Regional supply chains played a vital role in propelling four Asian countries to the top five of a list of countries that are punching above their weight when it comes to connectedness.
Cambodia, Malaysia, Singapore, and Vietnam were, alongside Mozambique, the top five “outperforming” nations in the DHL Global Connectedness Index (GCI) – a detailed analysis of globalisation, measured by international flows of trade, capital, information and people.
Cambodia, Malaysia, Singapore and Vietnam beat expectations by the widest margin, which the report said reflected “improved supply chain networks within the region and ASEAN policy initiatives promoting economic integration”.
Singapore remained the world’s second most-connected country, behind the Netherlands, and was the only Asia Pacific country to feature in the top 10 ranking. Myanmar saw the biggest improvement and leapt 23 spots to 133rd position.
Hong Kong and Singapore took first and second place on the “depth” dimension of the index, which measures the proportion of overall physical, intellectual and human capital that crosses national borders.
Japan and South Korea ranked among the top five in global breadth – or spread – of physical, intellectual and human capital.
“While the results for Singapore, Hong Kong and the North Asian powerhouses of Japan and South Korea bring few surprises, the index highlights just how rapidly Southeast Asia is plugging into the global economy,” said Ken Lee, CEO, DHL Express Asia Pacific.
“The establishment of the ASEAN Economic Community in late 2015 appears to have brought significant improvements to trade flows, particularly with reductions in trade tariffs and better access to ports and logistic hubs.”
Lee said the outperformance of emerging markets such as Cambodia and Vietnam, as well as Malaysia’s unexpectedly solid performance in the face of local economic uncertainty, suggested that ASEAN economies will grow even amidst broader global volatility.
“While business leaders still face hurdles to greater breadth and depth of trade connectivity, some challenges like infrastructure, technology and skills training are already being addressed jointly by governments and industry.”
The overall top five most globally connected countries were the Netherlands, Singapore, Switzerland, Belgium and the United Arab Emirates.
It said that despite Southeast Asia’s rapid advances in trade connectivity, the Asia Pacific region remains less connected to the rest of the world overall than other regions.