Never before have the forces of globalization been so evident in our daily lives. An estimated 2 billion people witness Live Earth, a series of concerts held in 11 locations around the world to raise environmental awareness. Chinese manufacturers decorate toys with paint containing lead, and children around the world have to give up their Batmans and Barbie dolls. Mortgage lenders in the United States face a liquidity crunch, and global stock markets go berserk. Good, bad, and ugly -- the effects of our supposedly "flattened" world are undeniable. But just how strong are these ties that bind? As former U.N. Secretary-General Kofi Annan once remarked, "Globalization is a fact of life. But I believe we have underestimated its fragility."
That fragility is particularly apparent in this edition of the Globalization Index, the seventh annual collaboration between FOREIGN POLICY and A.T. Kearney. This year's index draws on data from 2005, a year that, on the surface, exemplified the limitations of globalization’s reach. It began with the fallout from the devastating Indian Ocean tsunami, which left at least 300,000 dead, in part because there was no transnational network for emergency alerts in the region. Eight months later, similar scenes unfolded when Hurricane Katrina hit New Orleans, where the benefits of globalization failed to reach the poorest citizens of the world's wealthiest country. Not long afterward, an earthquake devastated Pakistan-administered Kashmir, where officials put the death toll at 75,000, with more than 2.5 million left homeless.
The limits of globalization weren’t evident only against the backdrop of natural disasters; there were political fault lines, too. Sectarian violence continued to escalate in Iraq. Iran traded the conciliatory Mohammed Khatami for a more isolationist president, Mahmoud Ahmadinejad, who called for Israel to be "wiped off the map." North Korea announced it had nukes. Voters in France and the Netherlands rejected a new European Constitution. And four suicide bombers terrorized London on July 7 with coordinated attacks on public transportation.
Despite the turmoil in many parts of the world, nations did prove they could play nice with each other. The Middle East was home to some unexpected moments of cooperation, with Israel's withdrawal from settlements in Gaza and the West Bank, and Syria's pulling its forces from Lebanon after a 29-year occupation. On the economic front, cooperation in regional trading blocs grew, even as the Doha round of global trade talks continued to stumble. The United States approved a free trade agreement with the Dominican Republic and Central American nations, and Southeast Asian economies implemented several bilateral agreements of their own.
The inevitable push and pull of globalization plays out in the index's rankings, which incorporate indicators such as trade, foreign direct investment, participation in international organizations, travel, and Internet usage to determine rankings of countries around the world. This year, we added 10 states to the original list of 62 in an effort to expand representation from various regions. Together, the 72 countries account for 97 percent of the world's gross domestic product and 88 percent of the world's population. The index measures 12 variables, which are grouped into four "baskets": economic integration, personal contact, technological connectivity, and political engagement.
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