Estonia breaks into globalization top 10

Oct 23, 2007
By Mike Collier

TALLINN -'s Estonia has been ranked as the world's tenth most globalized nation in the latest A.T. Kearney/Foreign Policy Globalization Index.

The index tracks and assesses changes in global integration, incorporating measures such as trade and investment flows, movement of people across borders, volume of international telephone calls, Internet usage, and participation in international organizations.

The 72 countries ranked in the 2007 Globalization Index account for 97 percent of the world's gross domestic product (GDP) and 88 percent of the world's population.

Estonia's burgeoning reputation as a country that has embraced globalization and turned the process to its advantage is reinforced by the report, which waxes lyrical about the Baltic nation's economic policies.

"Milton Friedman would be at home in Estonia," the report enthuses. "That's because the small former Soviet republic has put many of the late Nobel Prize-winning economist's ideas to the test. The result? Estonia, having shaken itself free from its communist-era shackles, may now qualify as the first Baltic Tiger; it debuts this year at number 10 in the index.

"In keeping with Friedman's free-market philosophy, the country's government has moved aggressively to open itself up to the outside world. For all practical purposes, Estonia has no corporate income tax, and shareholder dividends are subject to a simple flat tax. Bureaucracy isn't a problem, either; the government just steps aside to let investors do their thing. The World Bank ranks Estonia 17th among 175 economies in ease of doing business, and sixth in ease of trading across borders. Additionally, the government places no restrictions on foreign ownership of real estate, which has fueled a property investment boom among overseas buyers."

And Estonia's bid to join neighboring Finland as a centre of cutting-edge technological excellence seems to be paying dividends, too.

"Although the index ranks Estonia 21st in technological connectivity, the country seems poised to pounce higher," the report says. "The country, dubbed by some as 'E-Stonia', has launched a large online government initiative and even declared Internet access a fundamental human right. In March, it held the world's first general election that allowed e-voting over the Web.

"Former Prime Minister Mart Laar, who stepped down in 2002, is widely credited with introducing most of the policies that have helped his country roar ahead of the pack."

For the fourth time in seven years, Singapore tops the list as the most globalized country in the world, followed by Hong Kong, the Netherlands, Switzerland, Ireland, Denmark, the United States, Canada, Jordan and Estonia rounding out the top ten.

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