Singapore achieved high rankings in DHL’s second annual Global Connectedness Index (GCI), a detailed country-by-country analysis of the cross-border flows that connect the world’s economies.
Singapore emerged as the top-ranked country in trade, capital, and people flows; and second in information flow in the East Asia & Pacific region. On a global level, Singapore ranked second overall and is among the top 10 countries on all four pillars of the index.
The GCI seeks to uncover the true potential of global connectedness and measures against 12 different types of flows across four pillars - trade, capital, information and people. One hundred and forty countries were ranked according to the depth and breadth of their integration into the world economy from 2005 to 2011
“The study gives an in-depth assessment of our connectedness and helps us identify the opportunities for market growth. The findings consistently reveal that Singapore plays an integral role in the region’s development as a key trading hub, and is well-positioned to further develop mutually beneficial economic opportunities with other countries,” said Yasmin Aladad Khan, Senior Vice President, DHL Express South East Asia.
Singapore’s strong showing in the Trade pillar highlighted the country’s reputation as a major trade hub. In 2011, Singapore’s merchandise exports were 158% of its GDP; exported services were worth 48%; and major export products were machinery and equipment, pharmaceuticals, and refined petroleum. The country’s key trade partners include Malaysia, Hong Kong, Indonesia and China; correlating with Singapore’s partnerships with other Asian countries through free trade agreements, such as the China-Singapore Free Trade Agreement (CSFTA) and the ASEAN Free Trade Area (AFTA).
Scores on the capital and people pillars also revealed Singapore’s winning streak.Eighty-one percent of Gross Fixed Capital Formation in Singapore was accounted for by Inward Foreign Direct Investment (FDI), and 31% of Singapore’s inward FDI stocks came from within East Asia & Pacific. In terms of population, 94% of people born in Singapore still reside there, and among the 6% who have migrated outside the country, 59% remain in East Asia & Pacific.
Singapore’s depth on the information pillar is also exceptional, leading the world in terms of both international telephone call minutes and imports and exports of printed publications on a per capita basis. In the study, Singapore’s overall No. 2 ranking among the top 10 countries on the four pillars of the index puts it ahead of matured economies such as Switzerland, Hong Kong and the United States.
The city’s achievement, which saw the second largest increase in connectedness from 2010 to 2011, underscores the strong trade relations with trade entities such the European Union (EU). EU-Singapore trade achieved a high of 41% between 2009 and 2011 and was worth a whopping €76 billion in 2011.
Global connectedness was hit hard at the onset of the financial crisis and despite modest gains since 2009 has yet to recapture its pre-crisis peak, according to the report. Global connectedness is also weaker than is commonly perceived, which softens and even reverses some widespread fears about globalisation.
While merchandise trade has recovered robustly since 2009 and information flows continue growing, capital connectedness is on a declining trend and the intensity of services trade has not risen since 2009.