Global Presence - Elcano Royal Institute empty_context Copyright (c), 2002-2018 Fundación Real Instituto Elcano Lotus Web Content Management <![CDATA[ The EU’s external projection: some interpretations based on the Elcano Global Presence Index ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari21-2018-olivie-gracia-eu-external-projection-based-elcano-global-presence-index 2018-02-16T01:54:13Z

If the EU were a single country, its global presence would be almost as large as that of the US.

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Theme

If the EU were a single country, its global presence would be almost as large as that of the US.

Summary

The Elcano Global Presence Index calculates the external projection of 100 countries. Their presence is classified in three dimensions: economic, military and soft. The Index also allows for the calculation of the EU’s global presence as if it were a single country. This paper aims to analyse this presence and its evolution from different perspectives. It describes the EU’s role in the world, looking at the development of its presence by different Member States (highlighting the importance of the UK, Germany and France) and, finally, at intra-EU relations. The comparison of the results of the key elements of the extra-EU presence of the entire Union and the intra-EU presence of its Member States shows what could be called the ‘British paradox’: the UK is an important player for extra-EU relations and, for that same reason, has a more discrete intra-EU presence than Germany. In more general terms, this paper shows a significant world presence of the EU in many economic, soft and military fields. This contrasts with the Union’s proactivity in shaping the globalisation process.

Analysis

The Elcano Global Presence Index is a tool for the analysis of international relations. It aims to quantify the external projection of countries (currently 100). Global presence is divided into three dimensions: economic (exports and investments), military (troops deployed and the means for it) and soft presence (science, technology, migration, tourism, culture, sports, information and development cooperation). The Index is calculated for the years 1990, 1995, 2000, 2005 and 2010-16. That is, since 2010 the calculation is carried out annually, thus allowing for revealing transformations in the world order since the end of the Cold War.

The time series shows different global trends that have been analysed in various publications since 2011.1 ‘Old powers’ have tended to lose global presence (in relative and also, in some cases, absolute terms) coinciding with both the period of rapid globalisation (during the 2000s and early 2010s) and the Great Recession, while emerging and developing countries have been massively adhering to the process of globalisation and swiftly gaining global presence. As a result, several emerging countries (particularly in Asia and with an outstanding performance by China) have been gaining positions in the Global Presence Index ranking over the years.

The Index also shows a rapid globalisation since 1990 (and particularly since 2000), followed by a slowing down between 2012 and 2015 and, finally, what could be the beginning of a de-globalisation phase in 2015.2

The Elcano Global Presence Index also allows for the calculation of the EU’s global presence as if it were a single country.3 This paper aims to analyse its presence and its development from different perspectives. First, it describes the EU’s role in the world (its ranking position, quota and contribution to variables/dimensions). Secondly, it looks at the construction of its presence by different Member States (including the variables/dimensions provided by each of them). Finally, in the third and last section, it focuses on intra-EU relations.

The EU in the world

If the EU were a single country, it would rank 2nd in global presence after the US, which is 1st, and be followed by China, Japan and Russia (Graph 1). In 2016 the EU’s index value was 2,320 points and that of the US 2,457. Given the small gap between the two, both have been sharing the two top positions over the 2005-16 period: the EU topped the ranking between 2011 and 2013 and, again, in 2015. It should also be noted that the gap with the 3rd country in the ranking, China, is significant (since the latter had an index value of 689 in 2016). Therefore, most probably, the EU and the US will be maintaining or alternating their positions in the coming years.

http://explora.globalpresence.realinstitutoelcano.org/en/ranking/iepg/global/2016/2011/null/null/1

Countries can expand their external projection (therefore increasing their global presence index over the years) and do so at a slower pace than others (therefore reducing their global presence in quotas or relative terms). This is the case of ‘old powers’, Western countries that are still hanging on to the top positions of the ranking (as a result of decades or even centuries of internationalisation), even increasing their global presence in absolute terms (with the exception of the crisis years) but reducing their share of added global presence of all 100 countries (their quota). This pattern is that of the EU as a whole.

The economic crisis, which has especially hit the EU, has had an impact on its presence. On the one hand, it has led to a drop in international cooperation flows and on the number of immigrants received. On the other, it has slowed down the growth of the economic dimension, although this has been offset by the geographical re-orientation of exports to other regions of the world. Thus, the EU records a loss of global presence in absolute terms. Therefore, its current 2016 record (2,320 points) is at the same level as it was back in 2011 (2,322 points).

In the same vein, the EU has been steadily decreasing its share of total global presence from 27% in 2010 to less than 25% in 2016. It should be noted that the US’s loss of quota is even greater: after a peak of almost 29% of the world’s external projection in 2010, the figure decreased to a minimum of less than 22% in 2010 and then recovered to nearly 24% in 2016 (Graph 2).

Graph 2. US and EU global presence (in index value and %)

Countries or blocs of countries with high levels of global presence generally have them on the basis of an extended international projection in all fields, that is, in all or numerous global presence variables and dimensions. This is the case of the EU, which has the world’s highest values in the economic (3,296 points in 2016 vs 2,928 for the US) and soft (1,750 points vs 1,745 for the US) dimensions. Only in the military dimension is the US hegemony maintained (1,508 points vs 2,844 for the US).

Therefore, the EU leads globally particularly in the economic dimension. It tops the world ranking in three out of five economic variables: primary goods, services and investments. Given its allowance of natural resources, it is 3rd in energy as it also comes 3rd in manufactures, after the US and China. This leading role also applies to some variables of the soft dimension. The EU projects the highest external projection in tourism, sports, science and development cooperation. The US records a higher global presence in the rest of the soft variables.

Its growing presence since 2005 is based on the economic dimension, in which the euro’s stronger role as an international currency has been a contributory factor. As a result, the economic dimension explains almost 57% of the Union’s global projection, with an outstanding share corresponding to the variable of investments (36.5% of the total). It should be noted that the world or average pattern of external projection shows a slightly lower contribution of the economic dimension (less than 54%) and a significantly lower weight of investments (less than 22%). The outstanding role of investments is partly due to the comparatively higher contraction of other variables as a result of the effects of the Great Recession. This is the only economic variable referring to stocks rather than flows (the other four economic variables indicate countries’ exports) and therefore the less sensitive variable of the five to a changing juncture.

The different soft variable records are more even. However, science, culture and technology are the highest contributors in 2016 (Table 1). Again, when compared to an imaginary ‘world pattern’, these variables stand out as European features with the exception of technology. This variable’s contribution to the average global presence is lower in the EU (5.2% vs 6.5%). The contrary is the case with the other two: culture has a nil contribution to the world’s external projection while science accounts for only 4.3% of the average profile of contributions (6.1% for the EU).

Table 1. The EU’s global presence by contribution (index value and % of EU global presence, 2016)

A few Member States build the EU’s global presence

The EU’s global presence can be analysed geographically. It is possible to calculate the extent to which each of the 28 Member States contribute to the total external projection of the whole territory. Data for 2016 show that the UK is the main contributor to European global projection, followed by Germany, France, Italy, Spain and the Netherlands. The three top countries account for over 54% of Europe’s global presence (Table 2). This ranking does not record major changes over the last decade. Actually, the only change among the top six spots is that, since 2005, the Netherlands and Spain have switched their positions.

However, there is a certain (although very timid) de-concentration of such contributions as ‘big’ Member States have slightly lost weight over the past decade. All six, with the exception of Spain, record losses that range from 0.3 to 1.3 percentage points. These losses are offset by increased contributions from Ireland (1.6 additional percentage points between 2005 and 2016), Austria (1.2), Hungary (0.8), Spain (0.8), Luxembourg (0.6) and Romania (0.6).

These figures show what we have called the ‘British paradox’ in previous analyses. The UK is the leading contributor to the EU’s external presence and yet its foreign policy narrative insists on the country’s extra-European links. These two phenomena are actually consistent: British non-European links are precisely an important asset of the EU’s projection outside its borders. For that same reason, another big player with strong intra-European links such as Germany comes only 2nd when defining the EU’s non-European presence.

Table 2. EU global presence by Member State

The importance of the EU’s big three and the economic dimension also show up when the contributions are broken down both by Member State and dimensions or variables. The top three contributions are those of the same three Member States (the UK, Germany and France) in the economic field. These are followed, again, by the UK’s and Germany’s contribution to the EU’s external soft projection. A fourth country, the Netherlands, only appears in sixth place, on account of its economic contribution (Graph 3).

Graph 3. Main contributions by Member State and dimensions to the EU’s 2016 global presence

Contributions by Member States and variables reveal the same pattern. The top five individual contributions are those of extra-EU stocks of foreign direct investment of the UK, Germany, France, the Netherlands and Spain. Other important contributions through that same variable are those of Ireland, Austria, Italy, Sweden and Hungary. The first soft contribution appears in eighth place, German technology, which is very much aligned with the same country’s contribution to extra-EU global presence through manufactures (in seventh place). Services also play a significant role (specifically, those of the UK, Germany and France), probably linked to the variables of investment, technology and science. In other words, several forms of global presence reinforce each other. Development cooperation also plays a significant role in Europe’s external projection. However, relevant contributions in this area are limited to those of Germany and the UK (Table 3).

Table 3. Main contributions by member state and variables to the EU’s 2016 global presence (in %)

Germany, the UK and France lead the intra-European projection of Member States

The Elcano European Presence Index calculates the internationalisation of the Member States within the perimeter of the Union since 2005 and following the general methodology of the Elcano Global Presence Index.

As with the Member States’ contributions to the EU’s global presence, the big three top the ranking. However, and due to what can be defined as the ‘British paradox’, with 804 index value points in 2016, Germany tops the list (as the Member State with the largest projection in the EU sphere), followed closely by the UK (748 points) and, at a certain distance, by France (515 points) (Graph 4). These three countries are followed by the Netherlands, which is in fourth place. As mentioned above, the Netherlands is the sixth-largest contributor to the EU’s external projection. The fact that it is up two positions with respect to the previous ranking shows a certain intra-European profile of external projection, like the German and unlike the British. Indeed, given the strong economic links between the Netherlands and Germany, both countries’ external projections might be strongly interlinked. On the contrary, Spain and Italy are down three and one positions, respectively, with regards to the ranking on contributions, showing a relatively extra-European projection (with respect to other Member States).

Another feature of the Elcano European Presence Index is its low variability. The top seven countries are the same since the beginning of the time series, in 2005. The strength and consistency in the external projection of this group of countries allows for only one minor change among the group and for the 2005-16 period, with Belgium down from fifth to seventh position in 2010 and 2011 and then recovering back to fifth place in 2012. As in any other index (including the Elcano Global Presence Index), variability increases in the lowest positions of the ranking. However, in general terms, and unlike with the Global Presence Index, there have been no tectonic shifts in the group (such as those of Asian countries and, particularly, China).

Graph 4. Elcano European Presence Index top 14 positions (index value, 2011 and 2016)

Conclusions

If the EU were a single country, its global presence would be almost as large as that of the US. Although the Union’s index value has been slightly decreasing (both in absolute and relative terms) since the Great Recession, it is undoubtedly a key actor on the world scene and, therefore, a potential maker and shaper of the globalisation process and global governance. There might be a gap between its presence and the power or influence exerted by the EU in the world order,4 something that could be interpreted as a lack of will to transform the asset or input (global presence) into an outcome or output (global or regional influence). This issue is indeed a key element of the recently published EU Global Strategy5 that calls for a more active role of the Union in global governance.

Once Brexit is completed and the UK exits the EU, the global presence values of both parties will be affected. It is difficult to foresee the direction and magnitude of the impact. The intense EU-UK relations will then (automatically) become part of the EU’s external presence (leading to an increase in the EU’s external presence). However, in parallel, the EU will lose the UK’s contribution to its external presence –the highest among all Member States due to what could be called the British paradox–. As for the UK, its global presence might be affected in many different ways depending on how the country re-shapes its foreign relations with both the EU and the rest of the world as a result of Brexit.

Methodology

The EU’s foreign presence is measured starting in 2005 and considering that its changing composition should be reflected in the Index. Both the Union’s global presence and the Union as the sphere of external projection calculated in the European Presence Index change with every new enlargement. As a result, the Union’s presence corresponds to that of 25 members in 2005, 27 from 2010 to 2012 and 28 since 2013.

Graph A.1. Structure of the Elcano Global Presence Index

To measure the EU’s presence in the world we maintain the components of the Elcano Global Presence Index (Graph A.1). For each of these components and for every member, the intra-European and extra-European flows must be differentiated, since a mere totalling of their results would be recording their projection in other Member States (ie, consider the intra- and extra-European trade in German goods). This distinction between flows has been made feasible by using additional sources of data, especially Eurostat (Table A.1).

Starting with the 2012 edition we now calculate the presence of the individual Member States within the Union itself: the Elcano European Presence Index.6 To some extent, methodologically, this indicator is the flip-side of the Global Presence Index for the EU. In a similar way to the latter, it shows the cross-border presence of the Member States, which in the case of the Elcano European Presence Index is limited to the European (and not global) space. It facilitates a comparative analysis of the current situation and recent evolution of the positioning of European countries within the Union. It can also provide relevant information on the position of the Member States in the calculation of their European as well as their global presence.

The Elcano European Presence Index aims to be an Elcano Global Presence Index on a European scale, so the structure and methodology of the latter has been respected as far as possible, although some slight modifications have occasionally proved essential (Table A.2). Thus, in general terms, the calculation of European presence modifies the calculation of global presence by reducing the measures of presence on a global scale to the intra-European scale (for example, intra-European migration flows, exports to the rest of the EU or European foreign students). For that reason, three indicators compute a zero value, as they are not part of European countries’ projection inside the EU: troops, military equipment and development cooperation. Moreover, given the indivisibility of some variables, there was no possibility of distinguishing the extra- from the intra-European component, so we stick to the values of global presence and re-scale them considering only the European countries. This is the case of sports, science and information (in its Internet component).

It almost always does so by using Eurostat data, just as for the calculation of the global presence of the EU. Obviously, the change in scale also reduces the scaling: the value of 1,000 assigned to the maximum indicator in the Elcano Global Presence Index is given, in the case of European presence, as the maximum value registered in 2010 by a member state and for the intra-European presence series. Finally, just as in the index for the EU, the reference area for which European presence is measured is the Union as it has been composed at different moments in time, variations being the result of the enlargement process.

Table A.1. Variables, indicators, and sources of the Elcano Global Presence Index calculated for the EU

Table A.2. Variables, indicators, and sources of the Elcano European Presence Index

Iliana Olivié
Senior Analyst, Elcano Royal Institute
| @iolivie

Manuel Gracia
Analyst on the Elcano Global Presence Index project
| @mgraciasn


1 See, for instance, Iliana Olivié & Manuel Gracia (2017), Elcano Global Presence Report 2017, Elcano Royal Institute.

2 This assessment is based on the evolution of the added value of global presence projected by all 100 countries. See Olivié & Gracia (2017), for more details.

3 This is done by adding the global presence of all Member States and deducting the intra-European presence of each. See Olivié & Gracia (2017) for more details.

4 This relation was explored in Iliana Olivié, Manuel Gracia & Carola García-Calvo (2014), Elcano Global Presence Report 2014, Elcano Royal Institute.

5 European Commission (2016), ‘Shared Vision, Common Action: A Stronger Europe. A Global Strategy for the European Union’s Foreign and Security Policy’, European Commission, June.

6 Results of the Elcano European Presence Index are available at www.globalpresence.realinstitutoelcano.org.

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<![CDATA[ Spain in the world: an analysis of the Elcano Global Presence Index 2016 ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari103-2017-olivie-gracia-gomariz-spain-in-the-world-analysis-elcano-global-presence-index-2016 2017-12-15T02:24:02Z

Spain maintains its 12th position in the Elcano Global Presence Index, although it has lost some measure of global presence in all of its dimensions (as have the other countries of the region).

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Original version in Spanish: España en el mundo: análisis en base al Índice Elcano de Presencia Global 2016

Theme

Spain maintains its 12th position in the Elcano Global Presence Index, although it has lost some measure of global presence in all of its dimensions (as have the other countries of the region).

Summary

Incorporating the latest data from 2016, Spain received a total global presence index value of 204.1. As a result, Spain maintained its 12th position in the classification of 100 countries calculated by the Elcano Global Presence Index. Spain’s strength continues to be the soft dimension (11th), as well as the economic (also 12th place). However, in the military sphere (17th), Spain’s international role is more passive.

The country’s global presence is projected domestically from all of its regions (or Autonomous Communities) and cities, although the leaders tend to be the largest in terms of economic output or population (ie, Madrid, Catalonia and Andalusia).

To draw a more precise picture of Spanish international activity that might inform foreign policy decisions, in this paper we calculate for the first time the geographic distribution of Spain’s global presence in the world. The strong concentration of Spain’s presence in Europe (more than 60%) is notable. Within Europe, the UK alone absorbs 13.5%. At the same time, the entire region of Latin America accounts for the same proportion (13.5%) of Spanish global presence. In Asia-Pacific, on the other hand, its presence is fundamentally ‘soft’ (with few economic variables involved).

Analysis

Spain maintains its 12th position in the global presence rankings, but it has lost some global presence in terms of ‘quota’. With an index value calculated at 204.1 in 2016, Spain remains in 12th place among the 100 countries included in the Elcano Global Presence Index. As we have detailed in previous analyses, Spain considerably increased its global presence, relative to other countries, from 1990 to 2016 (the period for which the Index has been calculated), due mainly to the fact that the country rapidly inserted itself into the global economy and international political system during that time. At the beginning of this period, for example, Spain had just joined NATO and was in the process of integrating into the EU.1

Figure 1. Leading positions in the Elcano Global Presence Index (index value: 1990 and 2016)

The new methodology2 used to calculate the Index this year continues to reflect the same characteristics of international projection that we have noted in previous versions of this study. Spain has tended to ‘economise’ its external action, placing it currently in the 12th position within the ranking for global economic presence (the same position it occupies in the overall presence index). However, in terms of military presence Spain falls to 17th place. On the other hand, in the soft dimension of international presence, Spain occupies 11th place.

It can be observed that, to a certain degree, the international projection of Spain after the economic crisis began to show more qualities that were characteristic during the 1990s as opposed to those that defined Spanish presence during the years before the Great Recession. For example, the contribution of the tourism variable, which explained 7.8% of Spanish global presence in 1990, now contributes 5%, more than 1.7 percentage points higher than in 2010. This ‘U’-shaped evolution is also observed in the contribution of commodities (6.9% in 1990, 5.8% in 2010 and 7.7% in 2016). Reflecting the same phenomenon, development cooperation began at 1.8% of Spanish global presence in 1990, reached 3.9% in 2010 and then fell to 1.2% in 2016, a level similar to that found in the 1980s when the country stopped being a recipient of official development aid.

However, the performance of other variables reflects the fact that certain structural changes in the nature of the country’s external projection have not been reversed by the years of crisis. For instance, science, which accounted for 2.3% of total presence in 1990, increased to 4.1% in 2010 and again to 5.9% in 2016. The same thing happened with culture: 3.3% in 1990, 4.6% in 2010 and 6% in 2016.

Although particular high value-added variables (at least potentially) have strengthened in Spain’s global presence over time, this does not mean, however, that the Spanish position has also improved relative to other countries. This can be seen in the ‘quotas’ of global presence –that is, the proportion of the aggregate presence of the 100 countries included in the Index that is projected by a single country, either in overall terms or in one of the particular dimensions or variables (see Graph 2)–. Like most other countries in its region, Spain has been losing global presence quota against the backdrop of the economic crisis in Europe and the US and recurring emergencies in the Global South.3 The loss has occurred in all three ‘dimensions’ of presence (although to different degrees): in the economic (a drop of 1.5 percentage points in the investment variable), military and soft dimensions. Spain’s soft presence has held up more resiliently for Spain than the other two dimensions (despite a sharp drop of 4 points in the development aid variable).

Figure 2. Quotas of economic, military and soft presence, Spain, % of total, 1990-2016

Madrid, Catalonia and Andalusia lead Spain’s global presence

In the same way that Spain’s global presence derives from distinct dimensions of activity (economic, military and soft), it can also be explained by the different international behaviour of the country’s 17 Autonomous Communities (regions) and two Autonomous Cities. There is a strong relationship between the contribution of these Autonomous Regions and Cities to global presence and their contribution to aggregate GDP. As such, it is not surprising that the larger proportions of international presence are projected from the regional communities of larger economic or demographic size: these include, in the following order, Madrid, Catalonia and Andalusia, which together account for 58.8% of Spain’s global presence.

Table 1 shows how, with the new methodology for calculating the Index, some Autonomous Communities continue to show a more ‘extrovert’ profile (when their contribution to aggregate global presence is larger than their contribution to GDP) while others are more ‘introvert’ (when the opposite holds). Particularly extrovert are Cantabria (16th in GDP but 7th it its contribution to global presence), Madrid and Catalonia. In contrast, the most introvert are Castilla-La Mancha (9th in GDP, 13th in global presence), Castilla-Leon, Valencia and Andalusia.

Figure 3. Autonomous Communities and Cities, Spain, % contribution to global presence and GDP

Some communities make a large contribution to Spain’s global presence in specific indicators. This is the case of the Balearic and Canary Islands: both make strong contributions to the tourism variable (as highlighted in this same analysis a year ago). It is also the case of Andalusia and Valencia with respect to commodities and Murcia with energy. Madrid makes the greatest contribution in services, investment, military equipment, troop deployment, culture, technology, education and development aid.4

At the time of writing this paper, internal territorial tensions in Spain were at one of their highest levels in recent history. For this reason, it is worth noting the important contribution of Catalonia to the country’s international projection, but also the nature of the principal elements by which Catalonia makes its contribution to Spain’s global presence. If Madrid is the Autonomous Community that participates the most in the economic and military dimensions of global presence (19.45% and 3.59%, respectively, in 2016), Catalonia is the region with the largest contribution to the soft dimension of the country’s external projection (7.49% in 2016). This leadership is also found in distinct variables (manufactures, migration, tourism, science, sports and information), some of which –as in the case of manufactured goods and science– were highlighted above as possessing higher value-added (at least potentially).

Spain: a European country, above all

For the 100 countries included in the Index, the methodology employed allows the volume of global presence to be calculated, along with its principal components (how the volume is distributed by dimensions and variables). In turn, this allows for an indication of the participation quota and position in the ranking of each country, in each dimension and variable. In addition, for the Member-states of the EU, these presences are also calculated (with their contributions, quotas, index values and ranking positions) within the EU space –what we have called the Elcano European Presence Index–.5 At the same time, the global presence of the EU is also calculated disaggregating contributions by geographic origin and identifying the relative contributions of each Member state. In the case of Spain, two years ago the Index6 began to also disaggregate global presence by geographic origin (as we reviewed, with respect to this edition, in the previous section).

Nevertheless, the distinct methodologies developed to date within the framework of this Project have not permitted a calculation for global presence by geographic destination. To apply this calculation to different countries or regions presented an important methodological challenge which, if it could be overcome, could provide very valuable information allowing for an answer to such questions as the following: what is the magnitude of the change in the axis of Latin American external action from the US towards China? What is the rhythm and depth of the process of European integration (which would be reflected in the magnitude of the presence of the Member states within Europe and its growth rate)? It is well known that China has significantly increased its presence in the world over the past decades, but exactly where is it projected? How much (and what kind of) Chinese exterior action is undertaken in Asia, and how much in other regions of the world?

To realise such a calculation would require, in short, ‘bilateralising’ the global presence of countries in each of its components (variables and dimensions). This is likely not to be feasible for each of the 100 countries included in this Index, given the need for databases which disaggregate this information in ‘bilateral’ form for each of the variables that comprise the Index.

Nevertheless, for this edition of the Index we have undertaken the calculation for Spain. With this new information, we gain both a snapshot and a sense of the evolution of Spain’s international projection in very detailed form. We already know what is the global presence of Spain, how it is composed by sector and geographically, and have identified the combined geographic and sectoral profiles (which communities contribute to which modalities of presence). Now, however, we can also know towards which regions and countries this presence is projected. With these findings and the analysis which follows, we wish to better inform Spanish foreign policy by contributing a deeper knowledge of Spain’s external action and presence.

The calculation incorporates an additional base of 5,757 data points that detail geographic distribution. It includes the breakdown by variables and dimensions of Spain’s presence in each of 25 countries and six regions for which we have gathered data for three moments in time (2005, 2010 and 2016). In this paper we limit ourselves to highlighting only a few of the principal results and findings.

With respect to the regional distribution of presence, Spain projects fundamentally into Europe (61.1% of the total Spanish global presence in 2016), and much less towards Latin America (13.6%), North America (8.4%), the Maghreb and the Middle East (7.2%), and Asia-Pacific (7%). Only marginal amounts of presence are projected towards Sub-Saharan Africa (2.7%) (see Table 2).

Figure 4. Regional distribution of Spain’s global presence, index value and as a % of the total, 2005-16

If the relative importance of each region in 2016 was approximately the same as it had been in 2005, there was significant divergence during the years of the crisis. In the second half of the 2000s, Europe absorbed somewhat less Spanish presence (falling 3.2 percentage points in 2010). This increased the proportions of presence projected towards the other regions, but especially towards Sub-Saharan Africa (5.6 additional percentage points in 2010). In the first years of the current decade, however, the trend reversed and the regional distribution of Spain’s global presence returned to its 2005 pattern. The crisis pushed Spain’s external projection, proportionally, towards Europe even more.

As was to be expected, the nature of Spain’s international projection varies with each region. While the links with Europe are mainly economic (more than 38% of the total economic presence in 2016) and to a much lesser degree soft, with very little military projection (16.8% and 6.2%, respectively) –a pattern similar to Spain’s presence in both Americas–, with Asia-Pacific the axis of Spain’s external projection is concentrated in the soft dimension, as it is with Sub-Saharan Africa (where, in addition, there is also some military dimension). This military axis is what clearly guides Spanish projection towards the Maghreb and the Middle East (see Table 3).

Figure 5. Regional distribution of Spanish global presence, by dimensions, % of total, 2016

This data could also be read by sector: in all the dimensions, the principal focus of presence is Europe. In the economic dimension, both North and Latin America are of some importance, as are Asia-Pacific and the Maghreb and Middle East (if to a much lesser degree). In the military dimension, the most important region for Spain is Europe; far behind are Africa and the Middle East, while in the soft dimension the second most important region, after Europe, is Asia-Pacific.

These figures confirm certain intuitive ideas, like the centrality of Europe in the exterior projection of Spain, as well as the relative significance of Latin America compared with the rest of the world’s regions. Still, such a high concentration in Europe –which absorbs 60% of Spain’s global presence– is striking. In this context, the relative importance of Latin America might appear to be surprisingly low. Along the same lines, it might also seem counter-intuitive that Spain’s soft presence in Asia-Pacific would be higher than in Latin America, or that Spanish economic presence in Asia-Pacific is practically nil.

Naturally, the disaggregation by variables also reveals the importance of Europe as the primary destination of Spanish presence in many of them. This is the case, according to 2016 data, in all of the economic variables, in military equipment and in all the soft variables except sports (for which the largest proportion of presence is projected towards Asia-Pacific), and in Latin America (to where the largest proportion of development aid flows).

This European dominance is also clear in the international distribution of Spain’s global presence by countries. Its top 15 presence destinations in 2016 were the UK (13.5% of global presence, approximately the same proportion as all of Latin America), France (7.5%, in large part due to the border effect), the US (7.3%), Germany (7.1%), Italy (4.1%), Turkey (4%), Portugal (3.7%), Brazil (2.9%), Mexico (2.8%), China (2.4%), Belgium (1.8%), Venezuela (1.5%), Chile (1.4%), Morocco (1%) and Canada (1%).

In this case we can also find some counter-intuitive results. For example, the importance of some Latin American countries does not correspond to the level of attention that they receive from the national media. This would certainly be the case of Venezuela, where Spain projects less global presence that it does in Belgium, or that of Argentina, where with less than 0.8% it has less significance in Spain’s international projection than Canada.

The figures for Turkey might also seem surprising: it is nearly as ‘important’ as Italy for Spain and even more than Portugal. In this particular case the results are driven by a strong military presence, linked to participation in the NATO mission along the Turkish borders and in the deployment of Patriot missiles.

These proportion have also varied over time. The five countries where Spain’s presence has grown the most, proportionally, from 2005 to 2016 are Turkey (3.4 percentage points), Venezuela (1.1), China (0.8), the US (0.8) and the UK (0.8). On the other hand, the five countries in which Spain lost the greatest proportion of external projection are Portugal (-1.3 percentage points), Brazil (-0.9), France (-0.8), Germany (-0.8) and Argentina (-0.2).

These results are consistent with the ‘re-Europe-isation’ of Spain after the crisis, given that, as pointed out above, the trend has not been uniform in 2005-16. Europe lost relative importance for Spain during the first sub-period (2005-10) but it gained during the second (2010-16).

As shown in Map 1, behind each rise or fall in presence (in absolute terms) can hide very different combinations in terms of dimension. For example, in France, where Spain lost projection, a marked loss in economic presence was partially offset by an increase in the soft dimension.

Conclusions

After a rapid increase that began in the 1990s (with the profile of an emerging market economy and/or a peripherical European country), the global presence of Spain expanded significantly until the economic crisis. This prompted a drop of 50 points in the Elcano Global Presence Index during the period 2010-16. The loss was more than proportional in the economic sphere (despite the growth in exports) and was only partially offset by the soft dimension.

Spain’s global presence is constructed principally from Madrid, Catalonia and Andalusia (in line with the relative contribution of each of these regional communities to the GDP). Catalonia’s contribution to Spain’s projection of soft presence stands out. The contributions of the Canary and Balearic Islands to tourism, and of Andalusia and Murcia to primary products, are also significant.

With respect to destination, Spanish external projection is fundamentally European. It was before the crisis (in spite of some diversification towards other regions in the previous years) and it is now afterwards, even to a larger degree in relative terms (despite a decline in absolute terms). The data from this geographic distribution also produce some surprises: the projection of presence towards Latin America is possibly less than expected (the entire region absorbs the same proportion of projection as does the UK by itself), Turkey is one of the principal destinations (due to the military dimension), while Spain projects soft –not economic– variables towards Asia-Pacific. In fact, the latter is the only region in which Spain increased its global presence after the crisis in terms of absolute values, as a result precisely of its presence in the soft dimension.

The information which distributes Spanish global presence geographically allows us to have an idea as to how, and towards where, the country projects its presence beyond its borders. With this, we offer one more ingredient for an informed articulation of foreign policy, such that it serves to preserve this projection of presence (geographic and sectoral) or even to mould it.

Methodological note

To calculate the destination of the global presence of Spain we maintain the same structure and relationship between indicators as used in the Global Presence Index (found in the methodological annex to the Global Presence Report 2016), but we use country-to-country bilateral data.

To the extent possible, we have tried to use the same data sources as those used in the general calculation of the Index, relying on alternative sources only when necessary (principally national sources, all of which are specified in Table A1). In some cases, the bilateral breakdowns of the variables included in the original methodology of the Elcano Global Presence Index presented methodological challenges, obliging us to rely on alternative variables which allow for an approximation of this bilateral information.

The indicators of the economic dimension could be relatively easily broken down by destination, obtaining Spain’s bilateral exports to each destination, in each of the merchandise and service categories. This was also the case with exterior stocks of foreign investment, which were broken down by destination using national sources.

Data on military presence were disaggregated based on information facilitated by the Ministry of Defence –in particular, the geographic destination of Spanish troops deployed abroad–. For the breakdown of the military equipment indicator, the missions which made effective use of equipment were identified, and then equipment use was considered to be proportional to the number of troops deployed. In the same way, for naval missions, presence was based on both troops and equipment, while for training or observation missions, troops and deployment of equipment were not reflected in the methodology. We are grateful for the assistance of Felix Arteaga, Senior Analyst of the Real Instituto Elcano, in this respect.

In the case of the soft dimension, some variables could be ‘bilateralised’ by relying on alternative sources (like migration, tourism, culture, technology or development aid) but others presented conceptual or methodological challenges.

In the case of sports –measured in the original methodology of the Index based on the FIFA points of the national football team and the number of Olympic medals– for the breakdown by destination we have relied on television audience data. In the first case, we have taken World Cup audiences by country, based on data provided by FIFA. However, we have not been able to obtain this information for the Olympic Games. Therefore, it has been necessary to rely on an alternative measure. We have acquired information on the number of households with televisions in each country to produce an approximate measure of the potential audience for the Opening Ceremony of the Olympic Games.

The geographic breakdown of the information indicator also presented some challenges because of the way it is conceptualized in the original methodology of the Index, with its measure based on the number of mentions in the principal news agencies (Associated Press, Reuters, AFP, DPA, ITAR-TASS, EFE, ANSA and Xinhua) and the Internet bandwidth in each country. For the press mentions, we have relied on the same database (Factiva) but we have obtained the number of notices in each of the principal agencies related to Spain in each country and region of the world, considering the total number of spoken languages in each. With respect to the Internet indicator, given the impossibility of a geographic breakdown of the variable included in the original methodology, we have relied on the number of households with access to Internet in each country as an alternative variable, based on information facilitated by the International Telecommunication Union.

Finally, the science indicator is measured in the original methodology of the Index based on the number of scientific publications according to Thomson Reuters’s Web of Science indexing service. For the breakdown by geographic destination of the scientific presence of Spain we have taken into consideration those articles co-published by a Spanish author with other authors of other countries of origin, based on information from the Web of Science Core Collection of Clarivate Analytics. We appreciate the cooperation of Sebastien Vellay in securing this information.

In the case of the Autonomous Communities, the data used to determine their contributions to presence are, in the main, national public sources, as indicated in Table A2. Many of these are broken down by region; in contrast, as occurred with the bilateral breakdown of Spanish presence, there are cases which do not allow for a clear geographic distribution, or they are expressed in geographic entities different from the Autonomous Communities. These methodological challenges are explained in the document on Spain’s global presence presented last year.7 We therefore refer back to it in order to understand further details. We also include a table of all the data sources.

Iliana Olivié
Senior analyst at the Elcano Royal Institute and Coordinator of the Elcano Global Presence Index Project
| @iolivie

Manuel Gracia
Analyst, Elcano Royal Institute
| @mgraciasn

Mª Dolores Gomariz
Master in International Economics and Development (UCM), research assistant in training for the Elcano Global Presence Index project during the preparation of this document (2017)


1 Iliana Olivié, Manuel Gracia & José Ignacio Díaz (2016), ‘La presencia global de España’, ARI, nr 67/2016, Elcano Royal Institute.

2 The details of this methodology are in Iliana Olivié & Manuel Gracia (2017), Informe Elcano de Presencia Global 2017, Elcano Royal Institute.

3 Iliana Olivié & Manuel Gracia (2016), Elcano Global Presence Report 2016, Elcano Royal Institute.

4 It should be borne in mind that the variables directly related to public spending can lend a certain over-representation for Madrid given the methodology used. For details, see Olivié, Gracia & Díaz (2016), ibid.

5 All of the data are available, in open access, on the Explore and Data sections of the Elcano Global Presence Index webpage.

6 Iliana Olivié, Carola García-Calvo & Manuel Gracia (Coords.) (2015), Elcano Global Presence Report 2015, Real Instituto Elcano.

7 Olivié, Gracia & Díaz (2016), Ibid.

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<![CDATA[ Global Spain: the country’s economic, military and soft presence ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/wp8-2017-chislett-global-spain-economic-military-soft-power 2017-06-30T11:21:23Z

Almost 500 years since Juan Sebastián Elcano completed the first circumnavigation of the world and a vast empire subsequently came into being, Spain has re-built a substantial but very different global presence.

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Index

(1) Summary – 2
(2) Elcano Global Presence Index – 3
(3) Economic presence – 7
 (3.1) Direct investment abroad – 7
 (3.2) Exports – 14
(4) Military presence – 21
(5) Soft presence – 22
 (5.1) Tourism – 22
 (5.2) Migrations – 23
 (5.3) Development cooperation – 24
(6) Conclusion – 24
Bibliography – 25

Summary

Almost 500 years since Juan Sebastián Elcano completed the first circumnavigation of the world and a vast empire was created, Spain has re-built a substantial but very different global presence. The Elcano Global Presence Index, first calculated for 1990 and which now covers 100 countries, measures this presence using objective data. The Index is based on three variables –economic, military and soft– and ranks Spain 12th. The country paid a high price during its Great Recession, which ended in 2013, although it did not regain the pre-crisis 2008 GDP level until the second quarter of this year, but one area –internationalisation– was hardly affected. The direct investment abroad of Spanish companies remains strong and exports of goods and services have surged. As regards its soft presence, the country successfully absorbed some 6 million migrants and tourism continued to set new records every year. Official development cooperation, however, has declined, while the military presence has held up, although it accounts for a smaller share of the global presence.

William Chislett
Associate Analyst, Elcano Royal Institute
| @WilliamChislet3

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<![CDATA[ The new drivers of Asia’s global presence ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari9-2016-esteban-new-drivers-asia-global-presence 2016-01-21T01:37:14Z

This paper examines the growing role of Asia in globalisation, showing that China is not the only important player and that its impact goes far beyond the economic dimension.

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Original version in Spanish: Los nuevos motores de la presencia global asiática

Theme

This paper examines the growing role of Asia in globalisation, showing that China is not the only important player and that its impact goes far beyond the economic dimension.

Summary

The pre-eminence of China on the global scene and especially in the economic dimension does not mean that it is the only emerging or Asian country with a consistent participation in the globalisation process, or that the internationalisation of the Asian countries is limited to only the economic sphere. Data for the overall region show an upward trend in both military and soft presence. While increasing external presence in Asia’s military domain responds mostly to the figures recorded by Japan and China, Asia’s soft presence is scattered among various countries, with South Korea, Singapore, Thailand and Malaysia all showing increasing shares of soft presence over the 1990-2014 period.

Analysis

Asia and especially China have gained considerably from economic globalisation since the end of the Cold War. And economic gain is without a doubt the best known facet of the process of internationalisation currently being experienced by most Asian countries.1 In this paper we explore other dimensions, military and soft, where the specific weight of Asia has also grown significantly, demonstrating that Asia is not merely China, and that the region’s growing international presence is not limited to the economic sphere.

When analysing the evolution since 1990 of shares of global presence by region, one notes both the decline of the traditional powers, Europe and the US, as well as the emergence of Asia (Table 1). In fact, the increase in the Asian presence is greater than the sum of the increased shares of all other regions that experienced expansion in that period. These developments point towards Asia soon overtaking America as the region with the second-largest share of global presence. In 2010, the US share of 20.5% was four points higher than Asia’s 16.5%. Four years later, the gap had narrowed to just four tenths of a percent: 18.4% versus 18.0%.

If we look at the ranking of countries that have increased their global presence since 1990 we can confirm the notion that China is mainly responsible for the dramatic increases in the share of Asian presence (Graph 1). Not surprisingly, China is the country whose share of global presence has grown most over the past quarter of a century. The Asian giant has increased its share by 3.7 points, equivalent to the sum of the current shares of global presence of Japan and Iceland.

The significant growth in China’s global presence currently accounts for 28.5% of the overall Asian share, versus only 12.6% in 1990. This increase in the specific weight of China’s share of Asia’s global presence has come largely at the expense of a declining Japanese presence (Graph 2). Nevertheless, China remains far from garnering the percentage share of Asian presence commanded by Japan in 1990, at about 42.7%.

However, this should not blind us to the meaningful advances made by other Asian countries. Indeed, China accounts for less than 50% of the positive gains in presence experienced in the region. Among the 10 countries that have raised their share of global presence, excluding China, four are Asian: South Korea, India, Singapore and Thailand. If we expand that range to the top 15, Malaysia also appears. If we combine the increased share in presence of those five Asian countries we obtain a rise of 4.0 percentage points, three tenths of a percent above China’s 3.7 points. As for the Asian countries that have lost shares of global presence since 1990, there are only two, Japan and Pakistan. The case of Japan corresponds to a traditional pattern experienced by post-industrial powers, mitigated by its rise in military presence. As for Pakistan, the main factor since the 1990s has been the decline in the country’s number of international migrants, mainly Afghan refugees.

In analysing the evolution of the shares of Asian global presence (Graph 3), the first thing to stand out is that it is the region that has most increased its share in the economic as well as in the military and soft dimensions. Furthermore, it has been the military and not economic dimension that has gained most (10.9 versus 5.9 points, respectively). Moreover, since 2011, shares of Asian military and soft presence, at 3.3 and 0.5 points, respectively, have been outpacing the region’s share of economic presence, which has remained stagnant (Graph 4). That is to say, the share of Asia’s global presence is currently growing thanks to the military and soft dimensions, which have not been restrained by the concurrent slowdown in Asia’s economic internationalisation.

The rise of Asia’s military presence is striking. Considering the rankings of the 15 countries that have increased their military presence since 1990 (Graph 5), there are three Asian nations within the top four (China, Japan, and India), seven in the top 10 (adding Korea, Indonesia, Pakistan and Singapore) and at positions 11 and 13 two more Asian countries, Bangladesh and Thailand. Moreover, occupying the 1st and 12th positions are the US and Australia; not Asian, but very closely involved in security dynamics throughout the region.

Comparing how Asian states are positioned within different presence rankings (Table 2), there appears to be tendency by these countries to project themselves into the military sphere. Of the 13 Asian countries under analysis, six have a military presence that is much higher than might be expected based on their levels of global presence: Bangladesh, Pakistan, Sri Lanka, Indonesia, the Philippines and India. Meanwhile, the military presence of two others, South Korea and Thailand, is moderately above their rankings of global presence, while three show a relative balance between military presence and other dimensions (China, Japan and Singapore). Only two Asian countries (Malaysia and Vietnam) show levels of military presence moderately below their global presence ranking.

The data from this latest edition of the Elcano Global Presence Index confirm the continuation of the trend in which Asian countries augment their military presence; of the three presence dimensions, this is the only area in which no Asian country has lost ground in its ranking since the previous year (Table 3). Indeed, of the 13 Asian countries included in the index this year, seven have improved their position in the military presence ranking: Malaysia, South Korea, Indonesia, Sri Lanka, Bangladesh, Pakistan and the Philippines. Of the 15 countries that have most increased their military presence in 2013-14, four were Asian: South Korea, India, Singapore and Sri Lanka.

There are two interrelated processes that explain most of the increased military presence in Asia: the normalisation of the Japan Self-Defence Forces and the modernisation of the People’s Liberation Army in China. As a result of Japan’s defeat in World War II, the country’s armed forces have undergone major constraints in their abilities to project force and to deploy troops outside Japanese territory. These limitations have gradually become milder since the early 1990s and the current government is expected to move with greater urgency in the years to come, as indicated by the National Security Strategy adopted in December 2013. The process has led Japan to become the nation that has most increased its military presence in absolute terms between 1990 and 2014, and the trend has accelerated very noticeably in recent years, in response to the modernisation of the Chinese army. China, in turn, is the 2nd-ranked country in terms of increased military presence in absolute terms since 1990, and this has triggered reactions similar to the Japanese in China’s other neighbouring countries. Such measures are understandable since Asia is a region with numerous open international conflicts while at the same time lacking effective security solutions; still, one has to wonder at the future implications of this phenomenon.

In considering Asia’s growing international military presence, there are two competing interpretations. Some call it an arms race, a dangerous process of competition that could result in a militaristic spiral of uncertain outcome. Others posit a more benign interpretation and consider the increase in Asian military presence a sign of greater commitment (by several of the region’s countries) to the maintenance of international peace, whether in the interests of advanced economic internationalisation or out of a desire to enhance their status within the international community. The data collected by the Elcano Global Presence Index for the period 1990-2014 suggest an ambivalent interpretation. At one extreme we find Bangladesh, India and Pakistan, which have dramatically increased their contribution of troops to UN peacekeeping missions while reducing or only slightly increasing their means of military projection. China and Indonesia, meanwhile, are countries that currently contribute many more international peacekeeping forces than in the past, but which have also significantly increased their capability for military projection (especially China). Elsewhere, South Korea and Japan have both increased their contributions to UN peacekeeping missions, but not nearly as much as they have augmented their means of force projection. Finally, Singapore contributes no peacekeeping troops at all, and Thailand very few, for UN missions, despite having strongly increased their means of military projection throughout the period. In other words, with few exceptions, the expansion and modernisation of the means of military projection in Asia have ranked above the commitment of these countries to participate in international peace missions.

As regards soft presence, the evolution of share by region (Graph 6) has been much smoother than in the cases of economic and military presence. Hence, although Asia has increased its share of soft presence overall, it accounts for only 2.8 points. The country that has most increased its share of soft presence worldwide between 1990 and 2014 is China, with 2.8 points; South Korea ranks in 7th place with 0.8 points; and three other Asian countries fall within the first 15 positions: Singapore, Thailand and Vietnam (Graph 7).

Observing the absolute variations of soft presence for the past year (Graph 8), three Asian countries are among the top 10: Japan, China and Thailand, with Japan and Thailand increasing their shares over the previous year by one tenth of a percent. China and Thailand were both ranked in this group by the previous edition of Elcano Global Presence Index. Japan, due to sharp cuts to its international cooperation budget, was the only Asian country to show an absolute decline in international soft presence between 2012 and 2013; but the trend has been reversed and it is precisely the strengthening of development cooperation that explains most of the country’s subsequent growth in soft presence between 2013 and 2014.

By identifying the variables underlying the rise of the soft presence of Asian countries, it can be seen that tourism is as a near-constant in the countries that have increased their share. Moreover, the South-East Asian countries (excepting Singapore and Malaysia) can be said to be almost exclusively responsible for the increase in the continent’s overall soft presence. In countries such as China, South Korea and India, plus Singapore and Malaysia, tourism does not have an especially strong impact or its soft presence is complemented by other variables including science, culture and education. Also striking is that, with the exception of India, South Asia generally shows a stagnant or declining share of soft presence, because these countries have not boosted tourism like their South-East Asian neighbours and because they have considerably lower levels of socioeconomic development, which hampers the positive development of other variables.

Conclusions

It is clear that the growing internationalisation of Asia goes beyond China and the economic sphere, the manifestations of the booming Asian presence with which we are most familiar. However, while China does account for an increasing percentage of Asia’s global presence, the share of Asia’s economic presence has stalled since 2011, helping the military and soft dimensions to become the two main sources of its growing share in global presence.

Mario Esteban
Senior Analyst, Elcano Royal Institute
| @wizma9


1 This phenomenon has been recently addressed using data from previous editions of the Elcano Global Presence Index. See Mario Esteban (2014), ‘The Rise of China and Asia: What the Elcano Global Presence Index Tells Us’, ARI, nr 21/2014, Elcano Royal Institute; and Mario Esteban (2014), ‘La globalización de Asia según el Índice Elcano de Presencia Global’, Comentario Elcano, nr 34/2014, Elcano Royal Institute.

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<![CDATA[ Foreign policy and global presence: the strategies of Australia and South Africa ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari7-2016-garciacalvo-foreign-policy-global-presence-strategies-australia-south-africa 2016-01-20T05:46:40Z

This ARI examines the insertion in the globalisation process of Australia and South Africa in terms of global presence in order to determine whether they match the model outlined in their strategic foreign policy documents.

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Original version in Spanish: Política exterior y presencia global: las estrategias de Australia y Sudáfrica

Theme

This ARI examines the insertion in the globalisation process of Australia and South Africa in terms of global presence in order to determine whether they match the model outlined in their strategic foreign policy documents.

Summary

Are national foreign-policy strategies effectively defining the national interest in countries far from their own borders? Do the objectives sketched out in national strategic documents evolve in accordance with these foreign-policy profiles? To answer these and other questions, we shall analyse the external projection (as it relates to documents of strategic reference) of two countries confrontingglobalization in different ways: Australia, a middle power, and the Republic of South Africa, an emerging country. The analysis of the Australian case exposes an external insertion based on the economic dimension, with primary and energy goods prominent, which follows the path marked by its strategic documents. South Africa, meanwhile, considers the exercise of regional leadership as the foundation of its influence in the international order but, in terms of global presence, it might seem that Nigeria would have taken the leading position due to the growth experienced in recent years.

Analysis

Across the four corners of the world, many are the nations that have had to reflect on their current role in the complex international scenario defined by globalisation, identifying both risks and opportunities while addressing their own national interests. Some countries have risen to this challenge by collecting into strategic documents or white papers a series of actions and goals to be achieved, in order to optimise their position on the global stage. Such exercises in planning can help not only to better understand the continuous transformations at play in the international arena, but can also contribute to a more transparent, inclusive and predictable foreign-policy.1

The Elcano Global Presence Index is not merely a useful tool for decoding the globalisation process, its evolution and its tendencies; the index is also an effective, significant foreign-policy instrument. By determining the global presence of the 80 countries examined in the index –using the three broad dimensions and the multiple variables on which they are based– we can verify how a country (or group of countries) is managing to conform its external projection, whether via soft dimension variables (science, development cooperation, tourism) or via hard dimensions (economic or military, including energy, investments, military equipment, etc). The profiles for global presence are like X-ray photos, allowing us to capture the nature of a nation’s external projection, its strengths and weaknesses, detailing the different ways that countries regard globalisation and their potential role in it, their methods of maximising the opportunities it represents in order to gain international influence or to fulfil their own national agendas.

Towards a prosperous Australia: the ‘competitive liberalisation’ of the markets

The philosophical and practical principles guiding the strategy for Australian Foreign Policy and Trade were collected for the first time in 1997, in a document titled ‘In the National Interest’.2 The document was revised once in 2003 and re-published under the title ‘Advancing the National Interest: Australia’s Foreign and Trade Policy White Paper’, and though a great number of strategic documents have been published since then they deal mostly in sectoral terms and provide a much less panoramic view.

In the White Paper the country defines itself as a medium-sized power operating within globalisation, a phenomenon that Australia regards in unquestioningly optimistic terms as an opportunity in ‘times of uncertainty’ which can yield substantial profits to all countries. The document goes on to define Australia as a ‘liberal democracy proud of its commitment to the values of political and economic liberty’ –values that have strengthened the nation’s international position–. As a country with a multicultural society, whose origin and history have been based on immigration, Australia is accustomed to looking beyond its own borders. At the same time, being located in the Asia-Pacific region, Australia is an insular and Western state with strong social, economic and cultural links to the US and Europe. The country’s national interest is summarised as ‘the security and prosperity of Australia and Australians’.

The strategic goals of Australia’s international insertion are essentially conducted through economic integration. Hence the document proposes an ambitious commercial agenda of ‘competitive liberalisation’ of the markets, using ‘bilateral and multilateral channels’ to face the competitiveness embodied by expanding markets and emerging economies, and dealing not only in terms of agricultural products and textiles but also the increasing availability of manufactured goods. Consequently, Australia has planned for genuine economic integration via exports of primary goods (agricultural, mining, wine), manufactures and services (for example, related to its nascent automobile sector), and energy, along with financial investments.3

Within the soft dimension, the vast potential of the country’s multicultural society is emphasized for encouraging “the interpersonal relationships contributing to our international status”4, another principal strategic goal. In this sense, in addition to Australian citizens living within the country, one considers also those born or living abroad, as well as the considerable number of foreign students living in Australia plus, of course, tourism. The intention here is to project an image of a successful and sophisticated country grounded on scientific and technological knowledge and sports achievements. Australian development aid is also part of the soft agenda given the ‘moral duty to eradicate poverty’, although such aid primarily focuses on good governance in the region.

Concerning security, Australia presents in its Strategic Plan a solid commitment to the war against terrorism encouraged by the US following the 9/11 attacks in New York and Washington DC.5

Has the nature of Australian external projection progressed according to these strategic positions?

In 2005, two years after the approval of its White Paper, Australia was ranked 12th among the 80 countries now included in the Elcano Global Presence Index. Its profile was at that time built upon the soft dimension (representing 55.4% of its total global presence), followed by its economic (43.9%) and military presences (2%). Five years later, in 2010, Australia maintained the same position, although the economic variable increased its weight by 3.7 percentage points at the expense of the soft variables and the military, which fell by 3.2 and 0.5 points, respectively. In the latest index (2014), the country dropped one position to 13th, reinforcing an observed tendency towards an economy-based external projection profile (Graph 1). For the first time, Australia’s economic dimension exceeded its soft dimension, rising to account for more than half of all the nation’s global presence (at 56.3%, to be precise). The contributions related to the military presence continued to decrease, indicating that Australian involvement in the war against global terrorism is not reflected in terms of its global presence.

This turn towards the economic is also evident when analysing the index value (Graph 2). Departing from similar values in 2005 (economic and soft presence indexed at 93.8 and 97.0 points, respectively), the progress in the economic area is remarkable throughout the next 10 years, and by 2014 it had risen to over 228, gaining 134.4 points while the soft variable gained only 48.2). The largest expansion of economic variables occurred during the five-year period from 2010 to 2014, when it outpaced the soft variables set by 68.5 points.

Finally, in terms of Australia’s presence within the global scenario, which is to say in direct competition with the other 79 countries included in this index, the share of its economic presence increased from 1.8% to 2.2% between 2005 and 2010. This in a context of general expansion of globalisation, chiefly economic, where emerging economies managed to seize positions previously occupied by the traditional, post-industrial powers (the model here being the case of China).

Regarding the variables that most define the Australian profile beyond its borders, in 2005 they were basically four: education (with a 17.5% contribution), primary goods (17.3%), sports (15.3%) and energy (11.9%). All of these factors became increasingly important between 2005 and 2014, although their individual evolutions were distinct. In 2010, the soft dimension variables experienced a slight increase (education to 17.7%) or decrease (sports to 12.6%), while both economic dimensions rose: primary goods to 18.8% and energy to 13.85%. The trend continued into 2014, when primary goods became consolidated as the leading variable with a relative weight of 27% (Graph 3). Immediately behind this were energy resource exports (at 15%) and, with a drop of 4.5 percentage points since 2005, education (at 13%). Among the variables included in the ‘other’ category, the most outstanding were portions of the service sector, practically constant through the 10-year period, and aid cooperation, increasing by a total of 1.6 points.

In summary, in-depth variable analysis shows an external insertion based on primary goods exports (essentially agricultural products, a strategic sector for this continent/country) and energy resources (also key to Australia’s relationships within the Asia-Pacific region, its primary area of influence). Attracting more international students to Australia, as a way of establishing bonds with foreign countries, also counts among the country’s greatest strengths. In this regard, although Australia’s weight in global presence terms of education has lately declined, one must bear in mind its exceptional ‘starting point’ in 2005, along with the outstanding rise of other economic variables supporting the national strategic goals identified by the White Paper.

Thus our analysis of the index variables on Australian global presence and their evolution since 2005 leads us to conclude that the country has indeed continued on the path laid out by its own strategic foreign-policy document of 2003, combining the dual aspirations of strong international projection and a more prosperous and secure nation.

The South African case: can regional leadership lead to a stronger global influence?

The year 2005 was a turning point for the Republic of South Africa, marking ‘the beginning of a second decade under democracy, coinciding with the 50th Anniversary of the proclamation of the Freedom Charter by the People’s Congress’, as stated in the country’s strategic foreign-policy plan for 2005-086 addressing the national vision and goals for the medium term. Revealing a strong inclination to place South Africa in a regional leadership position, with a commitment to the African continent, the country’s foreign-policy strategy was assembled around the ‘building of a new Africa in which peace and security will endure, moving deeper into democracy and prosperity so the quality of life for African people will keep continuously improving’.7

When in 2009 the Ministry of Foreign Affairs changed its name to the Department of International Relations and Cooperation (DIRC), this was a strategic move, largely intended to connect the country’s national project with what was currently happening in the region around South Africa. A period of reconsideration began, culminating with the composition of a reference document regarding external action: a White Paper under the title of ‘Building a Better World: The Diplomacy of Ubuntu’,8 approved by the cabinet and now under parliamentary consideration.

The document reaffirms the basic principles guiding the South African spirit that was expressed in 2005, focusing on respect for other nations, people and cultures (‘the Diplomacy of Ubuntu’) and on South-South cooperation, in contrast to colonialism. South Africa’s ultimate goal was none other than to prepare the country ‘to become a winning nation in the coming decades of the 21st century’.9 Consequently, the national interest was closely related to the ‘stability, unity and prosperity of Africa’, specifying that ‘South Africa’s future global and continental standing will be determined by how South Africa remains true to its enduring values, economic success, and the continued leadership role on the continent’.10 Clearly, such regional leadership is defined as a major strategic goal from which to achieve stronger influence within the global order.

South Africa’s self-image in 2005 was that of an influential country within the African continental context, but with an international scope, supported broadly by its principles and values and a competitive, sustainable global economy.11 Therefore, the country’s economic diplomacy should lead the government and other agents for external action to try and bring down trade barriers for South African products, to identify and open new markets and to attract investments and tourism. All this, of course, further implies improvements in the competitiveness of national goods and services, while at the same time South Africa’s reputation as a responsible and stable supplier was to remain as before. In order to accomplish these targets, some strategic movements have been established which could be roughly summarised as integration (and diversification) in global markets, supporting the country’s exports of natural resources, the creation of a more productive business setting, innovation for new market opportunities and the implementation of measures to attract tourism.12

South African regional leadership in terms of global presence?

South Africa considers its own regional leadership as a solid base for becoming a global influence. However, in considering global presence rankings, the better-positioned country within the Sub-Saharan African region (including Angola and Sudan) is not South Africa but Nigeria, which has climbed 13 positions to number 36 (since the first index, estimated for 1990). For its part, South Africa is now ranked two positions below Nigeria, in 38th place (Table 1), while its improvement within the index has been well below Nigeria’s, having risen only four positions since 1990. Angola and Sudan appear much further down the list, in the second half of the table, positioned at numbers 54 and 77, respectively.

Considering the presence by dimensions of these two regional leaders in the context of the index, South Africa tops the soft presence ranking, but is surpassed by Nigeria in both the economic and military dimensions. Still, regardless of whether Nigeria has changed its position in the economic rank, South Africa has fallen 14 positions in this area since 1990. Meanwhile, the opposite has occurred in terms of the soft dimension: South Africa has climbed 11 positions, while Nigeria has dropped 10 in the ranking. As for military presence, both African countries have shown an improvement in their positions since the early 1990s.

On the basis of these global presence rankings, Nigeria and not South Africa is currently in the regional leadership position. However, through in-depth analysis of the nature of the countries’ external projection –of the global presence variables and dimensions and how they interrelate– a slightly different interpretation can be made.

The external projection of the four countries of the Sub-Saharan area included in this index rest mainly upon the economic dimension (Table 2): Angola (with an economic weight of 95.6% over its total global presence), Nigeria (at 84.1%) and Sudan (at 60.3%) are all well ahead of South Africa (51%) in this regard. In terms of the soft and military dimensions, South Africa’s percentages are 47.1% and 1.9%, respectively, compared with Nigeria’s 13.3% (soft dimension) and 2.6% (military). Thus, Nigeria’s global presence is very largely based on the economic dimension.

Furthermore, concerning the variables, the ranking shows that Nigeria’s global presence (Graph 4) relies overwhelmingly on energy resources (at 79% of its total global presence), with the next most important variable being culture (at only 5%). On the other hand, in the case of South Africa the variables supporting the nation’s international projection are much more dispersed, being chiefly primary goods, education and tourism but with another 13 variables together representing a significant total of 28%. Thus, the country’s profile is much more diversified than Nigeria’s, making South Africa not only less dependent on fluctuations in international energy prices but also recalling its stated national project vis-à-vis the global order. The country is placing emphasis on developing the different strategic sectors identified in its White Paper, from exports of primary goods to its ability to attract tourism, as the bases for regional and, ultimately, global projection.

Nigeria stands out from the rest of Sub-Saharan Africa due to its improved global presence results. But a detailed analysis of the nature of the international projection of both Nigeria and South Africa, the two regional leaders, shows how South African influence, being based on diversity, constitutes a more solid and sustainable projection. Indeed, this is an international projection and a strategic incorporation firmly connected to the globalisation process, not only through the economic dimension but also through other factors including the attraction of international students, tourism and sports. All of these are soft variables, indicating a sophisticated pattern more suitable to the ever-growing complexity of the international relations scenario in effect since the end of the Cold War.

Conclusions

As we have seen, the Elcano Global Presence Index is a useful tool to analyse the foreign policy of countries for which it is calculated. Are a country’s current foreign policies coping with weaknesses in that nation’s external projection? Are countries fully exploiting their potential? In the case of Australia, the connection is evident: the shift towards an international economic profile with a liberal bent, in a region –Asia-Pacific– that has become the epicentre of global economic activity, explains to some degree the fact that the economic dimension has become the dominant aspect of the country’s project in order to gain the maximum benefit from globalisation. As for South Africa, its main strength and basis for exerting regional (or even global) influence has been the relative diversification of its global presence around different economic and soft variables, which projects the country in a more complex and sophisticated way in the regional challenge with Nigeria, which bases its global presence on energy exports.

Carola García-Calvo
Analyst, Elcano Royal Institute
| @carolagc13


1 Ignacio Molina (coord.) (2014), Hacia una renovación estratégica de la política exterior española, Informe Elcano, nº 15, Real Instituto Elcano, Madrid. Both Executive Summary and Conclusions are available in English.

3 Advancing the National Interest, p. 25-30.

5 Advancing the National Interest, p. 13.

6 Advancing the National Interest, p. 13.

7 Department of Foreign Affairs, Republic of South Africa (2005), South Africa Foreign Policy Strategic Plan: 2005-2008.

8 Department of Foreign Affairs, Republic of South Africa (2011), White Paper on South African Foreign Policy - Building a Better World: The Diplomacy of Ubuntu.

9 See Building a Better World, preamble.

10 Building a Better World, p. 3.

11 Building a Better World, p. 26.

12 Building a Better World, p. 18.

13 Building a Better World, p. 26.

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<![CDATA[ The rise of ‘Chermany’: Germany and China, the big winners in economic globalisation ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari55-2015-oteroiglesias-chermany-germany-china-big-winners-economic-globalisation 2015-10-22T02:03:58Z

This ARI compares the evolution of the global economic presence of the Big Five European economies with the emerging economies of the BRICS and the N11.

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Also available the Spanish version: Impacto ‘Chimania’: Alemania y China, las grandes ganadoras de la globalización económica

Theme

This ARI compares the evolution of the global economic presence of the Big Five European economies with the emerging economies of the BRICS and the N11.

Summary

Our data show that the European Big Five (EB5) economies have lost considerable ground in their share of world economic presence, especially vis-à-vis the BRICS, although not so much against the N11. However, within the BRICS, the big out-performer (and hence outlier) is China. Differences also exist within the EB5. Here the big champion is without a doubt Germany. In this regard, the analysis presented here shows that over the past 25 years, the two champions of global economic presence are Germany and China. The UK has also shown considerable dynamism over recent years. France, despite being generally described as stagnant, has not done too badly – certainly better than Italy and Spain, which have recently been overtaken by India.

Analysis

In the aftermath of the global financial and economic crisis (2007-09), and the subsequent European debt crisis (2009-ongoing), many scholars and pundits have claimed that Europe is inexorably in decline, and that economic and, consequently, political power is shifting from the West, especially from Europe, to the East, primarily to China.1 Others, however, have contested this analysis, pointing to the fact that Europe is still one of the most wealthy trading and investment blocs, and hence arguing that its apparent decline is overstated.2 In this ARI I will try to provide some empirical evidence to that debate.

By using the Big Five European economies (Germany, the UK, France, Italy and Spain, henceforth EB5) as a proxy for European global economic presence, I have employed the empirical data from the Elcano Global Presence Index from 1990 until 2014 to compare their performance with what are generally the groupings most cited when describing the increased global presence of emerging markets: the BRICS (Brazil, Russia, India, China and South Africa) and the Next 11 (Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam, henceforth N11).3

The data show that the EB5 economies have lost considerable ground in their share of world economic presence. Nonetheless, when we desegregate the data, we discover a number of peculiarities. The BRICS have closed the gap with the EB5 much more than the N11 have done, making the BRICS more interesting to analyse. Furthermore, within the BRICS, the out-performer (and hence outlier) is China; thus it could be argued that the rise of the rest might be better described as the rise of China. Interestingly, in recent years India has also performed well, and it could potentially become the new star of the BRICS. Russia, by contrast, has reached a plateau and might even reverse its gains.

Differences also exist within the EB5. Here the out-performer is without a doubt Germany. In this regard, the analysis presented here shows that over the past 25 years, the two champions of global economic presence within the EB5 and the BRICS are Germany and China, respectively. The complementarities of their economies have certainly helped to enhance their performance, which explains why their political leaders have recently invested so much political capital in strengthening their bilateral relationship.4 China and Germany feed each other in economic presence.

Within the EB5, the UK has also shown considerable dynamism over recent years, and it is (after Germany) the 2nd best performer in the group. Despite being generally described as stagnant, France has not done too badly – certainly better than Italy and Spain, which have recently been overtaken by India. Within the BRICS, the laggards are Brazil and South Africa, and especially the latter, which has barely increased its global economic presence over the past quarter of a century.

Europe down, BRICS up, and N11 square

When observing Graphs 1 and 2, one can see that the EB5 have lost ground both in general global presence and, specifically, in global economic presence. Not surprisingly, this loss of share has been more pronounced in the economic field, where both the BRICS and the N11 are strongest, since roughly 60% of their global presence relies on this indicator (see Graph 3 on the contribution of economic presence in overall presence). While in 1990 the share of general global presence of the EB5 was 24.2%, by 2014 it had decreased to 20.8%. This drop was even starker in economic presence, with the share falling 9 points from 26.9 to 17.9%.

Graph 1: Global presence shares 
(1990-2014)

Graph 2 also shows that the BRICS have over the past few years caught up much more forcefully with the EB5 than has the N11. While the BRICS went from a share of 6.1% in 1990 to 14.7% in 2014, the N11 increased only from 6.6% (a higher share than the BRICS at that time) to 8%. This may explain why since the term was coined, the concept of the N11 has drawn much less attention than that of the BRICS. Table 1, which shows changes in position within the economic presence ranking, helps us to understand this circumstance. Here one can see how, of the N11 countries, only South Korea and Turkey have moved up the ranks, with the former doing considerably better than anyone else in the grouping. This comes as no surprise. Over the past 25 years, South Korea has moved from a low-middle income to a high income country, with a highly competitive and globalised economy.5 By contrast, countries such as Iran, Egypt, Pakistan and even the Philippines have disappointed in this field. Finally, countries with large populations and therefore with enormous potential, such as Nigeria and Mexico, have merely maintained their positions (despite the former being a big energy exporter and the latter a manufacturing powerhouse).

Graph 2: Economic presence 
shares (1990-2014)

Graph 3: Contributions of 
economic presence (1990-2014)

The EB5 economies have all lost positions, although some more than others. Germany and the UK have only lost one position each, showing that their economies are still resilient to the competition coming from the global south and east. Still, it must be highlighted that Germany is doing better than the UK; in 2000 the UK was the 2nd global economic actor, and now it is the 5th, while Germany has maintained its 3rd position.6 France, for its part, has not lost as much ground as one might expect (it has lost three positions), demonstrating that it remains economically powerful. Certainly more so than Spain or Italy, which have lost six and five positions, respectively.

The data therefore show that the EB5 are in decline, but that the UK and Germany are holding their ground vis-à-vis the BRICS. More worrying is the performance of Italy and Spain, which need to undertake considerable reforms (reindustrialisation, further internationalisation, and more investment in education and high tech sectors) if they want to retain both their relatively high living standards and their global economic presence. To achieve this, they will need to resist the increasing competition coming from the best performers within the BRICS group, above all from China, which has climbed 15 positions since 1990 and is now the 2nd performer in terms of global economic presence after the US. Interestingly, despite its outstanding performance, China has climbed fewer positions than India, which has moved all the way from rank 39 to 1. This is significant because by focusing on China, we often forget India’s tremendous achievements.

EB5 still dominant in services and investments

Since our data divide the global economic presence of the different countries and groupings into five sectors (energy, primary goods, manufactures, services and investments), the next step is to undertake analysis in those sectors in which the BRICS and the N11 gain more ground (see Graphs 4 to 8). Here the empirical evidence reinforces the general trend explained above. The N11 grouping has under-performed compared to the BRICS in all five economic indicators. So for now, the real competitors for the EB5 remain the countries that comprise the BRICS.

Specifically, where the BRICS (and also the N11) do outperform the EB5 is in the field of energy. This is a structural factor that will be difficult to change in the short term, although the focus on renewable energy and shale gas might bring some changes in the long term. Energy is also a field that is highly volatile and dependent on the price of oil and gas. In this regard, the recent fall in the price of oil might reduce the global economic presence of the BRICS, especially considering that energy represents the highest single contribution (19%) to their total global presence.

Graph 4: Energy presence 
(1990-2014, in index value)

Graph 5: Primary goods presence 
(1990-2014, in index value)

Graph 6: Manufactures presence 
(1990-2014, in index value)

Graph 7: Services presence 
(1990-2014, in index value)

Graph 8: Investments presence 
(1990-2014, in index value)

When it comes to primary goods and manufactures, the EB5 remains on top of the three groupings, holding its ground in primary goods while gradually losing the race in manufactures. If the trend continues, it is very likely that in future years the BRICS will surpass the EB5 in manufacturing presence, despite all the rhetoric in Europe about reindustrialising the economy. Leaders in the UK, France, Italy and Spain have lately argued that one of their priorities is to revamp their manufacturing sectors, following the German example, but so far the effects have been minor.

Where the EB5 countries remain strong is in services and foreign investment. In these fields, not only have they not lost ground against the BRICS and the N11, they have expanded it, especially in the area of investments. Given that these sectors are larger in monetary volume and more attractive as regards added-value, and therefore offer higher margins, the decline of the EB5 vis-à-vis the BRICS might be less than commonly assumed. Europe remains a giant in services and investment. Of course, this does mean that a lot of European investment flows out of the continent, which explains why investment levels in Europe have dropped so much in recent times.

‘Chermany’ on the rise

However, looking just at the EB5 and the BRICS as groupings can be deceptive, because there might be considerable differences between the countries forming one or both of the groups, or even between countries across the two groups. To understand the trends in greater detail it is therefore necessary to analyse the performance of every single country – first overall in the global economic presence index, and then in each of the five economic sectors presented above. This is shown in Graphs 9 to 14 for the five countries that form the EB5 and the BRICS. The same could also be done for the N11, but due to space constraints such analysis will not be done in the present report.

Graph 9: Economic presence 
(1990-2014, in index value)

Graph 9 is perhaps the most illustrative because it shows how the two biggest world exporters are Germany and China; in other words, ‘Chermany’7 have out-performed everyone else. This is a joint success because they have each fed the other’s economies over the years. Germany is the European country that has invested most in China, thus helping it to develop rapidly. This has made China a manufacturing powerhouse (see Graph 12) on the basis of German engineering. Especially during the global and European financial crises, Germany has benefited greatly from the growth of China. German machines are used not only for manufacturing, but are also essential to China’s real estate and infrastructure sectors.

Graph 10: Energy presence 
(1990-2014, in index value)

Graph 11: Primary goods presence
 (1990-2014, in index value)

Graph 12: Manufactures presence 
(1990-2014, in index value)

Graph 13: Services presence 
(1990-2014, in index value)

Graph 14: Investments presence 
(1990-2014, in index value)

On top of this, the newly emerging middle classes of China are particularly keen on German luxury cars, sales of which have skyrocketed over the past few years. On the other hand, Germany has also benefitted from cheap manufactured products from China, which have kept the purchasing power of the German population high. Thus, the interdependence between China and Germany is extremely strong. It remains to be seen whether this trend will continue. What is clear is that on the basis of this robust economic relationship, Berlin and Beijing have strengthened their political partnership to such an extent that the German chancellor visits the capital of China at least once a year.8

After China and Germany, the next countries with the greatest economic presence are Russia and the UK, followed by France. As can be seen in Graph 10, Russia draws most of its strength from the energy sector, which means that the recent fall in oil prices will hit that country twice in the coming years. Falling prices will reduce Russia’s global economic presence in energy as well as in other variables, such as investments. If one wants to see the positive side, the fall in oil and gas prices might conceivably force the Kremlin to diversify its economy, which could increase Russia´s manufacturing sector; but so far this is merely a hope, rather than a well planned-out strategy.

The UK retains a lot of its presence thanks to services and investments (see Graphs 13 and 14), where it outperforms everyone else. The City of London, of course, remains an important asset with a tremendous global footprint. Where the UK has remained stagnant is in manufacturing – but so has everyone else, with the exception of the ‘Chermany’ tandem (see Graph 12). The UK experienced a notable jump in the export of primary goods from 2013 to 2014 (see Graph 11), but this appears to be mainly due to a one-off trend. Recently, a lot of gold stock has been shipped from the UK (especially from London) to Asia (particularly to India and China) via Switzerland, which has great refining capacity. In the primary goods sector, Brazil performs particularly well due to its agricultural products, but so does Germany, which exports far more primary goods than is normally assumed (especially copper and aluminium items such as tubes, but also processed food).

Italy and Spain sliding down

These data also show in more detail the weaknesses of Italy and Spain, which in recent years have been overtaken not only by the first two BRICS (China and Russia) but also by a third, India (see Graph 8). The rise of the other big Asian giant, with more than 1 billion people, can be explained by its minor advances in the export of energy and especially by its progress in the export of primary products and services (Graphs 12 and 13). It is well known that India excels in information technology, but it is also strong in various consultancy and advisory sectors, from call centres to medical treatment to educational support. Brazil, on the other hand, has very little to show in the way of services, and its manufacturing sector has declined. This might relate to the fact that Brazil has in recent years undergone a deindustrialisation phase, not least because of fierce competition from China.

The weaknesses of Italy and Spain can be located in the loss of market share in primary goods. In this regard, competition from Brazil is clearly hurting them in global presence terms. Also significant is their stagnant performances in manufacturing (although here Italy retains a higher level than Spain, explaining its greater economic presence overall) and in services (where Spain, though stronger than Italy, has just been overtaken by India). Finally, in terms of investments, Spain has reached a plateau, while Italy is about to be overtaken by China – which only 10 years ago was relatively absent from this field, behind even Brazil. Overall, Italy and Spain are performing worse than France, which is losing some ground in all sectors (except investments), but very gradually. In any case, all three Mediterranean countries –France, Italy and Spain– need to introduce a number of reforms (for example, reindustrialisation and more investments in value-added services) if they want to retain their fair share of global economic presence.

Conclusion

It is logical that big countries such as China, India or even Brazil should someday overtake the European countries, but this does not justify the stagnation that France, Italy and Spain have experienced in certain fields. Both the UK and Germany have proved that Europe can continue to be highly competitive and productive, and thus retain a good deal of market share in manufacturing, primary goods, services and investments.

Nonetheless, even if the EB5 countries were to enhance productivity, increase their dynamism, and accelerate their growth rates, the structural trend shows that global economic presence is gradually moving eastward.9 India and China have closed the gap over the past 25 years, and it is very likely that they will continue to do so. This, of course, means that if the EB5 countries want to continue to shape the norms and rules in the field of global economic governance, they will have to coordinate their positions much more and act in unison within the EU structures.

In this regard, it is worrying to hear an ever-greater number of voices from the best performing countries (the UK and Germany, but also France), calling for a renationalisation of their economies; in the UK there is even talk of leaving the EU (the so-called Brexit). Although these three countries still have a lot of global economic presence, and global presence overall (including military and soft), they will become mid-sized economies unable to compete with the US, China or India unless they join efforts. If they do not, their global economic footprint will only diminish faster.

Miguel Otero-Iglesias
Senior Analyst in International Political Economy at the Elcano Royal Institute
| @miotei


1 See Kishore Mahbubani (2008), The New Asian Hemisphere: The Irresistible Power Shift to the East, Public Affairs, New York; and Danny Quah (2011), ‘The Global Economy’s Shifting Centre of Gravity’, Global Policy, vol. 2, nr 3, p. 3-9. For a review of the literature see Michael Cox (2012), ‘Power Shifts, Economic Change and the Decline of the West’, International Relations, vol. 26, nr 4, p. 369-388.

2 Andrew Moravcsik (2013), ‘Why Europe is the other Superpower in the 21st Century (and China is Not)’, paper presented at Johns Hopkins School of Advanced International Studies, Baltimore, 6/IX/2013.

3 Both concepts, the BRIC and the N11, were coined by Jim O’Neill, the chief economist at Goldman Sachs, in 2001 and 2005, respectively.

4 Hans Kundnani & Jonas Parello-Plesner (2012), ‘China and Germany: Why the Emerging Special Relationship Matters for Europe’, Policy Brief ECFR 55, ECFR, May.

5 Oh-Seok Hyun (2012), ‘South Korea miracle sets shining example’, The National, 14/VI/2012.

6 Despite the fact that the UK has surpassed Germany in global presence, as shown in Iliana Olivié & Manuel Gracia (2015), Elcano Global Presence Index 2015, Elcano Royal Institute.

7 This concept was first used by Martin Wolf (2010), ‘China and Germany unite to impose global deflation’, Financial Times, 16/III/2010.

8 Hans Kundnani (2015), The Paradox of German Power, Oxford, Oxford University Press.

9 As pointed out in Iliana Olivié & Manuel Gracia (2013), Elcano Global Presence Index 2012, Elcano Royal Institute.

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<![CDATA[ From Seville to Brussels: the architecture of global presence ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari51-2015-olivie-gracia-from-seville-to-brussels-the-architecture-of-global-presence 2015-10-09T04:49:09Z

The purpose of this paper is to understand the global-local link in the external projection of countries. It breaks down the Elcano Global Presence Index by geographical origin for both the European Union (into member states) and for one particular European country, namely Spain.

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Also available the Spanish version: De Sevilla a Bruselas: la arquitectura de la presencia global.

Topic

The purpose of this paper is to understand the global-local link in the external projection of countries. It breaks down the Elcano Global Presence Index by geographical origin for both the European Union (into member states) and for one particular European country, namely Spain.

Abstract

Previous analyses by the Elcano Royal Institute emphasise the link between the domestic sphere of a country’s economic, political and social systems and its international projection, as well as the relationship between internal and foreign policies. One way to assess the extent and shape of this complex link is by means of the Elcano Global Presence Index. The index value of the European Union can be disaggregated into economic, military and soft dimensions and variables or from a geographical focus, taking into account the relative contribution of each member state to the Union’s total projection. As for member states, their global presence is the result of the external projection of their regions and communities.

Analysis

In this edition, as in previous ones, the European Union remains the political unit with the highest global presence. The total external projection of European Union member states outside the Union’s boundaries amounts to 1,214.9 in 2014 (Graph 1). By this measure, the European Union has recorded a decrease (of 4.9 points) in global presence over the past year, as its global presence index amounted to 1,222.3 in 2013. This 0.3% decrease might not seem especially significant, but it is in fact the third sharpest drop recorded by any country or territory during the past year. Iran tops this particular ranking with a 6.7 point decrease, followed by Libya, which records a 6.4 point drop (Graph 3).

Graph 1. 2014 Global presence top 20 (including EU and excluding 
its member states)

Graph 2. Major positive global presence variations  2013-2014 
(including EU and excluding its member states)

Graph 3. Negative global presence variations  2013-2014 (including
 EU and excluding its member states)

This trend contrasts with that of other countries, including the United States (whose global presence increased by 39.5 points between 2013 and 2014), China (rising 22.1 points) and other emerging economies and middle-sized or regional powers such as the United Arab Emirates (15.7 points), India (13.6), Russia (4.9), Vietnam (3.6) and Saudi Arabia (3.0) (Graph 2). The global presence gap between the European Union and the United States has decreased from 162.2 points in 2013 to 118.0. This is due to a large extent to dollar-euro exchange rate variations, with the euro recording a lower value in 2013 with respect to 2012. This movement has a negative impact on Eurozone countries as well as on countries with national currencies pegged to the euro. However, it should be noted that the European Union is the territory that has recorded the highest increase of total global presence since 2005, the first year for which we calculate European external projection. During the 2005-14 period, the European Union’s global presence has increased by 457 points, compared with 314 points in the case of the United States and 213 for China (Graph 4).

 

Graph 4. Major variations of global presence variations  2005-2014
 (including EU and excluding its member states)

As for the features of the European Union’s global presence, as pointed out previously (Olivié et al., 2014),1 it is mostly based on the soft dimension (which accounts for 52% of its total global presence) and on economic variables (45%). Military presence accounts for less than 3% of Europe’s external projection. These figures contrast with the United States’ global presence composition; despite the decrease in military variables in the 2012-13 period, this dimension still represents over 10% of the country’s total presence. As with the European Union, the most significant dimension for the United States is soft presence, followed by economic (Graph 5).

Graph 5. US and EU 2014 global presence by dimension

How is that presence built? The relative contribution of member states to the Union’s external projection

Besides its sector composition, the European Union’s global presence can be analysed geographically. It is possible to calculate to what extent each of the 28 member states contribute to the total external projection of the whole territory. Data for 2014 show that the United Kingdom is the main contributor to Europe’s global projection, followed by Germany, France, Italy, the Netherlands and Spain. The three top countries account for over 51% of Europe’s global presence (Table 1). This ranking has not recorded major changes over the past decade. Actually, the top nine spots in 2014 continue to be held by the same countries –in the same positions– as in 2005.

Table 1. EU 2014 global presence by member state (in%)

Although the United Kingdom has been strengthening its position since 2005, with an increase of 0.7 points in its contribution to the European Union’s global presence, other major member states record the opposite trend. Noteworthy are the two countries whose contribution decreased most in the 2005-14 period: Germany (by 1.9 points) and France (1.2) (Table 2).2

Table 2. Variations in contributions to the EU's global presence 
by member states (2005-2014, percentual points)

The ranking of economic contributions of member states to the European Union’s global presence shows a similar picture. Five big economies top the ranking: the United Kingdom (9.3% of global presence), Germany (7.8%), France (5.4%), the Netherlands (4.2%) and Italy (3.2%) (Table 3). Moreover, the first three contributors account for approximately half of the aggregated economic contribution to global presence. This might also reflect their capacity to reorient their exports outside the European Union in a period of financial and economic crisis.

Table 3. Economic contributions of member states to the EU's 2014 
global presence (in %)

However, the evolution of economic contributions to global presence has been different from that of global contributions. First, most countries have increased their economic contribution to global presence –meaning an increased importance of the economic dimension in the external projection of the European Union–. In fact, all member states but Finland have increased their contribution in the 2005-14 period (Table 4). Secondly, the most important variations are those of bigger –economically, demographically– member states. The United Kingdom, Spain, Germany, the Netherlands and Ireland top that ranking (Table 5).

Table 4. Variations in economic contributionsby member states to 
the EU's global presence (2005-2014, percentual points)

Military contributions reflect a similar picture. France (with a military contribution of 0.7% of the European Union’s global presence), the United Kingdom (0.6%), Italy (0.4%), Germany (0.3%) and Spain (0.2%) top the ranking. As usual, the military dimension shows a higher degree of concentration in a few member states. France, the United Kingdom and Italy account for 1.7% of the aggregated 2.7% military contribution by all 28 member states to the European Union’s total external projection (Table 5).

Table 5. Military contributions of member states to the EU's 2014 
global presence (in%)

Again, the soft dimension ranking shows a strong parallelism with both global and economic contributions to the European Union’s global presence. The top four countries are the same. The United Kingdom’s soft dimension accounts for 9.9% of total European Union’s external projection. Germany is in second place (8.8%), followed by France (8.5%) and Italy (3.9%). Spain is fifth. It should be noted that Spain is the eighth global contributor to the European Union’s global presence index (Table 1), reflecting the country’s soft profile –a feature that has been highlighted in previous reports (Olivié et al., 2013 and 2014)–. Again, the top three countries account for over half the contributions of all member states (Table 6).

Table 6. Soft contributions of member states to the EU's 2014 
global presence (in %)

Table 7. Variations in soft contributions by member states to the 
EU's 2014 global presence (2005-2014 percentual points)

As a result, 49.7% of the European Union’s global presence can be ascribed to British, German and French economic and soft projection outside Europe’s borders. Therefore, these three countries are key to the European Union’s role as a global actor. The importance of these three countries is also evident in Graph 6, which plots major contributions to the European Union’s global presence by variables and by country.

Graph 6. Contributions by member states and variables to the EU's 
2014 global presence (in%)

Europe by regions: the contribution of autonomous communities to Spain’s global presence

For countries with regionally disaggregated statistical information –such as Germany, the United States, the United Kingdom and Spain– it is possible to calculate the contribution of sub-national regions (autonomous communities in the case of Spain) to the aggregate global presence of the country in question.

As shown in previous analyses (Olivié & Gracia, 2014),3 since 1990 Spain’s global presence has recorded a rapid increase in relative terms, well above that of other countries such as the United States and Portugal. However, a detailed analysis shows weaknesses and disequilibria in the features of this projection –concentration in tourism and sports, and lower contributions in technology and education to the aggregated presence–. In analysing Spain’s global presence with a geographical approach it is possible to create a regional profile of these strengths and weaknesses.

The autonomous community that contributes most to Spain’s global presence is Catalonia, with a share of almost 22%. It is followed by Madrid, Andalusia, Valencia and the Basque country. These five communities account for almost 70% of Spain’s total presence. At the other extreme, the five communities that contribute the least are the non-contiguous cities of Melilla and Ceuta as well as La Rioja, Extremadura and Navarre (Table 8).

Table 8. Ranking of contributions by autonomous communities to 
Spain's 2014 global presence (in %)

As with the global presence of countries, there seems to be a strong correlation between the size of a territory (autonomous community, country or group of countries) in geographic, demographic and/or economic terms and its capacity to project itself outside its borders. In general terms, the contribution of each autonomous community to Spain’s global presence is aligned with its contribution to total GDP (Table 8).

However, some communities are more outward-oriented, as their contribution to national global presence is higher than their share of national GDP. This is the case for Catalonia, Madrid, the Basque country, the Canary Islands, the Balearic Islands, Murcia and Cantabria. In some cases, like the Basque country, the share of global presence is only slightly higher than its share of GDP. In others, the participation in the country’s global presence almost doubles its contribution to the size of the economy. This is the case for the Canaries and Balearics –two important destinations for international tourism–.

Moreover, there is a strong concentration of Spain’s global presence in just two autonomous communities, Catalonia and Madrid. These two account for over 41% of Spain’s global presence –slightly above their participation in national GDP, which amounts to just under 38%–.

As pointed out in previous studies, the global presence index aims to reflect structural trends. In this respect, short-term elements scarcely have an impact on global presence values. This is probably why there have been no significant variations in the contributions of each autonomous community to Spain’s global presence over the 2005-13 period (Table 9). Catalonia records a small decrease (of 0.85 points) in its contribution, and Madrid a mild increase (0.63 points). Some communities have recorded more significant variations, like the Balearics (whose contribution decreases by 1.22 points) and Murcia and the Basque country (recording an opposite trend, up by 1.03 and 1.19 points, respectively).

Table 9. Variations of contributions by autonomous communities to 
Spain's 2014 global presence 2005-2014)

The strengths of Spanish global presence are the country’s exports of primary goods and its capacity to attract international tourists. This being the case, we should expect that the autonomous communities that contribute most to the country’s external projection are agricultural producers and tourist destinations. Apart from very important contributions by Catalonia and Madrid, other poles of international tourism such as Andalusia and the Balearic and Canary Islands show a significant participation in the country’s global presence. Similarly, Murcia contributes a higher proportion to global presence than to Spain’s GDP as a result of its significant production and export of primary goods (Table 8).

The distribution of Spain’s global presence in terms of both variables and autonomous communities is evidence of the low added-value of the country’s external projection. Outward direct investment channelled through Madrid explains just over 5% of aggregated presence, and the fact that the capital is located there, along with a large share of corporate headquarters, helps to explain this phenomenon. As for Catalonia, its exports of manufactures account for 2.2% of Spain’s global presence. However, the bulk of major contributions by variable and community –those that represent at least 2% of aggregate global presence– are of lower added value. Tourism to Catalonia, the Balearics, the Canaries and Andalusia account for 14% of global presence. Exports of primary goods from Andalusia and Catalonia account for 4.6% of Spain’s external projection. As for exports of services (including different levels of technological complexity) from Madrid and Catalonia, these contribute 6.1% of Spain’s total global presence (Graph 7).

Graph 6. Contributions by member states and variables to the EU's 
2014 global presence (in %)

Conclusions

The European Union is the political unit with the most global presence, despite a decline over the past year. The decrease is mainly concentrated in its economic dimension, at a time of the euro’s depreciation against the dollar.

Although the nature of the European Union’s presence is fundamentally soft, the increase in presence have been due to its economic dimension.

To determine the local-global nexus, the Union’s sectoral and geographical presence data have been broken down. The results reveal a presence supported mainly by the economic and soft dimensions of the UK, Germany and France, which also top the main individual contributions by variable. In Spain’s case, a breakdown by regions shows high contributions of Catalonia, Madrid and, to a lesser extent, Andalusia and Valencia. However, by variables, the features to highlight are the contribution of tourism presence in the Balearic and Canary Islands and the relative importance of primary exports.

Iliana Olivié
Senior analyst at the Elcano Royal Institute and coordinator of the Elcano Global Presence Index Project

Manuel Gracia
Research Assistant, Elcano Royal Institute


1 Iliana Olivié, Manuel Gracia & Carola García-Calvo (2014), Elcano Global Presence Report 2014, Elcano Royal Institute.

2 It should be noted that the significant increases recorded by Romania, Bulgaria and Croatia are due to the fact that these countries were not part of the European Union in 2005. Therefore, starting from 0 in 2005 the increase equals the index value in 2014.

3 Iliana Olivié & Manuel Gracia (2014), “La inserción exterior de España requiere una redefinición estratégica”, Estrategia Exterior Española, nr 1/2014, February.

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<![CDATA[ The rise of China and Asia: what the Elcano Global Presence Index tells us ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari21-2014-esteban-rise-of-china-asia-elcano-global-presence-index 2014-04-02T08:17:11Z

This paper uses data from the Elcano Global Presence Index to examine how Asia, and in particular China, are raising their global presence at a very swift pace.

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Also available the Spanish version: ‘El ascenso de China y Asia: ¿qué nos dice el Índice Elcano de Presencia Global?

Theme[1]: This paper uses data from the Elcano Global Presence Index to examine how Asia, and in particular China, are raising their global presence at a very swift pace.

Summary: Asia is the region of the world that has most increased its global presence, its economic presence and its soft presence between 1990 and 2012. And it has done so with a much greater intensity than other emerging regions. In Asia the most outstanding case is China, but most of the other nine Asian countries featured in the Elcano Global Presence Index have also contributed significantly. The enhanced prominence of Asia’s international presence was especially marked in the 1990s, until the Asian financial crisis of 1997, and again during the current international economic crisis. As for the type of presence, Asian countries have tended to first display a very strong and sustained growth in their share of economic and military presence, and, more recently, a more modest increase in their share of soft presence. The exception to this pattern is Japan, a post-industrial power that has recently undertaken a process of normalisation of its armed forces.

Analysis: The Elcano Global Presence Index quantifies the overseas projection of 60 countries, the world’s 49 largest economies plus 11 other countries which, while not part of that group, are members of the EU and/or the OECD. The overseas projection of these States is calculated on the basis of three dimensions: economic (energy, primary goods, manufacturing and services), military (troops and military hardware) and soft (migration, tourism, sports, culture, science, technology, education, information and development aid). In its edition released in 2012 the project included 10 Asian countries (China, Japan, South Korea, India, Singapore, Malaysia, Indonesia, Thailand, the Philippines and Pakistan), which together account for more than 88% of the region’s GDP.

China ranked second with regard to increasing its global presence in absolute terms from 1990 to 2012, and first in raising its share (3.6%). It is also the country that has most boosted its share of economic presence (4.2%) and soft presence (2.8%), and third in increasing its share of military presence (1.7%). This has taken China from 13th place to 4th in the global presence ranking, with a 5.1% share. The economic realm is not only the one in which China has most raised its presence; it is also the one in which China has accrued the largest share of presence (5.8%).

Graph 1. Change in global presence from 1990 to 2012
Change in global presence from 1990 to 2012

There is no doubt that China is the developing country with the greatest international weight. This is seen in the fact that the absolute increase in its global presence since 1990 equals that of the five countries of Latin America –or those in the Maghreb and the Middle East– with the strongest international presence. Further proof is the fact that the rise in China’s share of global presence is equal to the aggregate growth of the rest of the Asian countries included in the index, and greater than that posted by the Maghreb and Middle East (2.9%) and by Latin America (1.8%). This difference between the growth of China’s share of presence and that of the other developing countries is particularly clear in the case of soft presence. Here, China has risen 2.8%, compared with 0.1% for other developing Asian nations, 0.5% for Latin America and 0.3% for the Maghreb and Middle East.

Graph 2. Spread of global presence over the past two decades
Spread of global presence over the past two decades

What is more, except in comparison to the US, whose international presence continues to grow faster than China’s, the gap between China’s pace of increase and the rest of the traditional world powers is becoming increasingly larger. Were the trend of the past two years to continue, China would become the world number two in international presence by 2020, overtaking the UK in 2015 and Germany in 2019.

In Asia, it’s not just China
Looking at Table 1 and the variations in the top 20 spots in the index ranking, we can see that between 1990 and 2012 Asia rose by 26 places, with four countries moving ahead. Two other regions have also gone up in the ranking, but to a much lesser degree. Latin America gained four spots, thanks to Brazil, and Oceania one, due to the effect of Australia.

Table 1. The top 20 spots on the Elcano Global Presence Index of 2012 and a comparison with the rankings measured in 2011 and 1990
The top 20 spots on the Elcano Global Presence Index of 2012 and a comparison with the rankings measured in 2011 and 1990

Table 2 shows that the growth in Asia’s share of global presence (7.2%) is greater than that of the rest of the regions combined (6.2%). Even excluding China, Asia’s share grew 3.6%, double the rise of Latin America and a 0.7% of share more than the Maghreb and the Middle East. As shown in Table 3, the rise in the specific weight of the international presence of Asia was especially strong in two periods: the decade of the 1990s until the Asian financial crisis of 1997 and starting with the international crisis that erupted in 2008.

Table 2. Evolution of shares of global presence by region, 1990-2012 (%)
Evolution of shares of global presence by region, 1990-2012 (%)

Table 3 shows that the rise in Asia’s share of presence is quite constant and across-the- board. Asia posted a decline only in the economic area in the period 1995-2000 and in the soft dimension from 2010-12. The first of the decreases was the most pronounced, at 0.3%, and stemmed from the effects of the Asian financial crisis, which hit especially hard in Thailand, Indonesia, South Korea, Malaysia and the Philippines, and was also felt in China, India and Singapore. Meanwhile, the recent mild contraction in the share of soft presence of Asia is mainly due to a decrease in Japan’s development aid and science and China having done worse in the London Olympic Games than in those of Beijing.

Table 3. Average annual variation in the share of Asian presence by dimension and period, 1990-2012 (%)
Average annual variation in the share of Asian presence by dimension and period, 1990-2012 (%)

Asia, a heterogeneous region that is on the rise
The evolution of the Asian countries’ international presence is not at all uniform (Table 4) and a distinction can be made between three kinds of country depending on the trend observed in their share of global presence: rising, stable and declining. Besides China, the status of which has been discussed above, significant rises in global presence have been posted by South Korea (1.4%), Singapore (1%), India (0.8%), Thailand (0.6%), Malaysia (0.6%) and Indonesia (0.5%). After an outstanding performance in the 1990s, all of these countries suffered setbacks, or at least stagnation, in their share of global presence because of the Asian financial crisis of 1997. But they managed to get back on course as the 21st century began. The first to return to a high pace of growth in their share of global presence were the States that had been less affected by that crisis –India (2000), Singapore (2000) and South Korea (2000)– followed by the developing countries of South-East Asia –Malaysia (2005), Thailand (2010) and Indonesia (2011)–. The only country of Asia with a stable share of global presence is the Philippines, which rose only 0.1% and did so before the Asian financial crisis. In other words, unlike the other developing countries of South-East Asia that are included on the Elcano index, the Philippines failed to regain the momentum it showed before the 1997 crisis. Only two Asian countries –Japan (-1.1%) and Pakistan (-0.2 %)– have seen their global presence shares decline between 1990 and 2012. Japan’s case reflects the typical pattern of post-industrial countries that see their global presence share dragged down by a relative fall in their economic presence (-2.5%) and, to a lesser extent, their soft presence (-2.2%). In the case of Pakistan, the rise in its share of military presence (0.8%) was insufficient to offset the fall in absolute terms of its soft presence, which implies a decline of 0.5% in the overall share of soft presence. The fall in Pakistan’s soft presence stemmed from a decline in the number of foreign migrants, mainly Afghan refugees.

Table 4. Evolution of the share of the global presence of Asian countries, 1990-2012 (%)
Evolution of the share of the global presence of Asian countries, 1990-2012 (%)

The relentless increase in the internationalisation of the Asian economies
The economic realm is the one that mostly clear shows the rising international presence of Asia. It is also the one in which Asia has its greatest share of presence (Table 5). Furthermore, the region is the one to have posted the largest rise in its share of economic presence between 1990 and 2012 (7%), a percentage more than four times higher than Latin America’s (1.5%) and more than double that of the Maghreb and the Middle East (3.2%). The vast majority of the Asian countries included in the index have contributed to the rise. Japan is the only country in the region whose share of economic presence has declined over the period (-2.5%). The largest increase in the Asian countries’ share of economic presence was in the export of manufactured goods, which rose from 21% in 1990 to 26.5% in 1995 and 36.5% in 2012. What is more, this is the area of economic presence where Asian countries first started to appear among the top spots of the world ranking. Asia’s emergence as the world’s manufactory is clear if it is considered that in 2012 there were three Asian countries among the world’s top five exporters: China (1st), Japan (4th) and South Korea (5th). In 1990, there were just two Asian countries among the top 10: Japan (2nd) and South Korea (10th). Although to a somewhat lesser extent, Asian countries have also posted a significant increase in the percentage of the share of presence in primary goods and services. Asia has risen from accounting for 12% of exports of services in 1990 to 16% in 1995 and 21.5% in 1990, while its share of exports of primary goods reached 20% in 2012, rising from 16% in 1995 and 10% in 1990. The arrival of Asian countries to the top spots in exports of services took longer than it did for manufacturing: Japan (6th) was the only one in the top 10 in 1990 and in 1995 it had risen to 5th place, while Singapore made it into 10th. In 2012, there were four Asian countries among the world’s top 10 exporters of services: China (4th), Japan (6th), India (8th) and Singapore (10th). In 1995, South Korea became the first Asian country to break into the ranks of the top 10 exporters of primary goods, taking 9th place. In 2012 the trend strengthened and China took over the 8th spot while South Korea dropped to 10th. The weight of Foreign Direct Investment of Asian origin is much lower, as is the pace of its increase, going from 6% in 1990 to 8.5% in 1995 and 11% in 2012. Japan is the only Asian country that appears among the top 10 with the largest amounts of FDI overseas, although its role is diminishing. It fell from 4th place in 1990 to 5th in 1995 and finally to 6th in 2012. China and Singapore experienced a significant rise throughout the period. In 2012 they ended up 13th and 16th, respectively.

Table 5. Evolution of share of economic presence by regions, 1990-2012 (%)
Evolution of share of economic presence by regions, 1990-2012 (%)

The stunning rise in Asia’s level of economic development and its international presence in this area did not just happen by chance. One of the key factors driving it was a determined government strategy supporting investment in R+D. China, Japan, South Korea and India respectively have the world’s 2nd, 3rd, 5th and 8th largest budgets for R+D. South Korea and Japan hold 2nd and 3rd place in the world for percentage of GDP earmarked for research and development. Meanwhile China, despite being a developing country, invests in R+D a percentage of GDP (1.98%) which is greater than that of the EU (1.96%). Another reason for the successful growth of Asia’s economic presence is that its processes of economic internationalisation feature a high relative performance of exports in relation to investments. This gives rise to a series of advantages, among which are more vigorous economic activity and thus domestic employment, a balance in the current account and less exposure to country risk. It should be noted that one of the weaknesses of Spain’s production structure and of the internationalisation processes of Spanish companies is that they follow the opposite pattern, with a high relative performance of investments in relation to exports.

Asia’s international presence is not just economic
Comparing the positions of Asian countries in the ranking of global presence with their positions in the rankings for each of the three dimensions measured by the Elcano Global Presence Index (Table 6), the first thing to notice is that half of them have a significantly higher position in the military realm.

Table 6. Rankings of Asian countries in the Elcano Global Presence Index of 2012
Rankings of Asian countries in the Elcano Global Presence Index of 2012

This emphasis by Asian countries on enhancing their military presence is confirmed by the fact that this is the kind of presence in which Asia increased its share the most (8.4%) and the only one that has grown for all of the Asian countries or in all of the periods examined in the global presence project (Table 7). In fact, seven of the 11 countries that have increased their military presence the most from 1990 to 2012 are Asian. Still, the military dimension is the one in which Asia has a smaller share of presence (12.4%) due to the overwhelming US strength (55.8%).

Table 7. Variation in the share of presence of Asian countries by dimension (%)
Variation in the share of presence of Asian countries by dimension (%)

Two inter-related processes explain most of the increase in Asia’s military presence: the normalisation of Japan’s Self-Defence Forces and the modernisation of the People’s Liberation Army in China. After Japan’s defeat in World War II, its armed forces were subject to major restrictions both in terms of their ability to project force and to deploy troops outside Japanese territory. These limitations have been gradually eased since the early 1990s, and now a bill is being debated in Parliament to lift them completely and put Japan’s armed forces on a par with those of any other country. The process has led Japan to be the country that has increased its military presence the most in absolute terms from 1990 to 2012. The trend has accelerated significantly in recent years in response to the modernisation of the Chinese military, which has set off similar reactions in other countries around it. These measures are easily understood as Asia is a region with many ongoing international conflicts and without an effective security system to resolve them. In its bid to enhance its capability to defend growing interests outside its borders, Beijing has opted in a determined fashion to boost its military presence, the growth of which was the third largest, both in absolute terms and in share of presence between 1990 and 2012 (Table 8). In parallel, the conflict between India and Pakistan has triggered a significant increase in the military presence and share of military presence of both countries.

Table 8. Evolution of share of military presence by region, 1990-2012 (%)
Evolution of share of military presence by region, 1990-2012 (%)

Asia is the region of the world with the highest growth in its share of soft presence
As is the case with global presence and economic presence, Asia is the region and China the country that have most increased their share of soft presence –by 1.9% and 2.8%, respectively–. Along with China, also standing out is South Korea, which scored the fourth-highest increase in share of soft presence (1%). The pronounced increase by both countries is closely linked to their progress in science and technology, to which must be added tourism and sports in the case of China. Soft presence is the one that shows a stable pattern of share distribution by region and the one in which Asia’s increase has been the smallest. This is because it is the kind of presence that most countries take longer to develop. In any case, the increase in the weight of Asia’s projection in this area was much larger than that of the other emerging regions (Table 9). The Asian country whose soft presence took off first was Japan, which accounted for most of Asia’s rise in the 1990s and hit its peak in soft presence in 2000. The rest of the Asian countries that rose in soft presence did so mainly in the 21st century, after having scored more significant rises in their shares of economic and military presence. Examples are China, India and Malaysia. China’s share of military presence grew twice as much in the 1990s (1.2%) as it did in the first decade of this century (0.6%), while the rise in its share of soft presence followed the opposite pattern, growing 0.9% in the 90s and 1.8% the following decade. Malaysia, meanwhile, increased its share of military presence in the 1990s, but not in the ensuing 10 years, while its share of soft presence did not begin to rise until the 21st century. India, which has a lower level of socioeconomic development, saw a decline in its share of soft presence in the 1990s (-0.4%), which shifted to a very a small increase in the following decade (0.1%), while its share of military presence underwent a much more marked increase: 0.4% in the 1990s and 0.8% in the following decade.

Table 9. Evolution of shares of soft presence by region, 1990-2012 (%)
Evolution of shares of soft presence by region, 1990-2012 (%)

Conclusion: The data featured in the 2012 edition of the Elcano Global Presence Index allows us to state firmly that since the end of the Cold War we have witnessed a significant contraction in the specific weight of the global presence of the traditional powers. By far Asia is the region that has benefitted most from this redistribution of regional shares of international presence and within Asia the high profile role of China stands out. Emerging Asian powers show a pattern of foreign projection based first on economic and military variables, and more recently on soft variables. The rise of Asia was particularly intense in the 1990s, until the Asian financial crisis of 1997, and during the current international economic crisis. Still, Asia remains far behind Europe and North America except in its share of economic presence, which is greater than North America’s. It will be interesting to observe how the slowing down of several Asian economies, including China, might influence the evolution of their global presence in the next few years.

Mario Esteban
Senior Analyst for the Asia-Pacific region at the Elcano Royal Institute and Professor of East-Asian studies at the Autonomous University of Madrid


[1] The author is grateful to Iliana Olivié for her valuable observations, which have enriched this study.

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<![CDATA[ What would the ‘United States of Europe’ look like in this changing world? Reflections on the IEPG ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/ari25-2013-olivie-gracia-united-states-of-europe-estados-unidos-europa-iepg-2012 2013-06-25T09:32:01Z ARI 25/2013 - 3/7/2013


The third edition of the Elcano Global Presence Index (IEPG) is out. This year, we have also calculated the EU’s global presence –as if it were a single country– and estimated the presence of member States in the European sphere.

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Theme: The third edition of the Elcano Global Presence Index (IEPG) is out. This year, we have also calculated the EU’s global presence –as if it were a single country– and estimated the presence of member States in the European sphere.

Summary: The catching-up process of several emerging economies and the crisis in the United States and Europe have also had implications for their global presence: the IEPG shows that Western countries keep on losing positions in the global scene. However, if the European Union were to count as a single country, it would top the world in terms of global presence. The economic divergence and concentration that characterise the European Union are also apparent in terms of intra-European presence: in general terms, the old members have more ‘presence gains’ than the newcomers. Lastly, the IEPG shows that the weaknesses of Spanish external insertion call for a new foreign action strategy.

Analysis: In the last few years and, particularly, since the advent of the current crisis, studies on the swing in economic activity and world power from the Atlantic to the Pacific axis have proliferated.[1] Some analyses have debated the nature of this change of epicentre. Is it limited to the economic sphere or are there other political elements at play, such as the military or development cooperation?[2] Moreover, the shift affects the relative global presence of the old Western countries, which has become increasingly undermined. This relates to the question of whether world power is becoming multipolar –with a handful of old and new influential states– or is heading towards a 0-order in which virtually no-one –no state and no multilateral organisation– is ready or willing to rule the system (Bremmer & Gordon 2011).[3]

And this question leads to another important issue, which is the political future of the European Union.[4]Besides its impact on the stability of the common currency area, the lack of depth of economic and political integration may be having consequences on the global presence and influence of the European Union as a whole. The other side of the coin is that the European integration process, as we know it, may have heightened the economic differences between the member states.[5]In terms of intra-European presence, this might mean that the ‘presence gains’ of integration might not be evenly distributed among the member states.

The Elcano Global Presence Index (IEPG after its name in Spanish) aims to contribute to these debates by measuring global presence. We divide global presence into three dimensions: economic presence –energy, primary goods, manufactures, services, investments–, military presence –troops, military equipment– and soft presence –migrations, tourism, sports, culture, information, technology, science, education and development cooperation–. Therefore, although related, the IEPG is not a measure of global power or influence. It rather tries to show comprehensively the effective, real and objective –not perceived– presence of countries outside their borders in a wide variety of fields (Olivié & Gracia, 2013).[6]

This policy brief goes through some of the main results of the third edition of the IEPG. The 2012 IEPG shows that the ‘de-Westernisation’ process under way is becoming deeper. It also debates what the global status of the European Union would be if it were to become the ‘United States of Europe’ and how the integration process has affected its member states in terms of intra-European presence. Finally, we discuss these results for the particular case of Spain.

Shifting South and East
One way to see the IEPG ranking (Table 1) is that the 20 countries that are currently heading the list are more or less the same since the early 90s. In fact, only two countries have left the list –Austria and Mexico– while two others have come in –Brazil and Singapore–. Seven of the top 20 countries that currently comprise the ranking are developing countries and emerging economies.

However, there have been significant shifts within the top 20. China now ranks 4th and Brazil is 19th. Two emerging Asian countries, China and Singapore, have climbed up nine places. South Korea has risen five steps and India and Brazil four each. Meanwhile, Russia has lost four positions –although it should be borne in mind that the 1990 IEPG is calculated for the Soviet Union–. Belgium has dropped four also. Italy, Switzerland and Sweden have gone down three. While the United States remains the country with the highest global presence, emerging economies –particularly Asian countries– have replaced several European countries.

Moreover, this ‘de-Westernisation’ process seems to have accelerated with the economic crisis. Note that Belgium, France and Sweden have each lost one position between 2011 and 2012.

This does not mean that all European countries are being equally affected by either de-westernisation or the economic crisis. Germany and the UK have gained one and two positions respectively over the past couple of decades.

Table 1. IEPG ranking (20 top positions)

2012

2011

1990

Position

Country

IEPG

Position

D

Position

D

1

United States

1.012.3

1

=

1

=

2

Germany

390.7

2

=

3

+1

3

United Kingdom

347.5

3

=

5

+2

4

China

308.4

5

+1

13

+9

5

France

297.5

4

-1

4

-1

6

Russia

243.7

7

+1

2

-4

7

Japan

237.4

6

-1

6

-1

8

Netherlands

218.3

8

=

9

+1

9

Canada

194.1

9

=

8

-1

10

Italy

171.5

10

=

7

-3

11

Spain

162.8

11

=

10

-1

12

Saudi Arabia

152.1

15

+3

12

=

13

Australia

149.4

12

-1

14

+1

14

South Korea

146.1

13

-1

19

+5

15

Belgium

132.6

14

-1

11

-4

16

India

108.0

17

+1

20

+4

17

Singapore

106.3

16

+1

25

+9

18

Switzerland

97.0

18

=

15

-3

19

Brazil

94.2

20

+1

23

+4

20

Sweden

87.7

19

-1

17

-3

Towards a 0-order?
The United States retains its position as the country with the leading global presence, while China has seen an increase in its external projection. Does this means that we are heading towards a new bipolarity led by the United States and China? For now, and as far as global presence and the IEPG calculation are concerned, the answer is no.

The share of global presence of the United States has steadily decreased since the end of the Cold War: it has dropped from 24.1% in 1990 to 16.6% in 2012. Meanwhile, the share of China has increased dramatically during that same period, jumping from only 1.4% of total global presence to 5.1%. However, China’s growth in global presence has not been large enough to compensate the decline of the United States. This means that the sum of the shares of the two countries has decreased from 25.5% in 1990 to 21.7%.

As a result, the foreign projection of countries in a variety of areas is probably being spread amongst a larger number of nations. To test this idea, we apply the Herfindahl-Hirschman Index (HHI) –traditionally used for assessing the degree of competition or concentration between companies–[7]. It ranges from 0 –total ‘competition’ in global presence between countries– to 10,000 –a total monopoly of world global presence by a single country–. The HHI applied to the IEPG has decreased from 934 in 1990 to 524 in 2012 (Table 2). Hence, global presence is becoming increasingly dispersed amongst a larger number of countries (Graph 1).

Table 2. Herfindahl-Hirschman Index (HHI) applied to the IEPG

1990

1995

2000

2005

2010

2011

2012

934

803

803

653

599

557

524

It could be said that the international influence of states is at least partly determined by the global presence of the countries they represent. In that case, these results could add something to the parallel debate on whether power and influence are shifting to a new pole –or set of poles–, or if, to the contrary, the global scene is heading towards a certain international anarchy. In this respect, the results might be more aligned with the 0-order thesis posed by Bremmer & Gordon (2011).

Graph 1. Global presence dispersion over the past two decades

Another interesting feature of this trend towards a greater dispersion is that it has a changing pattern: in 1990-2005, global presence was diversified mainly as a result of the dispersal of economic presence. However, between 2005 and 2012, it is mostly soft presence that leads the process. There can be several explanations for this. For instance, it could be due to the Great Recession that might be hitting the economic variables harder than the soft ones. However, it might also be the result of the changing nature of the internationalisation of countries: the emerging countries might have started their processes of external insertion in the 90s through the economy but are now turning to softer ways of being present in the world.

What if there were a United States of Europe?
What if the European Union to make a qualitative leap forward towards a political union and therefore became a single country? What would its global presence be like? The European Union would be the country with the highest global presence (1,088.3 in 2012), although only just ahead of the United States of America (1,012.3). Actually, the two countries –one of them hypothetical– would have a combined share of 43.5% of total global presence. China would rank 3rd, with a presence approximately a third of that of the European Union and the United States. In general terms, there would, obviously, be a scaling-up of all emerging countries in the ranking. Among the top 20, 13 would be developing or emerging (Table 3).

Table 3. IEPG ranking (top 20 positions) including the European Union

2012

2011

2005

Position

Country

IEPG

Position

D

Position

D

1

European Union

1.088.3

1

=

2

+1

2

United States

1.012.3

2

=

1

-1

3

China

308.4

3

=

5

+2

4

Russia

243.7

5

+1

4

=

5

Japan

237.4

4

-1

3

-2

6

Canada

194.1

6

=

6

=

7

Saudi Arabia

152.1

9

+2

8

+1

8

Australia

149.4

7

-1

7

-1

9

South Korea

146.1

8

-1

9

=

10

India

108.0

10

=

14

+4

11

Singapore

106.3

11

=

13

+2

12

Switzerland

97.0

12

=

10

-2

13

Brazil

94.2

13

=

17

+4

14

United Arab Emirates

82.3

15

-1

15

+1

15

Norway

80.2

14

+1

12

-3

16

Mexico

76.2

16

=

11

-5

17

Malaysia

71.4

17

=

18

+1

18

Indonesia

63.1

19

+1

21

+3

19

Turkey

59.2

18

-1

16

-3

20

Thailand

58.3

20

=

19

-1

The European Union would have held the 1stposition since 2010, largely due to the in its economic presence. This would be the result of dynamic services exports and outward investments. Exports of manufactures and primary goods have also surged, raising the contribution of the economic dimension to the European Union’s global presence from 32% in 2005to 44.5% in 2012.

However, the European Union’s presence in the world is mostly soft. This accounts for 52% of the total IEPG. It is worth highlighting its role in sports, development cooperation, technology, science and tourism, and, to a lesser extent, migration, culture and education.

The European military presence has decreased both in absolute and relative terms, from 6% to 3.5% of its total presence between 2005 and 2012.

However, and despite its significant presence relative to other countries, the current crisis has prompted a slowdown in the IEPG-EU’s growth in several variables. In 2011, the economic presence records a slower growth, and in the case of the soft variables the trend dates back to 2010. Development cooperation drops sharply in 2012, a trend that is likely to continue and will have strong implications for Europe’s global presence.

What happens inside Europe in terms of presence?
It is also possible to analyse the relative presence of member states within the European Union. Just as the global presence in all fields can be estimated for the UK, Germany, Cyprus and Spain, several statistical sources allow the calculation of the presence of these countries in the European sphere. We have called this index the Elcano European Presence Index –IEPE, after its initials in Spanish– (Olivié & Gracia, 2013).

According to the IEPE, Germany tops the list of member states in intra-European presence (Table 4). It is followed by the UK, France and the Netherlands and all four countries have maintained these positions since 2005, the first year for which the IEPE is calculated. Spain holds the 5th position and has therefore climbed two places in the last eight years.[8]All countries in positions 19 to 27 held the same places in 2005 and 2012, as did Italy, Poland, Ireland and the Czech Republic, in addition to the top four. Hence, unlike the IEPG and although with some exceptions, there is no great variation in the presence of member states within the European space.

Table 4. IEPE ranking

2012

2005

Position

Country

IEPE

Position

D

1

Germany

706.7

1

=

2

United Kingdom

654.7

2

=

3

France

519.6

3

=

4

Netherlands

442.2

4

=

5

Spain

302.9

7

+2

6

Italy

279.9

6

=

7

Belgium

272.2

5

-2

8

Luxembourg

157.3

17

+9

9

Sweden

151.8

8

-1

10

Austria

135.9

9

-1

11

Ireland

123.8

11

=

12

Denmark

108.4

10

-2

13

Poland

100.8

13

=

14

Check Republic

82.1

14

=

15

Hungary

79.9

12

-3

16

Portugal

61.6

18

+2

17

Finland

59.6

15

-2

18

Greece

50.7

16

-2

19

Romania

35.7

19

=

20

Slovakia

35.6

20

=

21

Bulgaria

22.3

21

=

22

Lithuania

20.5

22

=

23

Slovenia

20.4

23

=

24

Estonia

14.6

24

=

25

Latvia

11.3

25

=

26

Cyprus

10.1

26

=

27

Malta

5.5

27

=

In other words, ‘presence gains’ might be related to the date of accession: the sooner countries joined the European Union, the more presence they gained within the European space, and this applies particularly to Germany. However, two countries seem to escape the trend: the UK and Spain have benefited more than proportionally from joining the European Union in terms of European presence (Table 5).

Table 5. EU accession and ‘presence gains’

EU Accession

Euro

Country

IEPE 2012

2005-12

1958

Yes

Germany

706.7

187.9

1973

 

United Kingdom

654.7

262.3

1958

Yes

France

519.6

170.7

1958

Yes

Netherlands

442.2

170.7

1986

Yes

Spain

302.9

117.4

1958

Yes

Italy

279.9

77.8

1958

Yes

Belgium

272.2

41.0

1958

Yes

Luxembourg

157.3

123.8

1995

 

Sweden

151.8

57.6

1995

Yes

Austria

135.9

47.2

1973

Yes

Ireland

123.8

59.6

1973

 

Denmark

108.4

36.3

2004

 

Poland

100.8

48.4

2004

 

Check Republic

82.1

38.8

2004

 

Hungary

79.9

17.1

1986

Yes

Portugal

61.6

29.3

1995

Yes

Finland

59.6

21.6

1981

Yes

Greece

50.7

13.0

2007

 

Romania

35.7

5.9

2004

Yes

Slovakia

35.6

17.2

2007

 

Bulgaria

22.3

5.0

2004

 

Lithuania

20.5

8.7

2004

Yes

Slovenia

20.4

10.1

2004

Yes

Estonia

14.6

5.9

2004

 

Latvia

11.3

3.9

2004

Yes

Cyprus

10.1

2.9

2004

Yes

Malta

5.5

2.3

Notes:

Is Spain’s external insertion not sufficiently strategic?
It is important not to misunderstand either the IEPG value of a specific country or how it evolves. That a country moves up does not necessarily mean that it is better off. For instance, global presence can rise as a result of the participation in a military conflict that is not being backed by the international community and this could undermine its international image and/or influence. Moreover, although they might be related, a greater presence does not automatically mean more power or influence. A country can hold a leading position in commodity exports and, at the same time, have a very low voting share in regional and international organisations.

In short, both the IEPG and the IEPE aim to show both the volume and the nature –flaws and strengths– of the global and European presence of countries. In Spain’s case, the IEPG might be revealing an external insertion that is more indiscriminate and less strategic.

Spain’s foreign policy in the last decades has been highly proactive in re-inserting the country in the international community, after the transition to democracy in the 70s. This has resulted in a dramatic increase in Spain’s IEPG in the 1990-2012 period. It has almost trebled over the period –rising from 41.8 to 162.8– whereas the United States’ and Portugal’s external presences during that same period have increased by 112% and 232%, respectively. Spanish foreign policy in the last decades has clearly been a success in the sense that it has achieved its main goal: getting the country back to the world arena. However, on the other hand, the nature of the presence might show a relatively non-strategic type of insertion, with signs of an unsustainable and imbalanced type of global presence.

Both at the global and the European level, Spain’s presence rests on its soft dimension. This could be an asset. However, the best performing variables are symptomatic of a productive model and an external insertion of low added value, conferring vulnerability to the whole country. For instance, in the economic field, internationalisation is the result of companies’ outward investments, rather than exports. As for the soft dimension, it depends to a large extent on tourism and sports, rather than on more strategic assets such as education and technology.

The current economic crisis has also made itself felt on the global presence variables: the Spanish IEPG, which grew at an annual average of 11% between 2000 and 2010 has slowed down to 6.7% between 2010-2012. Obviously, some variables have been hit harder than others. This is the case of science, development cooperation and investments (Table 6).

Table 6. Spain’s IEPG

 

1990

1995

2000

2005

2010

2011

2012

Economic presence

11.4

18.1

25.2

46.5

63.5

67.7

77.8

% IEPG

27.4

34.4

37.0

44.1

44.1

44.2

47.5

Energy

1.1

0.4

1.5

3.1

3.7

4.6

4.7

Primary goods

2.4

5.1

5.6

9.9

12.9

14.4

18.9

Manufactures

2.8

4.6

5.8

9.7

10.8

11.7

14.4

Services

4.9

7.1

9.2

16.6

21.4

21.6

24.7

Investments

0.4

0.9

3.0

7.2

14.7

15.3

15.1

               

Military presence

2.4

2.5

2.6

3.0

3.4

3.6

3.5

% IEPG

5.8

4.8

3.8

2.9

2.4

2.3

2.1

Troops

0.0

0.3

0.6

0.5

0.6

0.6

0.6

Military equipment

2.4

2.2

2.0

2.5

2.8

2.9

2.9

               

Soft presence

27.9

32.0

40.3

56.0

77.1

81.9

82.6

% IEPG

66.8

60.9

59.2

53.1

53.5

53.5

50.4

Migrations

0.8

1.0

1.7

4.4

6.1

6.1

6.1

Tourism

20.0

18.7

24.8

29.9

27.9

28.1

30.3

Sports

1.5

4.8

2.8

5.8

8.3

8.3

8.3

Culture

1.2

0.5

1.0

2.3

3.9

3.6

4.8

Information

0.0

0.0

0.1

1.0

8.6

14.5

14.5

Technology

0.7

0.8

1.1

1.1

1.5

1.5

1.5

Science

1.4

2.4

3.3

4.7

6.5

5.6

6.1

Education

0.8

1.8

3.4

1.5

4.0

4.6

4.6

Development cooperation

1.5

2.1

2.1

5.2

10.4

9.4

6.2

               

IEPG value

41.8

52.4

68.0

105.0

143.4

152.3

162.8

position

10

10

11

11

11

11

11

Conclusions: Were the European Union to take a qualitative step towards political federation, it would hold a strategic position that would probably alter the international political game and the world distribution of power and influence. However, in order to be sustainable, the trend towards a greater divergence between member States should be addressed. This particularly affects Spain, which is faced not only by the problems caused by the specific features of its presence in the European Union but also of its global presence as a whole.

Iliana Olivié, Senior Analyst for International Cooperation and Development and Coordinator of the IEPG, Elcano Royal Institute.

Manuel Gracia, Research assistant, Elcano Royal Institute.


[1] Take, for instance, the visionary work of Alice H. Amsden (2001), The Rise of ‘the Rest’: Challenges to the West from Late-Industrializing Economies, Oxford University Press.

[2] See, for instance, Andreas Fuchs & Krishna ChaitanyaVadlamannati (2012), ‘The Needy Donor: An Empirical Analysis of India’s Aid Motives’, World Development, nr 44, p. 110-128.

[3] Ian Bremmer & David Gordon (2011), ‘G-Zero’, Foreign Policy, 7/I/2011.

[4] Federico Steinberg & Ignacio Molina (2012), ‘El nuevo gobierno del euro: ideas alemanas, intereses divergentes e ideas comunes’, Revista de Economía Mundial, nr 30, p. 59-81; Benjamin Cohen (2012), ‘The Future of the Euro: Let’s Get Real’, Review of International Political Economy, vol. 19, nr 4, p. 689-700; Sebastien Dullien & José Ignacio Torreblanca (2012), ‘What is the Political Union?’, Policy Brief, nr 70, ECFR, December.

[5] Olivier Blanchard & Francesco Giavazzi (2002), ‘Current Account Deficit in the Euro Area: The End of the Feldstein-Horioka Puzzle?’, Brookings Papers on Economic Activity, nr 2, p. 147-186; Alberto Alesina & Robert Barro (2002), ‘Currency Unions’, Quarterly Journal of Economics, nr 117, p. 409-436; European Commission (2006), ‘Widening Current Account Differences within the Euro Area’, Quartely report on the euro area, Directorate General for Economic and Financial Affairs, p. 25-37; Jean Pisany-Ferry (2011), Le réveil des démons : La crise de l'euro et comment nous en sortir, Pluriel, Brussels.

[6] Iliana Olivié & Manuel Gracia (2013), ‘2012 IEPG: Methodology and New Analytic Tools’, WorkingPaper, nr 12/2013, Elcano Royal Institute, July.

[7]

[8] However, the most important change of position is that of Luxembourg, which gained nine in less than 10 years. This is mainly due to its high performance in the culture variable, which is measured with the exports of audiovisual services. It should be noted that, in this field, Luxembourg has a re-export profile. Moreover, the dramatic increase in services exports also contributed to the jump.

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<![CDATA[ IEPG 2012: methodology and new analytic tools ]]> http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/dt12-2013-olivie-gracia-iepg-metodologia-methodology-2012 2013-06-25T08:52:47Z

The Elcano Global Presence Index (IEPG, after its Spanish acronym) captures the changes in the global presence of 60 countries. This year’s edition is especially focused on the European Union.

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Theme: The Elcano Global Presence Index (IEPG, after its Spanish acronym) captures the changes in the global presence of 60 countries. This year’s edition is especially focused on the European Union.

Summary: As in the two previous editions, the IEPG calculates the global presence of a selection of countries in the economic, military and soft fields. The 2012 edition of the IEPG widens the choice of countries to 60, as well as designing an IEPG for the European Union and a European presence index (IEPE, after its Spanish acronym) for each of the 27 member states. This document summarises the methodology underlying the IEPG. Secondly, it explains the methodological challenges and solutions in calculating an index to evaluate the global presence of a ‘United States of Europe’. Finally, it describes the methodology of the IEPE, which is calculated for the 27 EU member states in 2012. The Annex provides a list of estimated cases.

Contents

Introduction

(1) Main elements of the Elcano Global Presence Index (IEPG)

(2) Incorporating the EU into the IEPG

(3) Elcano European Presence Index (IEPE)

Appendix

Introduction
This paper presents the methodology employed for the third edition of the Elcano Global Presence Index (IEPG). This 2012 IEPG aims to measure and order the global presence of 60 countries in the spheres of the economy (energy, trade and investments), the military and soft power (migration, tourism, sport, culture, information, technology, science, education and development cooperation).

The methodology is obviously based on that of the previous edition (2011 IEPG),[1] which had in turn been the result of the debates following the first edition (2010).[2] The second edition had introduced changes to both the means of calculating global presence in certain dimensions and the way in which they were combined to build the final synthetic index –though this did not involve changing the definition or the functionality of the index, or its methodological pillars–. For this third edition, the IEPG methodology is now deemed to be consolidated.

This year, efforts have focuded instead on making full use of the index’s analytical and explanatory capacity. Of the many changes in the international scene, the most prominent has been the economic –and increasingly political, and even military– rise of a significant group of developing countries. The most notable example is China, which is now the second-largest global economy, but the number of cases is rapidly increasing. This goes beyond the debate over whether convergence is growing between the Southern and Northern blocs. Another hotly debated issue is Europe’s present situation as a political, economic and social union. The current crisis and the problems in resolving it, and therefore with European governance, have dominated many of the analyses by academics and think tanks in recent years.[3]

Moreover, in its Action Plan for 2013, the Elcano Royal Institute set out priority lines of analysis which seek to define Spain’s role in the world and in Europe, and the role of Europe itself on the global stage.

Given its practical purpose –to serve both the analyses conducted by the Elcano Royal Institute and those of other institutions– the current edition of the IEPG seeks to respond, at least partially, to these research and analysis needs. It therefore complements the methodology of the previous two editions with three new additions. First, as well as updating the IEPG with a new 2012 edition, six new countries have been added to the selection for which the IEPG is calculated, bringing the total to 60. These are Algeria, Egypt, Pakistan, the Philippines, Singapore and the United Arab Emirates. The aim is to enhance the IEPG database with emerging and developing economies, increasing the index’s scope as a tool for analysing international relations and the world economy (section 1).

Secondly, to fulfil one of the aims envisaged since the first edition of the index, the IEPG 2012 is published together with the IEPG-EU, which is the global presence index of the EU of 27 member states. In this exercise of ‘political fiction’, the aim is to measure the EU’s global presence considering it as a political, economic and social union –in other words, as a ‘United States of Europe’–. The aim, as for individual countries, is to provide a tool and a measure to allow the real, objective and tangible presence of the EU to be valued and compared with its relative weight on the global stage (section 2).

The specific issues concerning the EU can also be explored further with the third addition to the IEPG, which is actually a new index. In this edition, the IEPG includes the Elcano European Presence Index (IEPE). This ‘IEPG on a European scale’ serves to measure the presence of each of the 27 member states in the specific sphere of the EU and since 2005. The aim is to offer an analytical tool to facilitate, for instance, the study of internal (im)balances within Europe, between central and peripheral countries (section 3).

(1) Main elements of the Elcano Global Presence Index (IEPG)

By global presence we understand the effective positioning, in absolute terms, of the different countries in the world economy, society and political system. The IEPG thus measures the presence of a range of countries –and not their power or influence– in the spheres of the economy, defence and other soft areas of external presence such as culture, sport, tourism, migration, science, information, technology, education and international development cooperation.

This measure is achieved using objective and tangible data and excluding opinions and perception-related data. Similarly, the aim is not to measure the countries’ level of insertion in the globalisation process or their degree of openness towards it –factors which are already measured by other indices of globalisation or economic freedom–. Rather, it explores their total international presence and projection compared to other countries and in relation to their own track record. Finally, the focus is exclusively on results-based presence, rather than on the efforts made by each country to achieve its presence through, for instance, its adherence to supranational governance structures or budgetary expenditure.

In pursuit of these aims, the criteria used to select the variables and indicators of the index are as follows. First, presence is reflected in a single direction –what could be deemed its unidirectionality–. Secondly, it is the results of presence that are measured and not the means to achieve them. In addition, all the variables have an explicitly external component, in the sense that they reflect cross-border presence. Presence is given in absolute and not relative terms; in other words, the indicators are not proportional to the demographic or economic size of the country whose presence is being calculated. Next, the IEPG measures the quantity of presence and not its nature. Likewise, as for any other index, the best explanatory capacity is sought with the fewest variables or indicators possible. In seventh and final place, hard data on presence are taken and not data based on judgments or opinions.

This year’s edition of the IEPG covers the global presence of a selection of 60 countries. The initial selection –for which the two previous editions were calculated– comprised 54 countries including the 42 with the highest GDP in current price terms, according to World Bank data from 2008.[4] That selection also included States which do not belong to this group but which are members of the Organisation for Economic Co-operation and Development (OECD) and/or the EU. In addition, all the member countries of the G-20 happened to be represented in one or other of the groups of countries (Table 1).

Algeria, Egypt, the Philippines, Pakistan, Singapore and the United Arab Emirates are the next six countries in the ranking of leading economies, according to the World Bank’s calculations for 2008. Adding these six countries, however, is also a way of updating the list of countries for which the IEPG is calculated since they have moved up the ranking between 2008 and 2011. In 2011, the United Arab Emirates were the 28th world economy, with Singapore the 41st, Egypt the 43rd, the Philippines the 44th, Pakistan the 47th and Algeria the 49th. Thus, including these other countries the IEPG is calculated in this edition for the top 49 world economies by the 2011 GDP in current dollars, according to the World Bank.

Aside from any other countries that might be incorporated into next year’s edition, Croatia will be a definite addition, since it joins the EU in July 2013.

Finally, in terms of country selection, bear in mind that by making calculations at time intervals that go back to 1990, the intention of the project is to show the ‘two-bloc world’, even if in decline. Thus Russia’s 1990 values refer to those of the Soviet Union, those of Germany to the German Federal Republic, those of the Czech Republic to Czechoslovakia, and those of Slovenia to Yugoslavia.

Table 1. List of IEPG countries

Algeria

Hungary

Philippines

Argentina

Iceland

Poland

Australia

India

Portugal

Austria

Indonesia

Romania

Belgium

Iran

Russia

Brazil

Ireland

Saudi Arabia

Bulgaria

Israel

Singapore

Canada

Italy

Slovakia

Chile

Japan

Slovenia

China

Latvia

South Africa

Colombia

Lithuania

South Korea

Cyprus

Luxembourg

Spain

Czech Republic

Malaysia

Sweden

Denmark

Malta

Switzerland

Egypt

Mexico

Thailand

Estonia

Netherlands

Turkey

Finland

Nigeria

United Arab Emirates

France

Norway

United Kingdom

Germany

New Zealand

United States

Greece

Pakistan

Venezuela

The areas of external presence included in the Index are those of Economic, Military and Soft presence. For each of these, indicators have been used which seek to capture all of the dimensions of external presence in each of these spheres. The variables, indicators and sources for this 2012 IEPG are the same as for the previous edition (Table 2). For more details on the debates and criteria that guided this selection, see Olivié & Molina (2011 and 2012).

In the case of the Information variable, at the end of 2012 the series of the International Telecommunication Union continued to offer data only up to 2010; therefore, for the 2012 IEPG, the data included for the previous year is repeated. In the case of Technology, the series provided by the World Intellectual Property Organization includes data up until the year 2011. Nevertheless, the data since 2009 shows abnormalities due to pending updates. A decision was therefore taken to repeat the values used for the 2011 and 2012 IEPG editions. Regarding Development cooperation, it has not been possible to obtain data for any of the six new cases, either from national or other international sources, on the volume of cooperation disbursed or budgeted. It was therefore deemed preferable, as for the 2011 IEPG, to consider that development cooperation in those countries had no presence in the total rather than making an estimate.[5]

In this 2012 edition, around 400 figures have been estimated. Thus, the proportion of missing and estimated cases only reaches 7% of the database, which includes over 5,400 observations. Again, the hot-deck method has been used for these estimates.

This year, as in the 2011 edition, the performance of the variables is assumed to be linear with the exception of Sports, and the minimum and maximum limits on the scales have not changed either. When adding up the variables in the three groups of Presence and also for the final index, the weightings obtained in the survey carried out for the last edition are maintained.

Table 2. IPEG variables, indicators and sources

Indicator

Description

Source

Economic Presence

   

Energy

Flow of exports of energy products (oil, refined products and gas) (SITC 333, 334, 343)

UNCTADStat

Primary goods

Flow of exports of primary goods (food, beverages, tobacco, agricultural commodities, non-ferrous metals, pearls, precious stones and non-monetary gold), excluding oil (SITC 0 + 1 + 2 + 4 + 68 + 667+ 971)

Manufacturesgodos

Flow of manufactured goods (chemical products, machinery, transport equipment, other manufactured products) (SITC 5 to 8 minus 667 and 68)

Services

Flow of exports of services in transport, construction, insurance, financial services, IT, the media, intellectual property, other business services, personal, cultural and leisure services, and public services

Investments

Stock of foreign direct investment abroad

Military presence

   

Troops

Number of military personnel deployed in international missions and bases overseas

IISS – The Military Balance Report

Military equipment

Weighted sum of aircraft carriers, big ships, destroyers, frigates, nuclear-powered submarines, amphibious ships, medium and heavy strategic aeroplanes and air tankers

Soft presence

   

Migrations

Estimated number of international immigrants in the country at mid year

United Nations Population Division

Tourism

Thousands of arrivals of non-resident tourists at borders

United Nations World Tourism Organization (UNWTO) – Statistics Database

Sports

Weighted sum of points in the FIFA world ranking and medals won at summer Olympic Games

FIFA and IOC

Culture

Exports of audiovisual services (cinematographic productions, radio and television programmes, and musical recordings)

WTO – International Trade Statistics and own estimation

Information

Internet bandwidth (Mbps)

International Telecommunication Union

Technology

Foreign-oriented patents: number of inter-related patent applications filed in one or more foreign countries to protect the same invention

World Intellectual Property Organization (WIPO) – Statistics Database

Science[6]

Number of articles published in the fields of the arts and humanities, social sciences and sciences

Thomson Reuters – Web of Knowledge

Education

Number of foreign students in tertiary education on national territory

UNESCO – Institute for Statistics, OECD – iLibrary and own estimate

Development cooperation

Total gross flows of official development aid or comparable data

OECD – International Development Statistics and Development Co-operation Report 2010 (DAC countries) and own estimate

(2) Incorporating the EU into the IEPG [7]

One of the new features of this year’s edition of the IEPG is its calculation for the EU-27. This exercise is designed to quantify the global projection of the Union, as if it were a political and economic union with its own identity. In general terms, the methodology involves totalling the global presence of each member state and deducting intra-EU flows. As will be described below, however, the exercise has not been free of methodological challenges.

(2.1) Methodological assumptions and challenges
The first year for which the IEPG of the EU is calculated is 2005. This is the first time interval after the major 2004 enlargement to incorporate 10 new member states, which increased the EU to 25. To form the current EU-27, Romania and Bulgaria were also incorporated in 2007, thus creating the first methodological challenge. This has been resolved by calculating the IEPG of the EU in 2005 for a theoretical EU-27 which groups together the EU of the 25 existing members that year as well as Bulgaria and Romania.

Moreover, to measure the EU’s presence in the world, the same variables used in the IEPG calculations for the rest of the countries must always be maintained, insofar as possible, to facilitate comparison. For each of these variables and for each European country, the intra-EU and extra-EU flows must be differentiated, since merely totalling the results of each member state would also record their projection in other member states –consider, for example, the intra- and extra-European trade in German goods–. This distinction between flows has been made feasible by using additional sources of data, and especially Eurostat.

In some cases the problem is not merely an accounting or a statistical one, as would again be the case with trade in goods. Some variables pose a conceptual challenge. Consider the cases of Sports, Information, Technology and Science, which are by definition variables of global projection, making it complicated to extract the intra- or extra-EU component from their global presence (see subheading 2.2).

Finally, as previously shown (Olivié & Molina, 2011 and 2012), the scale used ranges between a theoretical minimum of 0 and a maximum of 1,000 points for the maximum value recorded in each series in 2010. This maximum value has been respected so that the EU as a whole can exceed the value of 1,000.

(2.2) Variables in the IEPG-EU: Economic presence
For all of the variables within the economic dimension –energy, trade in primary goods, manufactures, and services and investments– using Eurostat has allowed a differentiation between intra- and extra-EU flows. The database itself makes it possible to select the EU-27 as the origin of flows and the rest of the world (excluding the EU itself) as the destination. For all the variables, Eurostat data are offered in euros, while those recorded for the rest of the IEPG countries are in dollars. Therefore, the results in euros have been converted into dollars using the euro-dollar exchange rate of the last month of the year, according to Eurostat.

Military presence. Within Military presence, the IEPG includes the troops deployed throughout the world and the capacities required for their deployment. The same data source which is used for the IEPG as a whole (IISS) also provides the required data on the troops of each member country deployed outside EU territory. In the case of equipment, it is deemed in its entirety to be a tool of external projection, since the internal and external space of the EU cannot be distinguished here. Therefore, the decision was taken to combine the military capacities of each member state and grant this value to the EU as a whole.

Soft presence
Migrations. To measure the EU’s presence in migration flows, the number of immigrants from outside the Union has been used for each member state. Eurostat provides data on the immigrants with European nationality in each member state, which is subtracted from the total immigration figure offered by the United Nations. The aggregate value of this result for each member state is the value accorded to the EU-27.

Tourism. As in the case of migration, Eurostat offers data on the number of travellers originating from within the EU who stay in tourist establishments –a figure which can be subtracted from the total–. Nonetheless, the series has only been in existence since 2007, so that year has been used to build the IEPG-EU for 2005.

Sports. The Sports variable presents significant methodological difficulties when it comes to differentiating its presence inside and outside Europe given its intrinsic global dimension. It is measured on the results of the most recent summer Olympic Games and male professional soccer. In order to establish a proxy for sport projection outside Europe, television audiences have been used –which also serve to weight each sporting modality within the total IEPG–.

The audience report drawn up by Kantar Media for FIFA [8] puts the European audience at the last football World Cup final (South Africa 2010) at 33%, while the European audience for the opening ceremony of the Olympic Games in Pekin in 2008 was 30% of the total according to Nielsen. [9] Therefore, we consider the EU’s external projection in Sport to account for 70% of the combined projection of its member states.

Culture. As for Economic presence, each member state’s exports outside Europe of audiovisual works are combined. The data is available on Eurostat.

Information. Many of the methodological discussions have centred on building an EU-27 indicator for the Information variable. Bearing in mind that the IEPG uses each country’s bandwidth capacity, it is impossible to differentiate the intra- and extra-European presence using this same variable. At the same time, the EU includes the leading countries in information technology development, which have very high values in the series compared to other non-European countries. Therefore, a decision was taken to keep the same variable and give the EU the maximum value registered by a member state in each year for which the IEPG is calculated. In the case of the IEPG 2012, this is the UK’s.

Technology. Measuring the EU’s technological presence using the patents aimed at the external market has not been free of difficulties either. First, despite the fact that the World Intellectual Property Organization –the source used for the indicator in the IEPG– offers the possibility of selecting Europe as the patent issuer, it applies the geographical rather then the political conception of the region, thus including more countries than those in the EU-27. Therefore, a decision was taken to add up the values recorded for each member state of the EU-27. Secondly, however, the data do not distinguish between the patents registered inside or outside Europe, but rather simply record those aimed at the external market for each member state. One possible way of resolving this problem is to correct the series with that of patents registered in the European Patent Office (EPO) –which only records those for European use– but specialists in the field advise against the combined used of these two sources since they are not considered methodologically comparable. [10]

Finally, following the recommendation of the World Intellectual Property Organization itself, the data on patents aimed at the external market of each member state and registered in other European countries were selected in the same database, and then subtracted from the sum total of patents for each member of the EU-27.

Science. In the case of Science, the EU value was reached by adding up the values of each member state. Scientific presence, measured through articles published in scientific journals, is considered of global reach, without it being posible to discount the presence in specific geographic spaces –similarly, to calculate the IEPG for the US no attempt is made to deduct the scientific presence in some spaces from others–.

Education. Measuring the EU’s presence in the educational sphere requires data on the number of non-EU students in tertiary education. Eurostat gives the number of EU students [11] following tertiary education in each member state. The difference between the sum of the figures used for each member state to calculate the IEPG total –ie, the number of foreign students in tertiary education– and the sum of the foreign but EU students gives the total number of non-EU students taking tertiary education in the EU.

Development cooperation. This is only concerned with cooperation aimed at developing countries, as defined by the OECD. None of those is a member of the EU, hence by definition the sum of the aid given by EU member states provides the indicator of the Union’s global presence in this sphere.

Table 3. IEPG-EU variables, indicators and sources

Indicator

Description

Source

Economy

   

Energy

Extra-EU flows of exports of energy products (oil, refined products and gas) (SITC 333, 334, 343)

Eurostat

Primary goods

Extra-EU flows of exports of primary goods (food, beverages, tobacco, agricultural commodities, non-ferrous metals, pearls, precious stones and non-monetary gold), excluding oil (SITC 0 + 1 + 2 + 4 + 68 + 667+ 971)

Manufactures

Extra-EU flows of manufactured goods (chemical products, machinery, transport equipment, other manufactured products) (SITC 5 to 8 minus 667 and 68)

Services

Extra-EU flows of exports of services in transport, construction, insurance, financial services, IT, the media, intellectual property, other business services, personal, cultural and leisure services, and public services

Investments

Stock of foreign direct investment outside the EU

Military presence

 

IISS – The Military Balance Report

Troops

Number of military personnel deployed in international missions and bases overseas

Military equipment

Weighted sum of aircraft carriers, big ships, destroyers, frigates, nuclear-powered submarines, amphibious ships, medium and heavy strategic aeroplanes and air tankers

Soft presence

   

Migrations

Estimated number of immigrants from outside the EU

United Nations Population Division and Eurostat

Tourism

Thousands of arrivals of tourists from outside the EU

Statistics database of the United Nations World Tourism Organization (UNWTO) and Eurostat

Sports

Weighted sum of points in the FIFA world ranking and medals won at summer Olympic Games for each EU member state
Corrective variable: European audience at the World Cup Final and the opening ceremony of the Olympic Games

FIFA and ICO
Reports by Kantar Media and Nielsen

Culture

Extra-EU exports of audiovisual services (cinematographic productions, radio and televisión programmes, and musical recordings)

Eurostat

Information

Maximum internet bandwidth (Mbps) in the EU installed in a member state

International Telecommunication Union

Technology

Foreign-oriented patents for the total EU member states: number of inter-related patent applications filed in one or more foreign countries to protect the same invention
Corrective variable: patents registered for each member state in other member states

World Intellectual Property Organization (WIPO) – Statistics Database

Science

Number of European articles published in the fields of the arts and humanities, social sciences and sciences

Thomson Reuters – Web of Knowledge

Education

Number of non-EU foreign students in tertiary education in the EU

UNESCO – Institute for Statistics, OECD – iLibrary and Eurostat

Development cooperation

Total gross flows of official development aid for all member states

OECD – International Development Statistics and Development Co-operation Report 2010 (DAC countries)

(3) Elcano European Presence Index (IEPE)

The third new feature in this edition of the IEPG is the incorporation of a measure of the presence of the EU-27 member states within the Union itself: the Elcano European Presence Index (IEPE). To some extent, methodologically, this indicator is the flipside of the IEPG-EU. In a similar way to the IEPG, it shows the cross-border presence of the member states, which in the case of the IEPE is limited to the European (and not global) space. The methodology thus allows comparisons between member states, but not with the IEPG of other countries. It facilitates a comparative analysis of the current situation and recent evolution of the positioning of European countries within the Union. In addition, comparing member states’ positions in the IEPE and the IEPG can offer significant information.

(3.1) Methodological assumptions and challenges
The IEPE aims to be an IEPG on a European scale, so the structure and methodology of the IEPG have been respected as far as possible, although some slight modifications have occasionally proved essential. Thus, in general terms, the IEPE modifies the IEPG by reducing the measures of presence on a global scale to the intra-European scale –for example, intra-EU migration flows, exports to the rest of the EU or European foreign students–. It almost always does so by using Eurostat data, just as for the calculation of the IEPG-EU. Obviously, the change in scale also reduces the scaling: the value of 1,000 assigned to the maximum indicator of the 2010 series in the IEPG is given, in the case of the IEPE, to the maximum value registered in 2010 by a member state and for the intra-European presence series.

Just as for the IEPG-EU, and with the same variables, conceptual problems emerge: how can we differentiate the intra-EU presence of Sport when this is measured by Olympic medals and FIFA points? And the bandwidth that reflects presence in terms of information? Or academic publications? For the IEPE we have resolved this methodological problem by changing the scaling: the same values for each of the variables Sport, Information and Science are maintained, establishing the maximum value exclusively as that of the member state series.

Finally, just like the IEPG-EU, the IEPE is calculated from 2005 onwards for each member state of the EU-27. Although the 27-member EU was not formed until 2007 with the incorporation of Romania and Bulgaria, the IEPE of these countries is also calculated in 2005.

(3.2) Changes in the variables
Economic presence. To measure economic presence within the IEPE, the same variables have been maintained as in the IEPG. As in the calculation of the IEPG-EU, using an alternative source –Eurostat– has facilitated the differentiation of intra-EU exports of energy, primary goods, manufactures and services from the total, as well as the disaggregation of the investment stock of each member state in the EU-27 from the global amount (Table 4).

Military presence. Military presence is not included as a variable in the IEPE: European troops are almost all deployed outwith European territory, as are their related capacities. In general terms, the military dimension can be considered uncharacteristic of intra-European presence. It is therefore given a value of zero for each member state and each year in the calculation of the IEPE.

Soft presence
Migrations. The presence of each member state in migration flows is measured according to the number of residents with the nationality of another EU-27 country. The data source is Eurostat.

Tourism. Eurostat provides data on the number of travellers from within the EU staying in tourist establishments for all of the member states, with the exception of Ireland. The series has only been in existence since 2007, so that year has been used to build the IEPG-EU for 2005. In the case of Ireland, the data have been obtained from the World Tourism Organization.

Sport. The methodological problems that the Sport variable presents have already been discussed and they are the same here as for the construction of this series in the IEPG-EU. As indicated under the earlier subheading, the problem is resolved by changing the scaling to adapt it to the European space. The data source is the same as for the IEPG.

Culture. The presence of the member states in cultural matters within the EU-27 is measured by intra-European exports of audiovisual services –data obtained from Eurostat–. Nevertheless, this source does not offer information on the intra-European exports of Spain, [12] Portugal, [13], Greece [14] and the UK. [15] Therefore, national data sources have had to be used in these specific cases. [16]

Information. As has already been mentioned, this variable presents the methodological challenge of how to disaggregate a specific regional presence for a concept which is intrinsically global. As with Sport and Science, the figure recorded for the IEPG –in this case, installed bandwidth capacity– is maintained, even if its contribution to the IEPE changes in line with the change in scaling, which only includes the maximum and minimum values within the EU-27.

Technology. While Technology in the IEPG is measured by the total external-oriented patents, measuring the intra-European presence involves using the data on patents registered with the European Patent Office, which Eurostat gathers. It records the patents valid in all of the signatory countries of the European Patent Convention, that is the 27 EU member states and another 11 countries. [17] The indicator is not perfect since the European space of reference does not coincide exactly with that of the EU-27.

Science. Here too, the IEPE is the result of the values that each member state records for the IEPG with a change in scale to the European space. The reference points remain the scientific publications in journals indexed by Thomson Reuters in the Web of Knowledge.

Education. To measure presence in Education in the IEPE, data is used that shows the number of EU students [18] in tertiary education in each member state, according to Eurostat.

Development cooperation. For the same reasons as Military presence, Development cooperation presence has been left out of the IEPE. By definition, the aid flows channelled from the EU and its member states cannot be directed to other members of the Union. Here too, a value of zero is assigned to this variable in each member state and for each year.

Table 4. IEPE variables, indicators and sources

Indicator

Description

Source

Economy

   

Energy

Intra-EU flows of exports of energy products (oil, refined products and gas) (SITC 333, 334, 343)

Eurostat

Primary goods

Intra-EU flows of exports of primary goods (food, beverages, tobacco, agricultural commodities, non-ferrous metals, pearls, precious stones and non-monetary gold), excluding oil (SITC 0 + 1 + 2 + 4 + 68 + 667+ 971)

Manufactures

Intra-EU flows of manufactured goods (chemical products, machinery, transport equipment, other manufactured products) (SITC 5 to 8 minus 667 and 68)

Services

Intra-EU flows of exports of services in transport, construction, insurance, financial services, IT, the media, intellectual property, other business services, personal, cultural and leisure services, and public services

Investments

Stock of foreign direct investment in the EU

Military presence

   

Troops

Value 0 for all countries and years

Military equipment

Value 0 for all countries and years

Soft presence

   

Migrations

Estimated number of immigrants from within the EU

Eurostat

Tourism

Thousands of arrivals of tourists from within the EU

Eurostat

Sport

Weighted sum of points in the FIFA world ranking and medals won at the summer Olympic Games

FIFA and IOC

Culture

Intra-EU exports of audiovisual services (cinematographic productions, radio and televisión programmes, and musical recordings)

Eurostat and national sources

Information

Internet bandwidth (Mbps)

International Telecommunication Union

Technology

Number of patents registered at the European Patent Office (EPO)

Eurostat

Science

Number of articles published in the fields of the arts and humanities, social sciences and sciences

Thomson Reuters – Web of Knowledge

Education

Number of EU foreign students in tertiary education

Eurostat

Development cooperation

Value 0 for all countries and years

 

Iliana Olivié, Senior Analyst for International Cooperation and Development, Elcano Royal Istitute.

Manuel Gracia, Research assistant, Elcano Royal Istitute.


[1] Iliana Olivié and Ignacio Molina (2012), ‘Measuring the international presence of countries: the Elcano Institute's IEPG Index methodology revisited’, WP, nº 9/2012 (translated from Spanish), Elcano Royal Institute.

[2] Iliana Olivié and Ignacio Molina (2011), ‘Elcano Global Presence Index’, Estudios Elcano, nº 2 (translated from Spanish), Elcano Royal Institute.

[3] For some recent examples see, for example, Fred Bergsten and Jacob Funk Kirkegaard (2012), ‘The Coming Resolution of the European Crisis’,Petersen Institute for International Economics, PB 12-1; INET Council on the Euro Zone Crisis (2012), Breaking the Deadlock: A Path Out of the Crisis, Institute for New EconomicThinking; Steinberg, Federico (2012), ‘Economía Política de la Reforma de la Gobernanza del Euro’, Principios. Estudios de Economía Política, nº 21, pp. 61-81; Federico Steinberg and Ignacio Molina (2012), ‘El nuevo gobierno del euro: ideas alemanas, intereses divergentes e ideas comunes’, Revista de Economía Mundial, nº 30, pp. 59-81; Benjamin Cohen (2012), ‘The Future of the Euro: Let’s Get Real’, Review of International Political Economy, vol. 19, nº 4, pp. 689-700; and Sebastien Dullien and José Ignacio Torreblanca (2012), ‘What is the Political Union?’, ECFR Policy Brief, nº 70, December.

[4] The year this project started at the Elcano Royal Institute.

[5] In the case of Algeria, although it is assigned a zero value, some instances are known of disbursements to Saharan refugee camps, Palestine and Mali. A similar situation occurs with Pakistan: there are records of programmes in the education sector but the amounts assigned, budgeted or disbursed are unknown. The authors wish to thank Ventura Rodríguez and Bibian Zamora for this information.

[6] Again this year, the authors are grateful to Thomson Reuters (Philipp Purnell and Sébastien Vellay) for their cooperation in providing data to build the Science indicator.

[7] In order to incorporate the EU into the IEPG and build the IEPE, a meeting to discuss methodology was held with various specialists in European, methodological and/or scientific and technological issues. The authors wish to thank them for their contributions and comments. The participants were Alfredo Arahuetes, Marisa Figueroa, Narciso Michavila and José Molero, as well as the analysts of the Elcano Royal Institute Ignacio Molina, Alicia Sorroza and Federico Steinberg, in addition to the authors.

[8] http://www.fifa.com/mm/document/affederation/tv/01/47/32/73/2010fifaworldcupsouthafricatvaudiencereport.pdf.

[9] http://www.nielsen.com/content/dam/corporate/us/en/newswire/uploads/2008/08/press_release20.pdf.

[10] The authors are especially grateful to Professor José Molero for his assistance with the methodological solution for this indicator.

[11] The data provided by Eurostat also include students from EU candidate countries (Turkey, Macedonia, Iceland, Montenegro and Serbia), which cannot be deducted.

[12] Data obtained from the Agencia Estatal de la Administración Tributaria. Departamento de Aduanas, Estadísticas de Comercio Exterior. The data include exports of films and hardware with audiovisual content.

[13] Data obtained from the Estatísticas do Comércio Internacional (INE). Exports of hardware with audiovisual content.

[14] Data obtained from the balance of payment statistics provided by the Bank of Greece.

[15] Datos obtained from the Office for National Statistics of the United Kingdom. Exports of cinematographic and television services.

[16] The authors wish to thank Dr Ángel Badillo for his invaluable help in collecting this data.

[17] Albania, Switzerland, Croatia, Iceland, Liechtenstein, Monaco, Macedonia, Norway, Serbia, San Marino and Turkey.

[18] The data provided by Eurostat also include students from EU candidate countries (Turkey, Macedonia, Iceland, Montenegro and Serbia), which cannot be deducted.

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