A current study of logistics service provider DHL shows an interesting result: The world is less globally connected today than it was in 2007, according to the Global Connectedness Index. It measures and analyzes the global connectedness of 140 countries, covering 99% of the world's GDP and 95% of its population. The index is influenced by the depth and breadth of countries' trade, capital, information and people flows. Is this result still a consequence of the global financial crisis of 2007?
Let's have a short view into details. While merchandise trade has staged a strong recovery since 2009, its growth is slowing, and the intensity of services trade has stagnated. Capital markets are fragmenting, as investors keep more of their funds at home and target their foreign investments more narrowly. Information flows continue to expand, while people flows have barely grown since 2005. Focusing on single countries their global connectedness is varying widely. The top ranked countries are the Nederlands, Singapore, Luxembourg, Ireland, Switzerland, the UK, Belgium, Sweden, Denmark and Germany. So, 9 of 10 top ranked countries are located in Europe - by hazard?
The top North American country is the US, ranked 20th. Australia holds the 30th position, Morocco is the highest ranked African country in 38th place and Chile is the top ranked South American country at 41st place. The results is pretty clear regarding the fact that richer countries tend to have deeper and broader global connections than poorer countries. No region in the world contains a larger amount of well developped countries and economies than Europe allowing their citizens to travel and trade within the whole continent imposing almost no regulations.
Nevertheless the economic activity has shifted towards the emerging markets since the onset of the financial crisis. 72% of GDP growth around the world from 2008 to 2011 took place in emerging market countries, and according to IMF projections, these countries will deliver about 60% of growth from 2012 to 2017. It will be exciting to observe if global connectedness will shift in a similar way.
Let's have a short view into details. While merchandise trade has staged a strong recovery since 2009, its growth is slowing, and the intensity of services trade has stagnated. Capital markets are fragmenting, as investors keep more of their funds at home and target their foreign investments more narrowly. Information flows continue to expand, while people flows have barely grown since 2005. Focusing on single countries their global connectedness is varying widely. The top ranked countries are the Nederlands, Singapore, Luxembourg, Ireland, Switzerland, the UK, Belgium, Sweden, Denmark and Germany. So, 9 of 10 top ranked countries are located in Europe - by hazard?The top North American country is the US, ranked 20th. Australia holds the 30th position, Morocco is the highest ranked African country in 38th place and Chile is the top ranked South American country at 41st place. The results is pretty clear regarding the fact that richer countries tend to have deeper and broader global connections than poorer countries. No region in the world contains a larger amount of well developped countries and economies than Europe allowing their citizens to travel and trade within the whole continent imposing almost no regulations.
Nevertheless the economic activity has shifted towards the emerging markets since the onset of the financial crisis. 72% of GDP growth around the world from 2008 to 2011 took place in emerging market countries, and according to IMF projections, these countries will deliver about 60% of growth from 2012 to 2017. It will be exciting to observe if global connectedness will shift in a similar way.
