DHL has released the fifth edition of the DHL Global Connectedness Index (GCI), which ranks the UAE as the fifth most connected in the world after major logistics hubs like the Netherlands, Singapore, Switzerland and Belgium.
The DHL Global Connectedness Index is a detailed analysis of globalisation, measured by international flows of trade, capital, information and people.
This year’s rank puts the UAE five places above where it was last year, and represents the highest rank achieved yet by a country from the Middle East and North Africa region.
The Middle East and North Africa is the world’s third-most connected region, behind Europe and North America.
“While oil exports continue to underpin the Emirates’ connectedness to the global economy, the establishment of free trade zones like the ADAFZ has attracted businesses worldwide, serving as a strategic hub and gateway to Abu Dhabi, the UAE and the wider region, ” said Nour Suliman, CEO Middle East and North Africa, DHL Express.
“Increased trade from companies based in these zones have directly contributed to the rise in the UAE’s non-oil foreign trade in sectors like aviation, pharmaceuticals, technology and e-commerce, accounting for 62% of total trade,” he added.
Over the past few years, deals with key partners like Saudi Arabia have reached US $10 billion, while UAE-India trade partnerships are expected to cross US $100 billion by 2020.
“The region continues to face geopolitical headwinds as well as issues around quality and reliability of infrastructure, but things are changing thanks to new policies and investments from government and industry alike,” said Suliman.
DHL Express recently opened a US $5.8 million logistics facility in Jordan as part of the company’s commitment to invest US $170 million in infrastructure developments across the Middle East and Africa.
In spite of growing anti-globalisation tensions in many countries, connectedness reached an all-time high in 2017, as the flows of trade, capital, information and people across national borders all intensified significantly for the first time since 2007.
Strong economic growth boosted international flows while key policy changes such as US tariff increases had not yet been implemented.
A central theme of research by GCI co-authors Steven A. Altman and Pankaj Ghemawat is that at the global level, the world is still less connected than most people think it is, even after globalisation’s recent gains.
For example, just about 20% of economic output around the world is exported, roughly 7% of phone call minutes (including calls over the internet) are international, and only 3% of people live outside the countries where they were born.
The report also debunks the belief that distance is becoming irrelevant. Most countries are much more connected to their neighbours than to distant nations.
The GCI continues to reveal vast differences between levels of globalisation in advanced versus emerging economies.
Emerging economies trade almost as intensively as advanced economies, but advanced economies are more than three times as deeply integrated into international capital flows, five times for people flows, and almost nine times with respect to information flows.
Additionally, while leaders from large emerging markets have become major supporters of globalisation on the world stage, emerging economies’ progress in terms of global connectedness has stalled.