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Advanced economies benefit from globalization much more than developing countries and NICs

Date

24 Mar 2014

Sections

Global Europe
Gütersloh – March 24, 2014

Bertelsmann Stiftung study: Germany is one of the biggest winners / Globalization responsible for 20 percent of growth since 1990  

Globalization has increased prosperity primarily in the world’s advanced economies over the last two decades, while benefitting developing and newly industrialized countries (NICs) less. That is one of the key findings from a study recently carried out by the Bertelsmann Stiftung on the impact that globalization has had in 42 nations. According to the study, the world’s increasing interdependencies have not closed the gap between first-world countries such as Finland, Denmark and Japan, on the one hand, and NICs, on the other. On the contrary, while per-capita gross domestic product (GDP) increased in the top 20 industrialized nations by some €1,000 per year on average due to globalization, it rose in countries such as Mexico, China and India by less than €100.

Germany is one of globalization’s biggest winners, benefitting more than any other country except Finland, Denmark and Japan. Between 1990 and 2011, for example, the trend toward greater political, economic and social interdependency around the globe increased Germany’s real GDP by an average of €100 billion each year, accounting for some 20 percent of the country’s economic growth. That means, between 1990 and 2011, Germany gained an extra €2 trillion in GDP thanks to globalization, equivalent to approximately 90 percent of GDP in 2011, or an average €1,240 per person per year. Switzerland, Austria and Israel are the countries that follow Germany in the ranking of globalization’s winners.

Conducted by Prognos AG on behalf of the Bertelsmann Stiftung, the study calculates for the first time the degree to which national economies have grown as a result of globalization. According to the study, all of the 42 countries examined experienced increased growth due to globalization. Per-capita income, for example, rose in all of the countries, although increases per person were lowest in absolute terms in the major NICs, i.e. South Africa, Brazil, Russia, Mexico, China and India.

“This makes clear that globalization tends to widen the gap between rich and poor,” said Aart De Geus, chairman and CEO of the Bertelsmann Stiftung. “Only over the long term will it help reduce the difference in prosperity between the world’s advanced economies, on the one hand, and developing countries and NICs, on the other.” At the same time, a new round of protectionism would be the wrong response to this development, De Geus noted, since economic isolationism reduces growth effects in NICs. “First-world countries are the ones who benefit from globalization in particular, which means more proactive development cooperation is needed,” he said. 

To help less developed countries catch up with their developed counterparts, the Bertelsmann Stiftung experts recommend integrating developing countries and NICs into the global economy to a greater extent than has been the case in the past. According to the experts, industrial nations should open their markets to products from less developed countries, reduce their subsidies for agricultural products at home and fund educational programs and the expansion of infrastructure, production facilities and the relevant technologies in developing countries and NICs.

About this project: Based on the KOF Globalization Index developed at ETH Zürich, the Globalization Index employed in the above study was used to measure the impact global trends are having around the world. In addition to economic globalization, the index examines aspects of social globalization (tourism, migration) as well as political globalization (institutionalized interdependencies, foreign relations, etc.). This Bertelsmann Stiftung project is designed to examine how inclusive growth in Germany and in other countries can be achieved in light of ongoing globalization. Inclusive growth is defined here as growth that is environmentally, economically and socially sustainable as well as intergenerationally just.

Contact:

Dr. Jan Arpe, Telephone: +49 5241 / 81-81 157
E-mail: Jan.Arpe@bertelsmann-stiftung.de

Dr. Thieß Petersen, Telephone: +49 5241 / 81-81 218
E-mail: Thiess.Petersen@bertelsmann-stiftung.de

More information is available at http://www.bertelsmann-stiftung.de/cps/rde/xchg/SID-DD9BB27B-E146794B/bst_engl/hs.xsl/nachrichten_120603.htm.

Jürgen Noack
Communications & Outreach Manager
Brussels Office

Follow-us on Twitter: @BStBrussels

Bertelsmann Stiftung
Résidence Palace | Rue de la Loi 155 | 1040 Brussels | Belgium
Phone: +32 2 233 38 95 | Fax: +32 2 280 32 21 | Mobile: +32 470 870 366
E-Mail: juergen.noack@bertelsmann-stiftung.de | www.bertelsmann-stiftung.de | www.bertelsmann-stiftung.de/bruessel

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