UAE ranks 6th in global connectedness index, DHL to open new hub in Abu Dhabi

Sajjad Ahmad, Deputy Business Editor

The UAE ranked 6th among 171 countries in the recently-released DHL Global Connectedness Index 2022. The findings were revealed during a press conference in Dubai by DHL and New York University's Stern School of Business.

According to the report, Netherlands remains the most globalised country followed by Singapore and Belgium respectively. Switzerland and Ireland stood at the 4th and 5th positions in their connection to the world, the data showed in the index.

The index provides reliable findings on globalisation trends by analysing 13 types of international trade, people, capital and information flows.

John Pearson, CEO of DHL Express said, "The UAE is one of the solid growth story in the world and an important hub for global trade and connectedness. The country plays big role in facilitating the flow of trade and people movement as it offers one of the best infrastructure in the world."

He added, "The pace of the UAE trade growth is remarkable and innovative approach has made the country an attraction to global businesses. For the DHL Express, the country is very vital and we are going to open our second hub in Abu Dhabi in the next few month as well as expanding our Meydan facility."

He further said, "The increase in outbound and inbound flights from Dubai to the world and particularly Asia make the UAE is one of the important hub for global trade."

The index presented an in-depth report on the state of globalization and its prospects. Analyzing data from 171 countries and territories, it reveals how flows of trade, people, capital, and information move around the world.

The report shows that international flows have been remarkably resilient in the face of recent shocks such as the Covid-19 pandemic and the war in Ukraine. After a slight decline in 2020, the composite DHL Global Connectedness Index rose back to above pre-pandemic levels in 2021. The currently available data points to a further increase in 2022, despite slower growth in some flows. International trade in goods was 10 per cent above pre-pandemic levels in mid-2022. International travel remained 37 per cent below 2019 levels in 2022, but doubled compared to 2021.

“The latest DHL Global Connectedness Index data clearly debunks the perception of globalization going into reverse gear," John Pearson concluded. "Globalization is not just a buzzword, it?s a powerful force that has transformed our world for the better. By breaking down barriers, opening up markets and creating opportunities, it has enabled individuals, businesses and entire nations to flourish and thrive like never before. As we continue to embrace globalization, we can build a brighter future that benefits us all, creating a world that is more interconnected, more prosperous and more peaceful than ever before."

US and China: The DHL Global Connectedness Index provides evidence that the US and China are decoupling in many fields. Looking at 11 types of trade, capital, information, and people flows (such as merchandise exports, M&A transactions, and scientific research collaboration), the share of US flows with China declined for 8 out of 11 types since 2016. In the same period, the share of China?s flows with the US decreased for 7 out of 10 types with data available for China. Several of these were large declines. Nonetheless, the US and China are still linked by far greater flows than any other two countries that do not share a border. Further, the data shows that, so far, the decoupling between these two countries has not led to a broader fragmentation of global flows between rival blocs of countries.

Regionalization: The index also shows that predictions of a shift from globalization to regionalization have not - at least yet - come to fruition. The average distance traversed by trade, capital, information, and people flows has increased over the past two decades, and trade flows even stretched out over longer distances during the Covid-19 pandemic. The only category that displays a clear recent shift toward regionalization is people flows. This is due to the dramatic change in travel patterns during the Covid-19 pandemic.

"It remains an open question whether trade patterns will become significantly more regionalized in the future," said Steven Altman, Senior Research Scholar and Director of the DHL Initiative on Globalization at NYU Stern's centre for the Future of Management. "Many companies and governments are focused on nearshoring to regionalise supply chains, and there are substantial business benefits that can come from regionalization. On the other hand, more than half of all trade already happens within regions, and the benefits of long-distance trade are still important, especially as inflation remains high, economic growth has slowed, and container shipping rates have come back down."