-
Global connectedness remains strong despite a series of global shocks over the past decade
-
Globalization reached its peak in 2022 and remained close to that level in 2023
-
It is seen to rebound in 2024, according to the DHL 2024 Global Connected Report (GCR)
-
The report said the resilience and growth of international flows of trade, capital, information, and people in the face of recent crises strongly rebuts the notion that the growth of global flows has gone into reverse
-
The GCR for the first time measured the world’s depth of globalization, pegging it at 25%
-
Singapore replaced the Netherlands as the most globally connected country, with the latter placing second and Ireland third
NEW DELHI — Global connectedness “remains strong, even as the public policy context has become less conducive to globalization, and conflicts dominate the headlines,” according to the 2024 DHL Global Connected Report (GCR) launched in this city on March 13.
Globalization hit its peak in 2022 and remained close to that level in 2023 despite a series of global shocks over the past decade, including a pandemic, wars, and trade conflict, the report said.
The GCR, a collaboration with New York University’s (NYU) Stern School of Business, analyzes the state and trajectory of globalization by tracking how flows of trade, capital, information, and people move around the world.
The 2024 report, its 10th edition, is based on almost nine million data points and ranks the connectedness of 181 countries, accounting for 99.7% of the world’s gross domestic product and 98.7% of its population.
The 2024 GCR said the resilience and growth of international flows of trade, capital, information, and people in the face of recent crises strongly rebuts the notion that the growth of global flows has gone into reverse.
Trade growth, in particular, played a crucial role in boosting global connectedness. The share of global output traded internationally was back to a record high level in 2022 and although a slowdown was seen in 2023, trade growth is forecast to accelerate in 2024.
The globalization of information flows has been especially strong over the past two decades, even though the latest data show a stall in their growth, partly due to less research collaboration between the US and China. Corporate globalization is rising, with companies expanding their international presence and earning more sales abroad.
People flows were hit hardest by the COVID-19 pandemic, but it continued a strong recovery trend in 2023. International travel reached 88% of its pre-pandemic level and was on track for a full recovery by the end of 2024.
“The most recent findings of the DHL Global Connectedness Report unequivocally dispel the notion of globalization reversing course,” DHL Express chief executive officer John Pearson said in a statement.
Pearson added: “Far from being a mere buzzword, globalization is an influential force that has profoundly reshaped our world and has further great potential. Expanding markets and fostering opportunities empower individuals, businesses, and entire nations to flourish in unique ways. Embracing globalization allows us and our customers to forge a promising future, fostering an increasingly interconnected world, more prosperous for all – and poised for further growth.”
The report also affirms the considerable potential to continue growing global flows.
Measuring the world’s depth of globalization on a scale running from 0%, or nothing crosses national borders at all, to 100%, or a “frictionless” world where borders and distance have ceased to matter, the report pegs the world’s current level of globalization at only 25%, which means it is still closer to a world of separate countries than to a fully globalized world.
“The fact that we’re still closer to zero percent than 100% means there’s still a great deal of potential for further growth,” Steven Altman, senior research scholar and director of the DHL Initiative on Globalization at NYU Stern’s Center for the Future of Management, said in a speech during the launch.
The report noted that without policy constraints, there is ample scope for countries to continue growing their international flows.
Singapore achieved the number one spot as the most globally connected country in the latest GCR, replacing the Netherlands which now ranks second. Ireland, meanwhile, improved from fifth to third.
Forming the top 10 globally connected countries were Luxembourg, Malta, Switzerland, Belgium, United Arab Emirates, United Kingdom, and Hong Kong. UAE also ranked as the top country that had the highest increase in connectedness since 2001, while Singapore had the largest international flow relative to domestic activity. The UK had the broadest geographical reach of international flows.
The report also showed that 143 countries became more globally connected, while only 38 saw their levels of connectedness decline.
READ: PH falls to 65th place in DHL Global Connectedness Report
Further evidence shows that Europe is the world’s most globally connected region, followed by North America, and the Middle East and North Africa.
“Singapore has invested heavily in strengthening our physical and digital connectivity to the world because trade is our lifeblood,” said Ih-Ming Chan, executive vice president of the Singapore Economic Development Board.
“We continue to enhance our connectivity and trade links to remain a critical and trusted node in global supply chains, facilitating international trade and flows of capital, information and talent. We look forward to partnering with global companies seeking a launchpad for business growth and supply chain expansion in Asia-Pacific and beyond,” Chan added.
The latest GCR also showed that US-China ties continue to diminish, with the shares of both countries’ flows involving each other decreasing by about one-quarter since 2016.
Both countries, however, remain significantly connected, demonstrating larger flows than almost any other pair of countries.
Russia and Europe have decoupled, resulting in Russia facing an unprecedented drop in connectedness, more than twice as much as any previous decline on record among the world’s 20 largest economies. At the same time, the data analysis demonstrates that there is no wider split of the world economy between rival geopolitical blocs.
The report further shows that predictions of a global shift from globalization to regionalization are not – at least yet – borne out in patterns of international flows.
Most international flows, the report noted, are taking place over stable or even longer distances, with a declining share happening inside major geographic regions.
In the realm of trade, only North America shows a clear shift to more regionalized trade patterns.
“Deglobalization is still only a risk, not a current reality,” said Altman.
He explained: “Geopolitical threats and public policy shifts have led many to predict a fracturing of the world economy along geographic or geopolitical lines, or even a retreat from international to domestic business. But the latest data still show that international flows are growing and very few countries are cutting ties with their traditional counterparts. It is important to recognize the resilience of global flows because a lopsided focus on the threats to globalization could make deglobalization a self-fulfilling prophecy.” – Roumina Pablo
