The 2012/12/24 at 09:42
Marie Luginsland, in Germany
The crisis has overturned the world order and modified the forces in place. Today, as new connections are being made, the planet’s centre of gravity has gradually shifted to new territories, such as Sub-Saharan Africa and the emerging countries. Testifying to this change is the DHL Global Connectedness Index (GCI), established for the second time by the German transport and logistics group. This assessment of globalisation, based on data collected between 2005 and 2011, reveals the connectedness between countries on a planetary scale via the circulation of capital, information and persons. The conclusion is unequivocal: today’s world is less connected than in 2007, the year when connectedness was at a height. “The GCI 2012 indicates that today’s volatile and uncertain business environment bears the lasting impact of the financial crisis,” observes Frank Appel, CEO of Deutsche Post DHL.
Certain world regions are nevertheless managing to keep their end up. While Europe remains the most globally connected region, clear-cut growth is visible in Sub-Saharan Africa. Despite remaining the region of the world to be least integrated into global exchanges, this region has made a spectacular leap between 2010 and 2011, and holds the regions with the strongest rises in connectedness: Mozambique, Togo, Ghana, Guinea and Zambia.
The 2012 edition also comprises a chapter of recommendations to States on how to promote their connectedness, a gauge of development and economic prosperity. For as explained by Professor Pankaj Ghemawat, one of the authors of the GCI, “the benefits of expanding merchandise trade are much larger than traditional models indicate. Adding to that the gains from services trade and other kinds of cross-border flows, the estimated economic benefits double to at least 8 % of global GDP.”
Another point underlined by the survey is that the epicentres of production and consumption are clearly migrating towards emerging markets, especially for three sectors of activity: pharmaceuticals, automobiles and mobile phones. As a result, businesses need to take into account a new mapping of exchanges when designing their mid- and long-term strategies. Consequently, great facility for adaptation is required from economic players, and Frank Appel urges for governments to “resist protectionist measures that hinder cross-border interactions”. He adds that “especially in this period of slow growth, it’s important to remember the tremendous gains that globalisation has brought to world citizens and to recognise it as an engine of economic progress.”
Playing the cross-border card
So nothing has been definitively acquired by Europe despite its holding nine of the world’s ten most connected countries, nor even by the Netherlands, a global champion of exchanges. For as the DHL survey indicates, although the Netherlands is the world’s most connected country, it still “has significant headroom to become more connected”. While European countries can still improve on their scores, this is particularly the case of France. This country, ranked seventeenth worldwide for connectedness, has in fact dropped three spots in the space of one year. Yet tools for optimisation exist. The survey thus highlights the reinforcement of cross-border exchanges as one of the main factors for progress. “Cross-border flows are significantly lower than commonly perceived,” notes Pakaj Ghemawat, who goes on to say that “at a time of economic weakness, this represents one of the most powerful levers available for boosting growth.” Comments Frank Appel, “Europe’s high level of global connectivity points to one of the greatest achievements of European integration. We have to remember this as talk of fragmentation enters the debate over the continent’s future.”