Netherlands surpasses Switzerland as most globalized country

The current KOF Globalization Index does not yet include the effects of the COVID-19 crisis.

Globalization backtracked a bit in 2019 due to international trade disputes. The most globalized countries in the world are Switzerland, the Netherlands and Belgium, with the Netherlands taking the position of Switzerland’s leader. The current KOF Globalization Index does not yet include the effects of the COVID-19 crisis.

Economic globalization recorded a slight decline in 2019. The trade conflict between China and the United States has been a decisive influencing factor. In the United States, this has resulted in rising costs for producers, prices for consumers, and financial hardship for farmers. In China, the trade conflict has contributed to a slowdown in the growth of economic and industrial output, which was already declining. In particular, this has led to a deterioration in the normal conditions for the globalization of world trade.

Negotiations regarding the UK’s exit from the European Union in 2019 (effective January 2020) are also expected to have a negative impact on the globalization of the economy. The full impact of Brexit should be more visible in the next edition of the 2020 index. However, globalization is supported by increased international financial interdependence. Growth in foreign debt and foreign direct investment in low- and middle-income countries remained the same as last year. Therefore a simultaneous slowdown of the world economy is reflected in an increase in the share of the latter in GDP.

Social globalization has subsided to some extent. Above all, it is the degree of interpersonal globalization, that is, the degree of individual cross-border contacts, that has fallen. The degree of political globalization was slightly higher than in the previous year. Thus, recently there has been an increase in the number of embassies and NGOs.

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country analysis

The three most globalized countries in the world are Switzerland, the Netherlands, and Belgium. Unlike the previous two years, the Netherlands is leading this year and is replacing Switzerland. In recent years, the gap between the three major countries has been very small. All three countries have high foreign trade rates and strong financial sectors. Politically, the three countries play an important role and are therefore a fixed point for many non-governmental organizations and international institutions. The Netherlands in particular is distinguished by a very high level of economic globalization. This is explained on the one hand by their role in the movement of goods through the ports of Rotterdam, where most goods from Europe are shipped. On the other hand, the Netherlands, like Switzerland, are attractive financial places for businesses and the financial sector. Brexit should also have given a positive impetus to the Netherlands to make up for the loss of the United Kingdom.

future prospects

As the index data spans only 2019, the impact of the COVID-19 crisis, which began in 2020, is not yet included in the current KOF Globalization Index. , KOF expects international trade to decline during the COVID-19 crisis, however. “It is especially for the year 2020 that we expect a reduction. We also saw a decline in business during the financial crisis. The deciding question is what will happen next,” said KOF director Jan-Egbert Sturm.

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