Economy

International trade, capital, and information flow on track to recovery post-Covid-19 setback: DHL report

Mumbai | Updated on December 05, 2020

Globalisation is on track to recovery after facing a major setback due to the Covid-19 pandemic, according to the DHL Global Connectedness Index 2020 report.

DHL and the NYU Stern School of Business released the seventh edition of its DHL Global Connectedness Index 2020 (GCI). The report tracks international flows of trade, capital, information and people across 169 countries and territories

As per the report, “International trade has rebounded strongly after a sharp plunge at the onset of the pandemic and remains a vital backbone for economies worldwide.”

Overall, current forecasts predict that the global connectedness index will fall significantly in 2020 due to the distancing effects of Covid-19 on societies. These include border closures, travel bans and passenger airlines.

However, international trade and capital flow are recovering strongly despite the negative impact on tourism. The lack of in-person contact and the acceleration of digitalisation has also led to an increase in international data flows, boosting international internet traffic, phone calls and e-commerce..

“The current crisis has shown how indispensable international connections are for maintaining the global economy, securing people's livelihoods and helping companies strengthen their trading levels,” said John Pearson, CEO of DHL Express.

“Connected supply chains and logistics networks play an essential role in keeping the world running and stabilizing globalization especially at a time of a crisis that spans our globe. This reminds us of the need to stay prepared for any challenge. The recent vaccine breakthrough has put a spotlight on the systemic importance of fast and secure medical logistics dependent on a worldwide interconnected network that effectively ensures international distribution.”

GCI lead author Steven A. Altman, Senior Research Scholar and Director of the DHL Initiative on Globalization at the NYU Stern School of Business said, “Stronger global connectedness could accelerate the world’s recovery from the COVID-19 pandemic, as countries that connect more to international flows tend to enjoy faster economic growth.”

Talking about India, Altman said, “India's global connectedness has remained fairly stable over the last few years. So, no big increases, but no big decreases and connectedness for India.”

“If we look at India's level of connectedness versus excellence, India has been outperforming on the capital information and people parts. But the trade part is still below what we would predict. If we look forward in terms of prospects for recovery, that would highlight the possibility of untapped potential for further trade growth, to accelerate recovery in India,” Altman added.

“India has enormous potential as being one of our top five or six markets for many years,” said Pearson.

“It's growing well. It had an extremely difficult period in COVID, where we just had to knuckle down and continue to reinforce the regulatory instructions we were getting, but we have great open potential for India,” he added.

Published on December 05, 2020

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