Globalisation recovering from financial crisis

Global logistics company DHL has released the third edition of its Global Connectedness Index (GCI), a tool to measure the state of globalisation around the world.

The report shows that 'global connectedness' – measured by cross-border flows of trade, capital, information and people – has recovered most of its losses incurred during the financial crisis, but there’s still room for improvement.

“In the aftermath of the financial crisis, globalisation has increasingly come under pressure and international trade negotiations face growing resistance,” said Frank Appel, CEO Deutsche Post DHL – adding that globalisation is now gaining speed again, with billions in potential revenue waiting to be tapped.

What has changed is the substantial shift of economic activity to emerging economies. Notably, the 10 countries where global connectedness increased the most from 2011 to 2013 are all emerging economies, with Burundi, Mozambique and Jamaica experiencing the largest gains. The Middle East and North Africa were the only regions to experience a significant decline in connectedness.

According to the index, advanced economies have not kept up with this shift, which may suggest that they are missing out on growth opportunities in emerging markets.

“Counteracting this trend would require more companies in advanced economies to boost their capacity to tap into faraway growth,” said Professor Pankaj Ghemawat, Co-Author of the report and internationally acclaimed globalisation expert.

The Netherlands retained its top rank as the world’s most connected country and Europe is once again the world’s most connected region, with all but one of the top 10 most globalised countries in the world located in Europe, with Singapore as the one standout. North America is the second most globally connected region.

The 2014 DHL Global Connectedness Index draws on more than one million data points from international flows covering trade, capital, information and people accumulated over the last nine years. The ranking encompasses 99 per cent of the world’s GDP and 95 per cent of the world’s population.

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