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The world is still more connected than at almost any other point in history, according to the DHL Global Connectedness Index (GCI).

The Index, which measures key developments in the global flow of capital, trade, information and people from 2001 to 2018, was updated by DHL and the NYU Stern School of Business last week, based on 3.5 million country-to-country data points.

Despite pressure from global geopolitics and some trade shrinkage in 2018, the GCI remained close to the record high of globalisation measured in 2017. Trade volume growth dropped in the first half of 2019 but only a modest decline is predicted for 2020.

Globalisation not in decline, according to DHL
Credit: NASA

“Our analysis does not confirm a robust regionalization trend,” said Steven A. Altman, lead author of the report and Senior Research Scholar at NYU Stern. “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.”

However, all four flows are up against “powerful headwinds” in the form of trade barriers and uncertainty, the report said.

It also noted that “a survey on globalization perceptions reveals that many people do not realize how limited global connectedness actually is. While the world is more connected than at almost any previous point in history, most business still takes place within rather than across national borders.”

This can lead to a distorted view of globalisation that affects decision-making, said the report.

Source: Deutsche Post DHL Group

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