DHL’s global connectedness index: globalisation set for a comeback

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DHL’s 2020 Global Connectedness Index has signalled that globalisation is set to make a recovery in 2021 after being setback by COVID-19 this year.

The report, now in its seventh edition, is the first comprehensive assessment of globalisation during the spread of the COVID-19 pandemic. It tracks international flows of trade, capital, information and people across 169 countries and territories.

John Pearson, CEO of DHL Express, says that the coronavirus crisis has shown how vital a role international connections play in the global economy.

“The current crisis has shown how indispensable international connections are for maintaining the global economy, securing people’s livelihoods and helping companies strengthen their trading levels” “Connected supply chains and logistics networks play an essential role in keeping the world running and stabilizing globalisation especially at a time of a crisis that spans our globe. This reminds us of the need to stay prepared for any challenge. The recent vaccine breakthrough has put a spotlight on the systemic importance of fast and secure medical logistics dependent on a worldwide interconnected network that effectively ensures international distribution.”

The report found that Europe is the world’s most globally connected region, with the UK, Switzerland, Ireland, Denmark, Luxembourg, Belgium and the Netherlands among the most connected in the continent.

According to DHL, the key takeaways from the report are as follows:

  1. After holding steady in 2019, the world’s level of global connectedness is set to decline in 2020 due to the Covid-19 pandemic. However, it is unlikely to fall below levels seen during the 2008-09 global financial crisis.
  2. People flows suffered an unprecedented decline in 2020 as nations closed borders to curb the spread of the virus. International travel is on track to fall all the way back to its 1990 level.
  3. International trade rebounded strongly after a sharp plunge at the onset of the pandemic. The proportion of global output crossing national borders will decline modestly in 2020.
  4. Capital flows were hit harder than trade by the Covid-19 recession, but these flows have also started to recover. Strong policy responses by governments and central banks have helped to stabilize markets.
  5. After signs of a slowdown in the globalisation of information flows before the pandemic, international data flows and telephone calls spiked as Covid-19 forced in-person interactions to go digital.
  6. The Netherlands is the world’s most globally connected country. Singapore ranks second overall and earned top marks in terms of the size of international flows relative to domestic activity. And no country boasts a more global distribution of flows than the United Kingdom.
  7. Europe claims the top spot as the world’s most globalised region, with 8 of the 10 most globally connected countries located there. Europe leads on trade and people flows, while North America is the top region for information and capital flows.
  8. The list of economies that are seen to punch well above their weight in terms of international flows is led by Cambodia, Singapore, Viet Nam, Malaysia, and the Netherlands, with regional supply chains a key factor in the performance of Southeast Asian nations.
  9. Geopolitical tensions pose a significant threat to globalisation, but for now there is no strong evidence of the world economy fracturing along regional lines. US-China decoupling, however, has continued to advance.
  10. 10 Stronger global connectedness could accelerate the world’s recovery from the Covid-19 pandemic, as countries that connect more to international flows tend to enjoy faster economic growth.

The full report can be downloaded here.

Photo credit: DHL