sees globalization encompassing "many aspects of life in society: the international flow of ideas and knowledge, the sharing of cultures, global civil society and the global environmental movement".
Whether globalization is a blessing or a curse for humanity is still being debated, as the Bertelsmann Foundation said. "Proponents of globalization emphasize its opportunities (higher global material and immaterial wealth, increase in employment, reduction of absolute poverty), while its opponents prefer to call attention to its dangers (lower minimum standards, increased social inequality and increase of workload)".
But what is important in the Bertelsmann study is its attempt to measure the effects of increased globalization on economic growth over the period 1990 to 2011 for 42 industrialized and emerging countries.
How globalized are the world's leading advanced and emerging economies?
Virtually all the 42 countries surveyed have become more globalized these past two decades. Nevertheless, small countries like Ireland, the Netherlands and Belgium remain the most globalized. This is natural. Small countries must be open to survive. They are much more globalized than UK, France and Germany, which are in turn more globalized than the US.
Big countries like the US conduct much internal trade and investment between their different regions, and have a wide array of political and social interconnections between their states. The US is in fact case of microcosm of globalization. The smaller countries have also witnessed a greater rise in their degree of globalization.
Japan, India and especially China have seen great advances in the extent of their globalization. Nevertheless, they still remain much less globalized than the advanced countries -- with India being the least globalized, followed by China and then Japan, which is the most globalized of the Asian Big 3.
This is consistent with OECD work which indicates that they have very restrictive policies towards foreign investment, and World Trade Organisation analysis which shows that they still have many trade barriers. All countries have very low migrant populations and China has immense restrictions on Internet and press freedom.
Which countries have benefited most from globalization these past two decades?
All countries have seen econiomic benefits from increased globalization from 1990 to 2011 -- ranging from a 24% increase in GDP per capita of the United States due to increased globalization to a whopping 166% in the case of Estonia.
In fact, the countries that have benefited most from increasing globalization have been former communist countries like Hungary (140%), Slovenia (133%), Latvia (130%), Romania (126%), Bulgaria (123%), and Lithuania (117%). This is hardly surprising as they were still yet to emerge from their communist isolation in 1990, and they have since made very impressive transitions to market economies.
Despite their current troubles, Greece and Portugal also greatly benefited from increased globalization, with GDP per capita being boosted by 147% and 130% respectively. They both undertook impressive reforms as they integrated into the European Union. Advanced continental countries have also benefited greatly, notably Germany (92%), Italy (70%), and France (64%).
But Asia's global giants, China, Japan and India, which now dominate global trade and finance, have benefited much less than most of the above countries. Increasing globalization only resulted in more modest rises in GDP per capita -- China (56%), Japan (68%) and India (36%).
The message from the Bertelsmann study could not be more clear for these three Asian economies. As China and India have now moved onto a slower growth path, and Japan has been bogged down in a weak economy for more than two decades -- the time is now ripe to launch a new phase of economic growth by deepening their connections to global economy, society and polity.
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
The Bertelsmann project proposes a broad-based definition of globalization, namely "the ever stronger economic, political and social interconnectedness of the world".
In doing so, it is inspired by the work of Nobel-prize winning economist Joseph Stiglitz for whom "globalization is much more than a simple expansion of global trade in goods and services". He sees globalization encompassing "many aspects of life in society: the international flow of ideas and knowledge, the sharing of cultures, global civil society and the global environmental movement".
Whether globalization is a blessing or a curse for humanity is still being debated, as the Bertelsmann Foundation said. "Proponents of globalization emphasize its opportunities (higher global material and immaterial wealth, increase in employment, reduction of absolute poverty), while its opponents prefer to call attention to its dangers (lower minimum standards, increased social inequality and increase of workload)".
But what is important in the Bertelsmann study is its attempt to measure the effects of increased globalization on economic growth over the period 1990 to 2011 for 42 industrialized and emerging countries.
How globalized are the world's leading advanced and emerging economies?
Virtually all the 42 countries surveyed have become more globalized these past two decades. Nevertheless, small countries like Ireland, the Netherlands and Belgium remain the most globalized. This is natural. Small countries must be open to survive. They are much more globalized than UK, France and Germany, which are in turn more globalized than the US.
Big countries like the US conduct much internal trade and investment between their different regions, and have a wide array of political and social interconnections between their states. The US is in fact case of microcosm of globalization. The smaller countries have also witnessed a greater rise in their degree of globalization.
Japan, India and especially China have seen great advances in the extent of their globalization. Nevertheless, they still remain much less globalized than the advanced countries -- with India being the least globalized, followed by China and then Japan, which is the most globalized of the Asian Big 3.
This is consistent with OECD work which indicates that they have very restrictive policies towards foreign investment, and World Trade Organisation analysis which shows that they still have many trade barriers. All countries have very low migrant populations and China has immense restrictions on Internet and press freedom.
Which countries have benefited most from globalization these past two decades?
All countries have seen econiomic benefits from increased globalization from 1990 to 2011 -- ranging from a 24% increase in GDP per capita of the United States due to increased globalization to a whopping 166% in the case of Estonia.
In fact, the countries that have benefited most from increasing globalization have been former communist countries like Hungary (140%), Slovenia (133%), Latvia (130%), Romania (126%), Bulgaria (123%), and Lithuania (117%). This is hardly surprising as they were still yet to emerge from their communist isolation in 1990, and they have since made very impressive transitions to market economies.
Despite their current troubles, Greece and Portugal also greatly benefited from increased globalization, with GDP per capita being boosted by 147% and 130% respectively. They both undertook impressive reforms as they integrated into the European Union. Advanced continental countries have also benefited greatly, notably Germany (92%), Italy (70%), and France (64%).
But Asia's global giants, China, Japan and India, which now dominate global trade and finance, have benefited much less than most of the above countries. Increasing globalization only resulted in more modest rises in GDP per capita -- China (56%), Japan (68%) and India (36%).
The message from the Bertelsmann study could not be more clear for these three Asian economies. As China and India have now moved onto a slower growth path, and Japan has been bogged down in a weak economy for more than two decades -- the time is now ripe to launch a new phase of economic growth by deepening their connections to global economy, society and polity.
Author
John WestExecutive Director
Asian Century Institute
www.asiancenturyinstitute.com