DHL Express report says globalisation resilient but geopolitical threats rising

DHL Global Connectedness Report Ranking 2024

The latest DHL Global Connectedness Index (GCI) rebutted the notion that a major retreat from globalisation is underway and underscored the potential of a more connected world.

"Globalisation reached a record high in 2022 and remained close to that level in 2023," said the DHL Global Connectedness Report 2024 released by DHL and New York University’s Stern School of Business.

The report added, "The resilience and growth of international flows of trade, capital, information, and people in the face of recent crises strongly rebuts the notion that globalization has gone into reverse."

After a slight decline in 2020, the composite DHL Global Connectedness Index rose back to above pre-pandemic levels in 2021.

However, the report added that the current level of 25 percent means that even after decades of globalisation, global trade is still closer to a world of separate countries than a completely globalized world.

"Without policy constraints, there is ample scope for countries to continue growing their international flows," the report said.

India has improved its global connectedness rank by 5 positions to reach 62 out of 171 countries from the previous 67.

"India's current level of globalization is consistent with what our models predict, given the country's large size and other structural characteristics in India has especially high potential to move up in its globalization level moving forward," said Steven A. Altman, senior research scholar and director of the DHL Initiative on Globalization, NYU Stern.

India is mentioned as the top-ranked partner for Middle East & North Africa with 9 percent of its total flows while also noting that the intra-regional integration of South & Central Asia region is constrained by the animosity between two of its largest economies, India and Pakistan.

The report is based on an analysis of nearly 9 million data points on country-to-country flows; it provides the most comprehensive available portrait of how goods & services, people, capital, and information are moving around the world, the report said.

Singapore was ranked the most globally connected country overtaking The Netherlands. The UK has the most globally distributed flows. Among the 55 most globally connected countries, there are representatives from every world region.

However, the report added that the US-China ties continue to diminish.

"The shares of both countries’ flows involving the other have fallen by about one-quarter since 2016. The pullback from direct US–China trade accelerated in 2023. But the U.S. and China are still connected by larger flows than almost every other pair of countries," the report said.

Furthermore, the report mentions that Russia and Europe have also decoupled, severing ties formerly deemed critical to both sides.

"Russia’s trade shifted away from Western-aligned countries, and foreign investment into Russia collapsed. Among major G20 economies, Russia had the largest single-year drop in global connectedness on record in 2022," the report said.