The Globalization Index 2007: Standing Still

In 2005, member states of the Association of Southeast Asian Nations (ASEAN) implemented bilateral free trade agreements with Australia, India, Jordan, and New Zealand, were negotiating for eight more trade pacts, and started early talks for regional agreements with four other countries. Exports in the region jumped nearly 15 percent, and inflows of foreign direct investment rose 45 percent. Overall trade was up more than 70 percent from four years earlier.

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It would seem that ASEAN has fully recovered from the Asian financial crisis of 10 years ago. Multinational corporations continue to invest in the region, increasingly adopting business strategies in which they build a second manufacturing plant in an ASEAN nation as a backup in case things go downhill in China. Yet, with the exception of perennial champion Singapore, the region’s countries place relatively low on the index. And if the addition of new countries is taken into consideration, Southeast Asian nations’ relative rankings remain virtually unchanged from last year. Why the stagnation? Simply put, there’s been little trickle-down effect. As former U.S. President Jimmy Carter once said, "If you’re totally illiterate and living on $1 a day, the benefits of globalization never come to you." Take Thailand, for example. The country ranks an impressive seventh in trade, with exports growing 14 percent and imports jumping 25 percent between 2004 and 2005. But the fruits of economic growth, such as improved technological infrastructure, are still not available to most people in Thailand; the country ranks 49th in Internet access. Although the number of Internet users in Thailand is growing between 20 and 30 percent each year, nearly 85 percent of them are concentrated in urban areas. Unsurprisingly, Thailand?s cities are home to better education systems, higher investment in infrastructure, and more employment. The benefits of globalization rarely reach the 68 percent of the population that lives in rural areas.

Southeast Asian countries also continue to rank poorly in international political participation. Malaysia may rank third in trade, but it places an abysmal 63rd in the political dimension. You don’t exactly see a lot of Malaysian troops deployed around the globe on U.N. peacekeeping missions. Nor do you see Southeast Asian nations donating much foreign aid. The region certainly has been a beneficiary of international political cooperation — most notably with relief efforts in the aftermath of the devastating tsunami in December 2004. Perhaps the political rankings of ASEAN states will go up as they find ways to give back. Indonesia, which ranks 67th in participation in U.N. peacekeeping missions, recently offered to contribute troops to a joint U.N.-African Union effort in Darfur. Such initiatives may help it lead the ASEAN pack in the years ahead.