Republic top of the globalised economy league

 

Ireland is by far the world's most globalised economy, according to a study of 62 countries to be published in the US today.

The Globalisation Index puts Ireland well ahead of countries seen as having open economies, such as Singapore, in third place, and New Zealand, in 19th.

Ireland is also substantially more globalised than the world's big economies. Britain, in 10th place, is the only one of the five biggest economies in the top 10, while the US is 12th.

However, the European Union scores highly overall, with the Netherlands, Sweden, Finland, Denmark and Austria also in the top 10, and France, Germany, Portugal and Spain in the next 10. At the other end of the index, Iran and Peru barely register, while Argentina, Mexico, South Africa, Turkey, Pakistan, China, India and Brazil are all among the 20 least globalised countries. Japan is 38th, Russia 39th.

Although there is a correlation between globalisation and prosperity, the survey says the relatively poor standing of larger countries is in part because they tend to produce a bigger proportion of goods and services within their borders.

The study, produced by Foreign Policy magazine and AT Kearney, the management consultants, analyses trends in economic integration, international political engagement, personal contacts and information technology take-up.

It concludes that Ireland has the highest degree of economic integration of the countries studied - in part because its membership of the euro has "dramatically reduced" barriers against financial flows to other EU countries.

Ireland is also one of the biggest beneficiaries of the boom in information technologies, with huge foreign direct investment from companies such as Microsoft and Intel.

It also benefited from a surge in portfolio capital flows, marking its emergence as an important centre for international financial transactions.

It scored highly for global personal contacts, in part because of a growing tourist industry and advanced telecommunications infrastructure. These advantages pushed Ireland to the top of the globalisation league from sixth place in the last index, published a year ago. Singapore suffered from a slowdown in the growth of portfolio flows.

However, the index covers developments to the end of 2000. The end of the technology boom and recession in the US - the source of most of Ireland's foreign direct investment - may have damaged its standing in the past 12 months.