By Sam Bridge
UAE ranks first in the region and third globally, after China and India respectively, according to the 2020 Agility Emerging Markets Logistics Index
The Gulf region is emerging as a major player in the global logistics sector despite overall pessimism about the world economy, according to new research.
Agility’s annual survey of 780 supply chain professionals reveals that 64 percent say a global recession is likely, with only 12 percent of executives saying a recession is unlikely.
Downward pressure on global trade volumes, uncertain growth prospects and the ongoing trade war between the US and China are driving this belief.
The UAE ranked first in the region and third globally, after China and India respectively, according to the 2020 Agility Emerging Markets Logistics Index.
For the first time since the launch of the index, the UAE featured in the top 10 list of all three individual sub-Indices.
The jump in the rankings is the result of the country’s continued open financial sector, transparent regulatory system and corruption protection frameworks and its progress towards a comprehensive national SME development strategy, the report said.
In the Gulf, UAE (3), Saudi Arabia (6),Oman (14), Bahrain (15) and Kuwait (19) ranked highly. Among ASEAN countries, Indonesia (4), Malaysia (5), Thailand (9) and Vietnam (11) were strong.
“The Gulf nations continue to diversify, making steady progress in streamlining regulation and realizing increased digital capabilities,” said Elias Monem, CEO of Middle East & Africa for Agility GIL. “The entire region is growing and the outlook continues to be healthy as we enter the new decade.”
The Index ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.
The countries with the least potential as logistics markets in 2020 were named as Syria, Iran, Venezuela, Iraq and Libya.
China and India, atop the 2020 rankings based on their size and strength as international and domestic logistics markets, lag behind smaller rivals in business fundamentals, a category that ranks countries based on regulatory environment, credit and debt dynamics, contract enforcement, anti-corruption safeguards, price stability and market access, the survey showed.
Forty-two percent of those surveyed said a prolonged trade standoff between the US and China could benefit Southeast Asian countries, which offer manufacturing and sourcing alternatives to China.
Despite the belief a recession is likely, emerging markets still grew an estimated 3.7 percent in 2019 and are projected by the IMF to grow 4.4 percent in 2020.