DHL study says globalisation evolving, not declining
THE world continues to be highly globalised despite headwinds in geopolitics and trade, says the latest DHL Global Connectedness Index
THE world continues to be highly globalised despite headwinds in geopolitics and trade, says the latest DHL Global Connectedness Index.
The device put together by leading forwarder DHL and the New York University's Stern School of Business, dipped slightly in 2018. But despite this, results indicate the world experienced an evolution of globalisation, not a decline.
The index, which looks at international flows of capital, trade, information, and people, dipped to 121 points from a record high of 124 in 2017, reported London's Air Cargo News.
This decline was driven by weak capital flows while the flow of trade, information and people all improved.
'International exchange empowers people and businesses around the world to collaborate and seize new opportunities,' said DHL Express chief executive John Pearson.
'While current geopolitical tensions could seriously disrupt global connectedness, this 2019 update finds that most international flows have remained surprisingly resilient so far.
'Ultimately, what we're seeing today is the evolution of globalisation, not its decline. Decision-makers need to be careful to not overreact to strong rhetoric or headlines,' he said.
This update of the DHL Global Connectedness Index was calculated based on more than 3.5 million data points on country-to-country flows.
Said NYU scholar Steven Altman: 'Our analysis does not confirm a robust regionalisation trend. Instead, we see that the average distance across which countries trade has held steady since 2012.
'While fraying relations between major economies could lead to a fracturing along regional lines, such a shift has not yet conclusively taken place,' said Mr Altman, lead author of the report.
The report found that while trade flows continued to intensify through the early stages of the US-China trade war in 2018, this strength did not extend into 2019.
In the first half of this year, the share of global output traded across national borders fell. While trade volume growth is likely to remain positive this year, it is not expected to keep pace with GDP growth.