World is less connected, says DHL

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The world’s current level of globalisation is still lower that at its pre-crisis peak, according to DHL’s Global Connectedness Index.

The index documents how global connectedness, measured by international flows of trade, capital, information and people, grew robustly from the report’s baseline year of 2005 to 2007, and then dropped sharply at the onset of the financial crisis. Despite modest gains since 2009, global connectedness has yet to recapture its pre-crisis peak.

“The GCI 2012 indicates that today’s volatile and uncertain business environment bears the lasting impact of the financial crisis,” said Frank Appel, CEO Deutsche Post DHL.

“Especially in this period of slow growth, it’s important to remember the tremendous gains that globalisation has brought to the world’s citizens and to recognise it as an engine of economic progress,

“Above all, governments must resist protectionist measures that hinder cross-border interactions.”

The countries with the largest increases in their global connectedness scores from 2010 to 2011 are Mozambique, Togo, Ghana, Guinea and Zambia – all of which are located in Sub-Saharan Africa. While this region remains the world’s least connected, it averaged the largest connectedness increases from 2010 to 2011.

The Netherlands retained its 2010 position as the world’s most connected country. Nine of the top ten most connected countries in 2011 are located in Europe.

The report highlights evidence that the depth of global connectedness – the proportion of flows that cross national borders – contributes to economic development and prosperity.

“The benefits of expanding merchandise trade are much larger than traditional models indicate,” said author Professor Pankaj Ghemawat.

“Adding to that the gains from services trade and other kinds of cross-border flows, the estimated economic benefits double to at least 8 per cent of global GDP.”

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