Malaysia’s performance in
DHL GLOBAL CONNECTEDNESS
INDEX 2012
1
MALAYSIA’S PERFORMANCE IN
DHL GLOBAL CONNECTEDNESS INDEX 2012
1.0
INTRODUCTION
1.1
DHL released the Global Connectedness Index 2012, its second edition on
12th November 2012 in Barcelona.
1.2
This report measures and analyses the global connectedness of 140 countries,
covering 99% of the world’s GDP and 95% population. It measured the depth
and breadth of countries’ trade, capital, information and people flows. 12 distinct
components of connectedness are incorporated across those four pillars, with
historical coverage back to 2005. More than one million data points were
included into the calculation of this year’s DHL Global Connectedness Index
1.3
The DHL Global Connectedness Index is based entirely on hard data in order to
separate the facts about global connectedness from commonly held myths. It
relies on the most recent data available, which for most components are from
2011. It focuses on measures of actual international flows (and stocks cumulated
from prior flows) so as to distinguish clearly between connectedness and its
enablers. This makes it more useful for policy analysis than globalization indices
that mix flows and enablers together.
1.4
The top ranked countries overall on this year’s DHL Global Connectedness Index
are, the Netherlands, Singapore, Luxembourg, Ireland, Switzerland, the United
Kingdom, Belgium, Sweden, Denmark and Germany.
1.5
Europe is the top ranked region on the people pillar. The East Asia & Pacific
region tops the trade pillar and North America leads on the capital and
information pillars.
1.6
In terms of the depth and breadth dimensions of overall connectedness, the
leading countries and territories with respect to the depth of their international
connections are Hong Kong (China), Singapore, Luxembourg, Ireland, and the
Netherlands.
1.7
The countries with the broadest connections with the rest of the world are the
United Kingdom, the United States, the Netherlands, Switzerland, and Germany.
1.8
Overall, richer countries tend to have deeper and broader global connections
than poorer countries. Smaller countries tend to lead on depth while larger
countries tend to lead on breadth.
2.0
MALAYSIA’S PERFORMANCE
2.1
Malaysia maintained its position and score in DHL Global Connectedness Index
2012 at 16th out of 140 countries, with the score of 66/100. Malaysia’s overall
performance is shown in Appendix 1.
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2.2
Malaysia is strongest on the Trade pillar, where it ranks 4th worldwide particularly
notable in light of the fact that 7 of the top 10 countries on this pillar are located in
East Asia & Pacific.
2.3
In terms of overall connectedness, Malaysia ranks higher on depth which is
ranked 10th worldwide than breadth at 41st (2010: 43rd) position as shown in
Table 1.
Table 1: DHL Global Connectedness Index 2012 (Key Scores and Trends)
Rank
Score
2011
2010
Change
2011
2010
Change
Overall
16/140
16/140
0
66/100
66/100
0
Depth
10/140
10/140
0
36/50
37/50
-1
Breadth
41/140
43/140
2
30/50
30/50
0
Trade Pillar
4/140
4/140
0
86/100
86/100
0
Capital Pillar
32/66
32/66
0
50/100
50/100
0
Information Pillar
41/101
40/101
-1
63/100
63/100
0
People Pillar
49/106
49/106
0
53/100
53/100
0
2.4
China (14%), Singapore (13%) and Japan (12%) are the top three exports
destination for Malaysia. Among the major exports products are electronic
equipment, petroleum and liquefied natural gas.
2.5
Among 22 Asia Pacific countries, Malaysia is ranked 5th ahead of Taiwan (21st),
Australia (30th), New Zealand (33rd) and Japan (42nd) as shown in Table 2.
Table 2: DHL Global Connectedness Index 2012 for Asia-Pacific Countries
RANK
COUNTRY
POSITION
2011
2010
1
Singapore
2
2
2
3
4
5
6
7
8
9
10
11
12
Hong Kong
Korea Republic
Thailand
MALAYSIA
Taiwan
Australia
Vietnam
New Zealand
Japan
India
Mongolia
12
14
15
16
21
30
31
33
42
62
67
12
15
20
16
22
28
30
36
46
64
76
3
13
14
15
16
17
18
19
20
21
22
2.6
Philippines
China
Brunei Darussalam
Bangladesh
Pakistan
Indonesia
Kyrgyz Republic
Lao DPR
Nepal
Myanmar
69
74
80
91
102
105
124
131
133
137
81
73
74
97
98
107
121
131
133
137
In the ASEAN region, Malaysia is placed 3rd after Singapore and Thailand, as
shown in Table 3.
Table 3: DHL Global Connectedness Index 2012 for ASEAN Countries
RANK
1
2
3
4
5
6
7
8
9
COUNTRY
Singapore
Thailand
MALAYSIA
Vietnam
Philippines
Brunei Darussalam
Indonesia
Lao DPR
Myanmar
POSITION
2011
2010
2
15
16
31
69
80
105
131
137
2
20
16
30
81
74
107
131
137
3.0
HIGHLIGHTS FROM THE DHL GLOBAL CONNECTEDNESS INDEX 2012
3.1
DHL Global Connected Index 2012 has highlighted 10 key-takes away, as below:
i.
The world today is less globally connected than it was in 2007. 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.
ii.
Capital markets are fragmenting and services trade is stagnant. 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.
iii.
Global connectedness is also weaker than is commonly perceived, which
softens and even reverses some widespread fears about globalization.
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3.2
iv.
Distance and borders still matter – even online. Most international flows
take place within rather than between regions. Even online connections
are mainly domestic and decline with distance.
v.
Europe is the world’s most globally connected region: a reminder of what
EU integration has managed to achieve – and what its fragmentation
might put at risk. The Netherlands retains the top rank on this year’s DHL
Global Connectedness Index, and 9 of the 10 most connected countries
are in Europe.
vi.
Sub Saharan African countries averaged the largest connectedness
increases. Sub-Saharan Africa remains the least connected region, but
the top 5 countries in terms of connectedness increases over the past
year were all in this region.
vii.
Potential gains from boosting global connectedness can reach trillions of
dollars. As global growth slows and much of the world struggles with its
debts, increasing global connectedness can accelerate growth.
viii.
Every country has untapped possibilities to benefit from more
connectedness. Even in the most connected countries, most activities
that could take place either within or across borders are domestic, not
international.
ix.
Countries’ domestic and international policies can help them connect more
and identifies a broad array of policy levers that have been shown to
deepen connectedness.
x.
The world’s shifting economic center of gravity reshapes industry
connectedness, with significant business implications as shown in this
report’s analyses of the mobile phone, passenger car, and pharmaceutical
industries.
Performance of East Asia & Pacific Region
i.
East Asia & Pacific averaged the third highest level of overall global
connectedness and was the region with the second largest increase in
connectedness from 2010 to 2011.
ii. East Asia & Pacific has balanced strength across both depth and breadth,
with trade clearly standing out as its strongest pillar (on which it is the top
ranked region).
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iii. Countries in this region have in large part pursued export oriented economic
development strategies, complemented by private sector-led development of
integrated multi-country production chains across the region.
iv. The prevalence of regional production chains in East Asia & Pacific
contributes to the region’s second place rank, behind Europe, on the intraregional proportion of its trade flows.
v. East Asia & Pacific’s achievement of the world’s second largest increase in
connectedness from 2010 to 2011 was driven in large part by the fact that it
was the only region to increase its connectedness on the capital pillar, while
the average country in every other region saw its connectedness on this pillar
decline.
4.0
METHODOLOGY
4.1
Global Connectedness refers to the depth and breadth of a country’s integration
with the rest of the world, as manifest by its participation in international flows of
products and services, capital, information, and people.

Depth refers to the size of a country’s international flows as compared to a
relevant measure of the size of its domestic economy. It reflects in simple
terms how important or pervasive interactions with the rest of the world
are in the context of business or life in a particular country.

4.2
The definition of global connectedness used here also identifies four specific
categories of flows that are covered as the four pillars of the index. The pillars
are:




4.3
Breadth measures how closely a country’s distribution of international
flows across its partner countries matches the global distribution of the
same flows in the opposite direction. The breadth of a country’s
merchandise exports, for example, is measured based on the difference
between the distributions of its exports across destination countries versus
the rest of the world’s distribution of merchandise imports.
Trade Pillar (products and services);
Capital Pillar;
Information Pillar; and
People Pillar
Within these four pillars, individual types of flows become the component building
blocks from which the index is built up. The components are:
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











Merchandise Trade;
Services Trade;
Foreign Direct Investment (FDI) Stocks;
Foreign Direct Investment (FDI) Flows;
Foreign Portfolio Equity Stocks;
Foreign Portfolio Equity Flows;
International Internet Bandwidth;
International Telephone Call Minutes;
Trade in Printed Publications;
Migrants (foreign born population);
International Tourists (departures and arrivals); and
International Students
4.4
DHL Global Connectedness Index 2012 by components and weight assigned as
shown in Table 4.
4.5
At the pillar level, if more than 30% of the depth components (by weight) or if
more than 50% of the breadth components (by weight) are missing, then the
pillar score is not displayed.
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Appendix 1
MALAYSIA PERFORMANCE IN THE DHL GLOBAL CONNECTEDNESS INDEX (OVERALL)
4.6
For the overall index, if more than 33% of the depth components (by weight) or if
more than 50% of the breadth components (by weight) are missing, the overall
index is not computed, and the country is dropped from the analysis.
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Appendix 2
MALAYSIA PROFILE IN THE DHL GLOBAL CONNECTEDNESS INDEX
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