Globalization proves resilient through the COVID-19 disaster
- DHL Global Connectedness Index is set to increase in 2021
- Trade in goods rose above pre-pandemic levels
- Globalization has not given way to regionalization
- Low-income countries are lagging behind in globalization recovery
- 10th Anniversary Special Report highlights the positive relationship between global connectivity and economic prosperity and highlights important lessons for strengthening connectivity
SINGAPORE, November 30, 2021 / PRNewswire / – DHL and NYU’s Stern School of Business today released the 2021 update of the DHL Global Connectedness Index. In its tenth year, this report offers a fresh look at the impact of the pandemic on globalization by analyzing international trade, capital, information and people flows. While there are different trends in the different types of flows, the overall DHL Global Connectedness index fell only very modestly in 2020 and is expected to increase in 2021 COVID-19 ‘Stress test’ also showed long-standing weaknesses that require attention in the future.
DHL Global Connectedness Index: Globalization proves to be resilient during the Covid-19 crisis
“Many feared that the global crisis would jeopardize the progress of globalization. We have been analyzing the various international flows around the world for years and can now, after 1.5 years of pandemic, insure with certainty: The pandemic did not bring globalization to a collapse. In 2020, the DHL Global Connectedness Index will rise again this year, “says John Pearson, CEO DHL Express. “Commerce is a lifeline for countries around the world and DHL Express has played a key role in areas ranging from vaccine distribution to e-commerce.”
International trade, capital, information and people flows have been affected by the pandemic in different ways
After a sharp slump at the beginning of the pandemic, trade in goods recovered above its pre-pandemic level before the end of 2020. Global trade in goods set new records in 2021. FDI has contracted even more than trade in 2020, but it is well on the way to a full recovery in 2021. International data flows increased in 2020 as personal interactions went online, but this could represent a longer-term slowdown in globalization Do not suspend information flows. After all, international flows of people have been hardest hit by the pandemic and are slowly recovering. International travel declined 73% in 2020, but there are signs of recovery from mid-2021.
“The resilience of global flows is good news because a connected world offers the best prospects for a strong and sustained recovery from the COVID-19 pandemic. Of course, when a crisis occurs, many of us feel a strong impetus to hide behind borders. But the more extreme the challenge, the more urgent it is to fall back on the best ideas and resources from home and abroad, ”says Steven A. Altman, Senior Research Scholar and Director of the DHL Initiative on Globalization, NYU Stern.
“The robust global trade flows and economic recovery continue to create growth opportunities in the Asia Pacific, with Asia The volume of goods exports and imports is expected to increase to 14.7% and 9.4% respectively above 2019 levels in 2021. With the entry into force of the regional comprehensive economic partnership in January 2022, it will contribute to greater global connectivity, economic recovery and prosperity for the region, “said Ken Lee, CEO, DHL Express Asia Pacific. “As world trade continues its upward trend, our commitment is to invest in EUR 750 million to strengthen our ground infrastructure and our flight network in Asia Pacific between 2020 and 2022 will ensure that we meet the increasing demand for express logistics services and support our customers’ efforts to expand their global presence. “
The increase in international trade since mid-2020 has exceeded the initial forecasts by far, even if the mix of goods traded changed more than usual. Trade in goods to control the pandemic rose sharply, while trade in many other products declined. Contrary to expectations that the pandemic would lead to a stronger regionalization of trade, goods trade in 2020 took place over longer distances on average. Data on capital, information and people flows also show no clear indications of a shift. From globalization to regionalization.
The world’s poorest countries are still lagging behind in globalization recovery. Even though world trade set new records in early 2021, the countries with the lowest per capita incomes still traded less than in 2019. FDI in low-income countries also fell over the same period, while it grew strongly in middle-class countries and high income. The world’s poorest countries are still dangerously separated, and stronger links with the world could hasten their recovery from the crisis COVID-19 pandemic.
Special report shows lessons from 10 years of DHL Global Connectedness Index analysis
In a special report on the 10th anniversary of the DHL Global Connectedness Index, DHL and the NYU Stern School of Business highlight strong links between global connectedness and prosperity. This report shows how political decision-makers can actively influence the networking of their countries. Five key areas for improving a country’s connectivity are peace and security, an attractive domestic business environment, openness to international flows, regional integration and social support. Notably, an attractive domestic business environment can strengthen a country’s global connectivity even more than traditional globalization policies.
The report also examines five countries (Mexico, The Netherlands, Sierra Leone, The United Arab Emirates, Vietnam), which over the past two decades have been characterized by their strong or increasing solidarity. The various paths that these countries have taken towards greater networking show that there is no one size fits all recipe – instead, each country can pursue the international options that make the most sense in its own local context.
Big untapped opportunities
Both reports highlight that despite setbacks, the world remains close to a record high for globalization. At the same time, however, they also show that globalization is still limited and that countries and companies offer great untapped opportunities. Most of the business activity still takes place within national borders, and the cross-border flows mainly take place between neighboring countries. Dominant trends still point to a future with great opportunities to benefit from stronger connections to the world.
Via the DHL Global Connectedness Index
The DHL Global Connectedness Index measures globalization in terms of international trade, capital, information and the flow of people. It is unique in that it measures both the size of countries’ international flows relative to their domestic activity (“Depth”) and their geographic reach around the world (“Latitude”). The DHL Global Connectedness Index comprises more than 3.5 million data points on country-to-country flows from 2001 to 2020.
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The press release for download and further information can be found at dhl.com/gci and dpdhl.com/pressreleases
Note to editors:
Despite the recent COVID-19 outbreak in Vietnam, the country is showing signs of regaining its economic and production dynamism. Vietnam Resilience to the effects of the 2020 pandemic meant she was able to recover quickly. The economy grew 2.9 percent last year and the export value rose 28.4 percent year over year in the first half of 2021, making it a rare economic success story during the pandemic. Vietnam is an emerging star in global manufacturing. Its close to China and the location along regional shipping routes are just as advantageous as the strong international network. Read more about this under the logistics of things: Vietnam rises as a production star.
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New York University Located in the heart of Greenwich Village and closely associated with the city for which it is named, the Stern School of Business is one of the The United States’ leading management schools and research centers. NYU Stern offers a broad portfolio of transformation programs for graduates, undergraduates and executives, all of which are enriched by the dynamism and extensive resources of one of the world’s economic metropolises. NYU Stern is a welcoming community that inspires its members to embrace and drive change in a rapidly changing world. Visit www.stern.nyu.edu.
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