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Recession takes its toll on globalisation

[ November 29, 2012   //   ]

The world is less globally connected than it was in 2007, says the second DHL Global Connectedness Index (GCI). The index, which analyses international flows of trade, capital, information and people, grew robustly from the report’s baseline year of 2005 to 2007, but 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, say the report’s authors.
The GCI 2012 is testament to today’s volatile and uncertain business environment said CEO Deutsche Post DHL, Frank Appel. However, it was important to remember the tremendous gains that globalisation has brought to the world’s citizens and “to recognize it as an engine of economic progress,” he added. He urged governments to resist protectionist measures.

Despite the very modest increase in global connectedness from 2010 to 2011, some individual countries had large gains. The largest increases were in sub-Saharan Africa – Mozambique, Togo, Ghana, Guinea and Zambia – and, although this region remains the world’s least connected, it averaged the largest increases.

The Netherlands retained its 2010 position as the world’s most connected country and, of the top ten most connected countries in 2011, nine of them are in Europe,s the world’s most connected region. The UK remained in sixth place.

Although it tops the 2011 ranking, the Netherlands has surprising headroom to further increase its integration with the world, according to a new case study in the 2012 edition of the GCI.
Report author Professor Pankaj Ghemawat explained: “Investigating the actual extent of globalization on a country-by-country and regional basis reveals two critical things. First, cross-border flows are significantly lower than commonly perceived, and second, every country – even the Netherlands – has untapped possibilities to benefit from more connectedness. At a time of economic weakness, this represents one of the most powerful levers available for boosting growth.”

The DHL Global Connectedness Index 2012 and background information can be downloaded at www.dhl.com/gci

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