Globalization’s Best Year

Spurred by robust economic growth, global integration deepened substantially in 2000, a year that saw record gains in most indicators of international exchange. The value of world merchandize exports, for instance, surged by more than 12 percent in 2000, while trade in services jumped by 6.1 percent—both more than triple the previous year's growth rate. Similarly, foreign direct investment (FDI) marked a spectacular increase in 2000, growing from $1.08 trillion in 1999 to $1 .27 trillion in 2000, compared with only $203 billion in 1990. Much of this investment was driven by corporations buying or merging with companies in other countries, contributing to increasingly global multinational firms. In but one example of the results, top French firms earned more than two times more revenue from their foreign affiliates than from their domestic sales in 2000, double the level early in the 1990s. And foreign sales, on average, nearly equaled domestic sales for leading firms in the United Kingdom, Germany, and Italy.

The strong global economy and a host of events tied to the millennium also prompted the most extensive growth in global tourism in at least a decade. Worldwide, travelers made an additional 50 million trips across national borders in 2000 to reach 698.8 million international arrivals, up from 457.2 million a decade before. Asia and the Pacific saw the most substantial growth, but virtually all regions experienced considerable new flows of visitors from abroad. Other aspects of personal connectedness also grew. Cross-border telephone traffic, for example, saw a steady growth of roughly 10 billion minutes in 2000, driven primarily by rapidly declining costs.

At the same time, the number of Internet hosts (computers that allow users to communicate with one another along the Internet) continued to climb, growing by 44 percent in 2000. Yet this expansion was substantially slower than in earlier years and about one-third less than the explosive growth in 1999, a boom year for Internet related businesses. In part, this slowdown reflects the downturn in the dot-com economy, but it may also have to do with saturation in some key markets, with growth in Internet users also cooling in 2000 to its lowest rate since the Internet's emergence as a mass communications medium in the mid-1990s. Even so, 80 million new users logged on to the Internet for the first time in 2000. And as a sign of changes to come, 2000 may well have been the first year in which English was no longer the majority language on the Web. Estimates show that 192 million English speakers had regular access to the Internet, compared with 211 million non-English speakers. Although English remained the single most dominant language, Japanese, Chinese, and German were gaining ground, with the population of Spanish speakers set to experience substantial growth in coming years.

In short, levels of global integration reached new highs in 2000, capping a decade of dramatic expansion in global economic flows and political engagement as well as the increased mobility of people, information, and ideas. While such free movement is likely to remain a defining characteristic of our suddenly smaller world, its persistence in the coming years cannot be taken for granted. Indeed, many of the countries that score high on the index are the ones most likely to bear the brunt of globalization's unwinding.

Winners and Losers As was true in last year's index, small trading nations tend to show higher levels of integration with other countries than their larger neighbors, although the relationship between size and globalization remains complex. Last year, the A.T. Kearney/ Foreign Policy Magazine Globalization Index revealed that Singapore was the "most global" nation. Topping this year's list is Ireland, a country whose levels of economic integration have boomed since 1998, the end of our previous survey, in which Ireland ranked sixth.

Ireland's strong pro-business policies and English-speaking population have long drawn interest from overseas business, helping to transform the island into a highly attractive location for foreign investors. Yet in the past two years, the Celtic Tiger has really begun to roar. In a bid to attract more international capital and technology investments, the country has cut corporate tax rates (already among Europe's lowest) and adopted a National Development Plan designed to improve infrastructure and government efficiency. Privatization of state assets in telecommunications and banking have created positive signals for investment, while Ireland's decision to join the euro currency zone has dramatically reduced barriers against financial flows to and from other euro zone countries.

Ireland was also among the world's largest beneficiaries of the global boom in high tech and information technologies. Its success in attracting investments in earlier years gave it a "first mover" advantage when these industries began to experience truly global growth. By 2000, technology giants such as Microsoft, Intel, Gateway, and Global Crossing were calling the "Silicon Isle" their European home. These high tech investments help explain Ireland's steadily growing FDI inflows, which rose from an average of close to $3 billion per year throughout the mid-i 990s to $20.5 billion in 2000, or nearly $5 500 per resident (three times more than the $1 653 per resident in Finland).

Even more dramatic has been the increase in portfolio capital flows, marking Ireland's rise as an important center for international financial transactions. These inflows and outflows totaled a scant 1 .6 percent of the national economy in 1996, on par with countries like Chile, the Czech Republic, and Israel. By 2000, however, portfolio flows had grown to the world's largest when measured as a share of gross domestic product, owing largely to the growth of Dublin's International Financial Services Center, a leading location for international banking, investment funds, corporate treasury, and insurance activities.
Ireland also scores high in other indicators, Its growing tourist industry and advanced telecommunications infrastructure, for example, place the country atop the ranking for personal connections across international borders, and its rapidly growing online population places it among Europe's Internet leaders.

Singapore slipped to third place in this year's Globalization Index, largely as a result of its performance in certain economic indicators. While the island economy remained the world's top trading nation, it struggled to take full advantage of the rising tide of global portfolio capital flows. A reorganization of its primary stock exchange helped to pull in some additional capital and position the country as a future financial center, but the country evidently proved less attractive than others with larger or more dynamic economic hinterlands, including the combined euro zone. Thus, while portfolio inflows to Ireland grew by some $26 billion between 1998 and 2000, Singapore saw only $1.3 billion in additional inflows.

Yet Singapore continued to score well in a variety of other categories, most notably in terms of personal connectedness. Although already leading the world in international telephone traffic per capita, for example, residents increased average call times in 2000 by another 2.5 percent, bringing the total to nearly 400 minutes per person in outgoing international calls alone (with another 317 minutes per person in incoming calls).

The United States and Canada remain the leaders in Internet penetration. Nearly 35 percent of the U.S. population and 41 percent of the Canadian population were online by January 2001, putting the two countries well within the world's top 10, if slightly behind the competition in Scandinavia. The United States excels in levels of its infrastructure development, with one Internet host for every three residents—more than triple the number in Sweden, Norway, and Finland and more than 10 times the number in the United Kingdom. The United States also maintains some 77 000 of the world's 118 000 secure servers (computers capable of supporting encryption and other advanced functions necessary for e-commerce transactions). And the vast majority of worldwide Internet content is physically housed in the United States, which helps to explain why 95 percent of the bandwidth that ties together world regions flows to and from the country.

Last year's Globalization Index revealed that, in terms of Internet use and development, Scandinavian countries had far outpaced their continental neighbors in the closing years of the 1 990s. By 2000 however, Oceania (comprising Australia and New Zealand) began to emerge as a new regional center, with higher average levels of connectedness than even the Scandinavian countries. In Australia, the online population topped 35 percent in 2000, surpassing the United States, while New Zealand ranked fourth in the number of Internet hosts per resident. Both countries also ranked within the world's top five in providing secure servers per capita. As in Scandinavia, this dramatic growth may have as much to do with a combination of economic prosperity and a sense of geographic isolation—along with the convenience of Internet communication across the vast distances of sparsely populated countries—as it does with supportive policy environments.

One of the most heated debates about globalization today is whether competition between countries forces them to cut taxation—as well as social spending—in order to attract foreign investors and other international business interests. Some observers have argued that, in this way, globalization generates a race to the bottom in which local populations lose out as their governments curtail spending on the jobs, education, and social safety nets that higher taxation levels might support.

To test this hypothesis, we looked closely at World Bank statistics on each country's level of taxation as well as government expenditures on the full range of public goods and then compared each against Globalization Index scores. Our findings show that taxation levels and spending levels go hand-in-hand but that neither correlates well with levels of globalization. In fact, some of the highest levels of taxation are in countries that are also highly globalized, and levels of spending vary across the board. Israel and the Czech Republic, for example, rank among the most global of emerging markets, yet collect taxes totaling more than 40 percent of national economic output. Those levels are far above tax collection rates in such countries as Colombia, Indonesia, and Pakistan, which rank much lower on the Globalization Index. By the same token, Sweden and Finland, which rank among the world's most global countries, boast levels of social spending that are among the most generous in the world—all supported by relatively high tax rates. And with Scandinavian countries attracting record levels of FDI in recent years, there is little evidence that high tax rates are driving away investors, who appear more concerned about economic prospects, available infrastructure, education levels, and other fundamentals.

Digital Divide Although 2000 saw an unprecedented surge in global integration, a closer look at the data reveals a more mixed picture for the developing world. For instance, although emerging markets have seen Internet access grow at remarkable rates (on average twice the rate in the developed world in recent years), those same markets are still dwarfed by the industrialized countries. The Organization for Economic Co-operation and Development (OECD) estimates that 95.6 percent of the world's Internet hosts in 2000 were located in its member countries. By the end of 2001, OECD countries are likely to have had more than 100 Internet hosts for every 1 000 inhabitants, while the rest of the world may be lucky to average 1 for every 1 000.

This digital abyss only made it more difficult for many emerging markets to expand their integration with the rest of the world in 2000 (although emerging markets might make up ground in 2001). While no region experienced net "de-globalization", several individual countries—including Botswana, Egypt, Peru, and Saudi Arabia—saw their levels of integration decline relative to the rest of the world, suggesting an inability to keep pace with the increased movement of goods, capital, people, and ideas (as well as technological developments) at a global level. Even as emerging markets attracted $265 billion of new FDI, for example, their share of total flows declined for the fourth year in a row—from 43 percent in 1997, followed in each year by 30 percent, 23 percent, and 21 percent. Meanwhile, African countries attracted several million new tourists but saw their combined share of the booming global tourism market hover at 4 percent of the global total.

Moreover, evidence suggests that some regions are becoming relatively less integrated within the world economy. The African countries, for example, saw their average level of economic integration fall, then rise, then fall again over the past six years, a reflection of variable economic performance and the rise and fall of prices for oil and commodity exports, their main connection to global economic markets.

Reading aids and expressions:

1、Spurred by robust economic growth, global integration deepened substantially in 2000, a year that saw record gains in most indicators of internaitonal exchange.

在此句中

　　1）global integration deepened substantially in 2000 是主句

　　2）Spurred by robust economic growth 是过去分词短语，作状语，修饰谓语动词“deepened”表示原因

　　3）a year that saw record gains in most indicators of internaitonal exchange 是同位语，说明其前面的名词“2000”，对其作补充说明，其中的“that saw record gains in most indicators of internaitonal exchange”是限制性定语从句，修饰名词“year”

2、Topping this year’s list is Ireland, a country whose levels of economic iintegration have boomed since 1998, the end of our previous survey, in which Ireland ranked sixth.

　　1）在此句中，因为主语再加上修饰语比较长，而谓语比较短，因而句子采用倒装的形式，谓语在前，主语在后

　　2）此句谓语动词是“top”，用的是进行时态“is topping”，宾语是“this year’s list”，“(is) topping this year’s list”放在句子的前面

　　3）Ireland, a country… ranked sixth 是句子的主语，其中的“a country… ranked sixth”是同位语，对名词“Ireland”进行补充说明；在同位语中，whose levels … ranked sixth是限制性定语从句，修饰名词“country”；在限制性定语从句中，the end of our previous ssurvey, in which Ireland ranked sixth也是同位语，它对“1998”进行补充说明，其中的in which Ireland ranked sixth是个非限制性定语从句，修饰名词“survey”

3、on par with

to be at the same level or standard 与…相同，e.g.

　　1）The wages of clerks were on a par with those of manual workers.办公室职员的工资与干体力活的工人的工资相同。

　　2）Some of the local products are on a par with the best foreign makes.有些本地产品与最好的外国货的水平相同。

4、By 2000, however, portfplio flows had grown to the world’s largest when measured as a share of gross domestic product, owing largely to the growth of Dublin’s International Financial Servies Center, a leading locaiton for internaional banking, investmetn funds, corporate treasury, and insurance activities.

在此句中

　　1）By 2000, however, portfplio flows had grown to the world’s largest是主句

　　2）when measured as a share of gross domestic product是个省略了主语和助动词（they were）的时间状语从句，修饰主句中的谓语动词“had grown”

　　3）owing largely to … insurance activities是介词短语，作状语，也修饰谓语动词“had grown”，表示原因，其中的a leading locaiton for internaional banking, investmetn funds, corporate treasury, and insurance activities 是同位语，对Dublin’s International Financial Servies Center进行补充说明

5、Its growing tourist industry and advanced telecommunications infrastrucutre, for example, place the country atop the ranking for personal connnections across intereantional borders, and its rapidly growing online populaiton places it among Europe’s Internet leaders.

　　1）这是个由并列连词“and”连接而成的并列句

　　2）Its growing tourist industry and advanced telecommunications infrastrucutre place the country atop the ranking for personal connnections across intereantional borders 和its rapidly growing online populaiton places it among Europe’s Internet leaders是两个采用“主语（Its growing tourist industry and advanced telecommunications infrastrucutre和its rapidly growing online populaiton）+谓语动词（place(s)）+宾语（the country和it）+其它成分（atop the ranking for personal connnections across intereantional borders和among Europe’s Internet leaders）”结构的简单句

6、And the vast majority of worldwide Intenet content is physically housed in the United States, which helps to explain why 95 percent of the banwidth that ties together world regions flows to and from the ecountry.

在此句中

　　1）And the vast majority of worldwide Intenet content is physically housed in the United States是主句

　　2）which helps … the ecountry是非限制性定语从句，修饰“the United States”对其进行补充说明；其中why 95 percent of the banwidth that ties together world regions flows to and from the ecountry 是宾语从句，做动词“explain”的宾语；在宾语从句中还有一个限制性定语从句“that ties together world regions”，修饰“banwidth”

7、Some observers have argued that, in this way, globalization generates a race to the bottom in which local populaitons lose out as their governemnts curtain spending on the jobs, education, and social safety nets that higher taxation levels might support.

在此句中

　　1）Some observers have argued是主句

　　2）that, in this way…might support是宾语从句，作动词“have argued”的宾语，其中：
in which local populaitons … might support是限制性定语从句，修饰名词“race”，在定语从句中还有“as”引导的时间状语从句as their governemnts … levels might support，修饰动词“lose out”；在时间状语从句中还有一个限制性定语从句“that higher taxation levels might support”，修饰动名词“spending”

8、By the same token, Sweden and Finland, which rank among the world’s most global countries, boast levels of social spending that are among the most generous in the world – all supported by relatively high tax rates.

在此句中

　　1）By the same token, Sweden and Finland boast levels of social spending 是主句

　　2）which rank among the world’s most global countries是非限制性定语从句，修饰名词“Sweden and Finland”

　　3）that are among the most generous in the world是限制性定语从句，修饰动名词“spending”

　　4）all supported by relatively high tax rates 是过去分词短语，修饰名词“levels of social spending”

9、And with Scandinavian coutnries attracting record levels of FDI in recent years, there is little evidence that high tax rates are driving away investors, who appear more concerned about economic prospects, available infrasturture, education levels, and other fundamentals.

在此句中

　　1）there is little evidence是主句

　　2）And with Scandinavian coutnries attracting record levels of FDI in recent years是个由介词“with”+ 名词“Scandinavian coutnries”+现在分词短语“attracting record levels of FDI in recent years”构成的复合结构，作状语，表示原因

　　3）that high tax rates … fundamentals是同位语从句，说明“evidence”的内容，其中who appear more concerned … fundamentals是非限制性定语从句，补充说明名词“investors”

10、By the end of 2001, OECD countries are likely to have had more than 100 Internet hosts for every 1,000 inhabitants, while the rest of the world may be lucky to average 1 for every 1,000.

　　1）这是个由并列连词“while”连接的并列句

　　2）在第一个分句中，By the end of 2001介词短语表示“在2001年底前就（已经）”，所以动词不定式用的是完成时态“to have had…”

11、The African countris, for example, saw their average level of economic integration fall, then rise, then fall agaisn over the past six years, a reflection of variable economic performance and the rise and falll of prices for oil and commodity exports, their main connection to global economic markets.
在此句中

　　1）The African countris, for example, saw their average level of economic integration fall, then rise, then fall agaisn over the past six years是主句，其中的“fall, then rise, then fall agaisn over the past six years”是省去了符号“to”的动词不定式，作动词“saw”后宾语“their average level of economic integration”的补足语

　　2）a reflection of … economic markets是省略了关系代词和连系动词“which was”的非限制性定语从句，修饰其前面的句子（所表示的内容），对其进行补充说明；其中的“their main connection to global economic markets”是同位语，对名词“oil and commodity exports”进行说明

Questions: