The world is less globally connected today than it was in 2007, claims DHL in the second edition of its “Global Connectedness Index,” which measures international flows of trade, capital, information and people. From the baseline year of 2005, DHL concludes that global connectedness grew robustly to 2007, and then dropped sharply at the onset of the financial crisis.
Despite modest gains since 2009, the world has not yet regained its pre-crisis peak level of connectedness, according to the study. “The GCI 2012 indicates that today’s volatile and uncertain business environment bears the lasting impact of the financial crisis,” said Frank Appel, CEO of Deutsche Post DHL.
“Especially in this period of slow growth, it’s important to remember the tremendous gains that globalization has brought to the world’s citizens and to recognize it as an engine of economic progress,” Appel added. “Above all, governments must resist protectionist measures that hinder cross-border interactions.”
Of the top 10 most-connected countries in 2011, nine are located in Europe — the world’s most-connected region by DHL’s measure. The Netherlands retained its 2010 position as the world’s most connected country. The countries seeing the largest gains from 2010 to 2011 were in the world’s least-connected region, Sub-Saharan Africa. Topping the growth league were Mozambique, Togo, Ghana, Guinea and Zambia.
“Europe’s high level of global connectivity points to one of the greatest achievements of European integration,” Appel said. “We have to remember this as talk of fragmentation enters the debate over the continent’s future.”
Although it tops the 2011 ranking, the Netherlands still has room to further increase its integration with the rest of the world, explained Pankaj Ghemawat, author of the new report.
“Investigating the actual extent of globalization on a country-by-country and regional basis reveals two critical things,” he said. “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.”
Alongside the Netherlands, the 2012 edition of the GCI also includes case studies on Mexico and Vietnam. It offers eight recommendations to help countries enhance or expand their connectedness with the rest of the world, and underlines the contribution this can make to economic development and prosperity.
“The benefits of expanding merchandise trade are much larger than traditional models indicate,” Ghemawat said. “Adding to that the gains from services trade and other kinds of cross-border flows, the estimated economic benefits double to at least 8 percent of global GDP.”
The report concludes that the world’s shifting economic center of gravity is reshaping industry connectedness. The migration of production and consumption to emerging markets has specific implications for the pharmaceutical, automotive and mobile phone industries highlighted in the report.
DHL Global Forwarding has opened its first office in Libya, driven by a faster-than-expected recovery in oil production. The company pledged to offer customers in the key energy, construction, telecommunications and pharmaceuticals sectors access to international-standard services such as documentation-handling, Customs clearance and warehousing, air- and seafreight, domestic and cross-border trucking.
According to Thomas Nieszner, DHL Global Forwarding’s CEO for Europe, the Middle East and Africa, Libya’s post-revolution oil recovery has progressed faster than expected. “Production for 2012 is close to 90 percent of pre-conflict levels and is expected to match pre-conflict levels in 2013,” he said. “This is spurring increased public spending to rebuild the nation as well as all-around economic growth, both of which require logistics support.”
DHL Global Forwarding has opened in a location close to Tripoli’s business district but aims to serve clients across the country, operating through the two main airports of Tripoli and Benina as well as Libya’s three main ports. Although Tripoli is DHL Global Forwarding’s first office in Libya, DHL has offered an express parcel service in the country since 1989.
“Following the formation of Libya’s new government, we believe this is the right time to step in and offer logistics support to Libya’s global partners and local traders,” said Hazem Ibrahim, Libya’s country manager for DHL Global Forwarding. “The products and services offered by DHL Global Forwarding extend from standardized logistics operations to multimodal transport solutions and highly individualized industrial projects, all of which Libya needs to build its recovery, maintain stability and gain confidence.”