The World’s Most Connected Economy

Globalization is a contributor to international trade, migration, and cultural diffusion. In 2001 DHL introduced an index that ranks nations on connectedness using various parameters. Over the years the Netherlands has consistently emerged at the top of the index. The DHL Global Connectedness Index measures trends using the international flows of 4 variables. These are trade, capital, information, and people. The 2020 edition is the seventh in the series. It was prepared in collaboration with the New York University Stern School of Business. The 2020 index used over 3.5 million data points to evaluate trends in 169 countries. Each country’s global connectedness is based on 2 broad metrics. First is the size of its international flows in relation to the size of its domestic economy (‘depth’). The second is the degree to which its international flows are dispersed globally (‘breadth’).

The Netherlands’ economy

According to the IMF the Netherlands was the world’s seventeenth largest economy in 2019. With a per capita income of EUR 49,000 (nearly $60,000), it is also one of the world’s richest countries. Vast communities of migrants live and work in the Netherlands. Their priority is to support their families back home with remittances sent via the Ria Money Transfer App and similar channels. Migrants play an important role in the country’s prosperity. The prosperous Dutch economy relies heavily on foreign trade, a highly interconnected transportation system, and efficient logistics services. Rotterdam is the biggest port in Europe. Amsterdam is home to one of Europe’s biggest airports. The Netherlands has ranked number 1 on every edition of the DHL index since it was introduced. This impressive performance is owed to the country’s unique geography, regional integration with neighbors, and a culture of openness.

Connectivity, logistics, and the Dutch economy

The DHL index shows that Europe is the most globally connected region in the world. The top 10 countries in the 2019 ranking are the Netherlands, Singapore, Belgium, UAE, Ireland, Switzerland, Luxembourg, UK, Denmark, and Malta. 7 of the top 10 are in Europe. According to investinholland.com the Netherlands is the gateway to Europe. Its central geographic location makes it an obvious center for transit. The country’s advanced logistics infrastructure offers businesses unique access to Europe and beyond. The Netherlands is home to big logistics brands like DHL, Cisco, and others. Organizations can access as many as 160 million consumers within 24 hours of Amsterdam or Rotterdam via rail, road, or water. The Netherlands is home to several European and regional distribution centers across industries including fashion, agri/food, and medical technology.

Prior to the COVID-19 lockdowns the Netherlands continued to attract migrants from all over the world. Statistics Netherlands (CBS) indicated that in July 2019 there were 113,000 formal migrants in the country. This was an increase from 101,000 in 2018. European migrants accounted for the majority of the inflow. However, since the start of COVID-19 measures in March 2020 the number of incoming migrants declined by 50%.

Migration in a globalized economy

An increasingly interconnected world presents significant opportunities for migrants. In ‘International Migration 2020 Highlights’ the UN Department of Economic and Social Affairs notes that 87 million international migrants resided in Europe in 2020, the highest among the world’s major regions. The UAE was the fourth-ranked country in the 2019 DHL index. It was also among the top remittance sending countries as of 2018 (IOM). Remittances from the UAE in 2018 amounted to around EUR 36 billion (USD 44.4 billion).

We no longer live in ordinary times. In October 2020 the International Bank for Reconstruction and Development (IBRD) noted that “this year, for the first time in recent history, the stock of international migrants is likely to decline as new migration has slowed and return migration has increased.” Remittances by migrant workers are expected to decrease by 14% in comparison to 2019. Europe is expected to record the highest decline (16%). With the vaccination drives underway and restrictions being eased, migrants are gradually returning to their jobs. As the world’s most connected economy, the Netherlands is a model for others to follow.