DHL Global Connectedness Index: Southeast Asian nations beat expectations as globalization hits new record high

• Of the five countries to exceed expectations in
  international flows by the widest margin, four come from Asia: Cambodia, Malaysia,
  Singapore and Vietnam
• Singapore is the world’s second most connected
  country after The Netherlands and the only Asia Pacific country in the Top 10
  ranking

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SINGAPORE
- Media OutReach - February 14, 2019 – DHL has released
the fifth edition of the DHL Global Connectedness Index (GCI) — a detailed
analysis of globalization, measured by international flows of trade, capital,
information and people.

 

The latest edition of the GCI saw Southeast Asian
nations Cambodia, Malaysia, Singapore and Vietnam beat expectations by the
widest margin, reflecting improved supply chain networks within the region and ASEAN
policy initiatives promoting economic integration. Singapore also remains the
world’s second most connected country, being the only Asia Pacific country to
feature in the Top 10 ranking. Myanmar experienced the biggest improvement,
jumping 23 spots to 133rd position. Hong Kong retains its second place behind
Singapore on the depth dimension of the Index, which measures the proportion of
overall physical, intellectual and human capital that crosses national borders;
while Japan and South Korea continue to rank amongst the top 5 in global breadth
of the same flows.

 

“While the results for Singapore, Hong Kong and
the North Asian powerhouses of Japan and South Korea bring few surprises, the
Index highlights just how rapidly Southeast Asia is plugging into the global
economy. The establishment of the ASEAN Economic Community in late 2015 appears
to have brought significant improvements to trade flows, particularly with
reductions in trade tariffs and better access to ports and logistic hubs,[1]”
said Ken Lee,
CEO, DHL Express Asia Pacific. “The outperformance of emerging markets
like Cambodia and Vietnam, coupled with Malaysia’s outpacing of expectations in
the face of local economic uncertainty, suggests that ASEAN will continue to
grow even amidst broader global volatility.”

 

“While business leaders still face hurdles to
greater breadth and depth of trade connectivity, some challenges like
infrastructure, technology and skills training are already being addressed
jointly by governments and industry.”

 

The 2018 index
measures the current state of globalization, as well as individual rankings for
each country, based on the depth (intensity of international flows) and breadth
(geographical distribution of flows) of countries’ international connections.
The world’s top five most globally connected countries in 2017 were the
Netherlands, Singapore, Switzerland, Belgium and the United Arab Emirates. Despite
Southeast Asia’s rapid advances in trade connectivity, the Asia Pacific region
remains less connected to the rest of the world overall than other regions.

 

The new GCI report
represents the first comprehensive assessment of developments in globalization
across 169 countries and territories since the Brexit referendum in the United
Kingdom and the 2016 presidential election in the United States. In spite of
growing anti-globalization tensions in many countries, connectedness reached an
all-time high in 2017, as the flows of trade, capital, information and people
across national borders all intensified significantly for the first time since
2007. Strong economic growth boosted international flows while key policy
changes such as US tariff increases had not yet been implemented.

 

A central theme of research by GCI co-authors
Steven A. Altman and Pankaj Ghemawat is that at the global level, the world is
still less connected than most people think it is, even after globalization’s
recent gains. For example, just about 20% of economic output around the world
is exported, roughly 7% of phone call minutes (including calls over the
internet) are international, and only 3% of people live outside the countries
where they were born. The report also debunks the belief that distance is
becoming irrelevant. Most countries are much more connected to their neighbors
than to distant nations.

 

Emerging
economies remain less connected than advanced economies

 

The GCI continues to reveal vast differences
between levels of globalization in advanced versus emerging economies. Emerging
economies trade almost as intensively as advanced economies, but advanced
economies are more than three times as deeply integrated into international
capital flows, five times for people flows, and almost nine times with respect
to information flows. Additionally, while leaders from large emerging markets
have become major supporters of globalization on the world stage, emerging
economies’ progress catching up in terms of global connectedness has stalled.

 

Note to
editors:

The report was commissioned by DHL and authored
by Steven A. Altman, Pankaj Ghemawat, and Phillip Bastian of the New York
University Stern School of Business and the IESE Business School. The 2018 DHL
Global Connectedness Index draws on more than 3 million data points from
international flows covering trade, capital, information and people. It
documents and dissects levels of globalization, both at the global level and
for 169 countries and territories that jointly account for 99% of the world’s
GDP and 97% of its population.

 

The report and additional background information
can be downloaded at logistics.dhl/gci.

 

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