SINGAPORE – Despite the coronavirus pandemic and the disruption in trade and capital flows and economic downturn it caused this year, Singapore has been ranked the world’s second most-connected country.
It was ranked first for the size of its international flows in goods, capital, information and people relative to its domestic economy in the 2020 edition of the DHL Global Connectedness Index (GCI).
But Singapore missed out on the top spot in the overall GCI ranking to the Netherlands, which scored a total of 91 points, by just two points. Both the countries maintained their positions on the list from the previous edition.
The GCI – compiled every alternative year by the Deutsche Post DHL Group in collaboration with the New York University Leonard N. Stern School of Business – is a detailed analysis based on more than 3.5 million data points that track the globalisation of 169 countries.
The other top 10 positions in the overall ranking were taken by Belgium, the United Arab Emirates, Ireland, Switzerland, Luxembourg, the United Kingdom, Denmark and Malta.
The GCI also has two separate rankings that measure each country’s global connectedness based on the size of its international flows relative to the size of its domestic economy – referred to as “depth” – and the extent to which the flows are distributed globally – or “breadth”.
The depth leaders – economies with the highest proportions of flows crossing national borders – are Singapore, Hong Kong, Belgium, the Netherlands and Estonia.
The breadth champions – countries with the most global flow patterns – are the United Kingdom, the United States, the Netherlands, Israel and South Korea.
Referring to the coronavirus pandemic that swept the world this year and increased the distance between nations, companies and individuals, the GCI 2020 report was titled “The State of Globalisation in a Distancing World”.
Mr Steven A. Altman, senior research scholar at NYU Stern and director of the DHL Initiative on Globalisation, said that while social distancing has been essential for public health, the pandemic exacerbated geopolitical and societal fault lines, compounding the challenges of controlling the spread of Covid-19 and keeping economies functioning.
Globalisation did not collapse in 2020, but the pandemic did transform – at least temporarily – how countries connect, he said. So as travel plummeted, digital flows surged. International trade and investment took strong hits at the beginning of the pandemic and then started to recover, he noted.
“My hope is that the Covid-19 jolt to globalisation will, with due reflection, focus minds on how to strengthen our connections to foster a healthier, more prosperous, and more resilient future,” said Mr Altman, who is also one of the authors of the GCI report.
According to the report, the world’s level of global connectedness is set to decline in 2020 due to the Covid-19 pandemic. However, it is unlikely to fall below levels seen during the 2008-2009 global financial crisis.
International trade rebounded strongly after a sharp plunge at the onset of the pandemic. Still, the proportion of global output crossing national borders will decline modestly in 2020.
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People flows suffered an unprecedented decline this year as nations closed borders to curb the spread of the virus. International travel is on track to fall all the way back to its 1990 level.
While debate continues about the future of globalisation, global flow data and forecasts reaffirm that the world is, and will remain, only partially globalised, the report said.
All signs point to a future where international flows will remain so large that decision-makers ignore them at their peril, even as borders and cross-country differences continue to make domestic activity the default in most areas.
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