The more balanced picture for growth is reflected in the 2015 Agility Emerging Markets Logistics Index, an annual data-driven ranking of 45 emerging economies accompanied by a separate survey of nearly 1,000 global logistics and supply chain executives.
The Index, now in its sixth year, ranks emerging markets based on their size, business conditions, infrastructure and other factors that make them attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution companies.
Large BRICS nations Brazil, Russia, India, China and South Africa have accounted for much of the growth and investment in emerging markets and have dominated the Index. Saudi Arabia climbed to No. 2 in the 2015 Index, ranking behind only China, which has 47 times the population and 12.5 times the economic output.
Gulf states UAE, Qatar and Oman, ranked as having the best “market compatibility” – the most ideal business conditions – among the 45 countries in the Index. They were followed by Uruguay, Saudi Arabia and Morocco.
UAE, Malaysia, China, Oman, Saudi Arabia and Chile led in “connectivity,” indicating they have the best infrastructure and transport links among emerging economies.
“Infrastructure investment and structural reforms that improve the climate for businesses have positioned Saudi Arabia, the UAE, Qatar and Oman to weather the downturn in energy prices,” said Elias Monem, CEO Middle East and Africa for Agility Global Integrated Logistics. “They continue to pursue smart policies that will help them diversify and make them more inviting to the logistics industry as consumer markets and logistics hubs providing high-value supply chain services.”
Next-tier economies Indonesia (No. 4 in the Index), Nigeria (27), Bangladesh (28) and Pakistan (25) – all with populations topping 100 million – climbed in the Index rankings. The other large non-BRICS market – Mexico — held steady at No. 9.
Elsewhere in the Gulf, Kuwait slipped three spots to No. 21 in the Index, and Bahrain fell two to No. 24. To close the gap with its Gulf neighbors, Kuwait needs to accelerate infrastructure investment and economic reform. Bahrain posted strong growth in the first half of 2014 but continues to deal with the aftermath of sectarian tension.
The picture was mixed for non-Gulf countries of the Middle East. Jordan slipped five spots to 29 in the Index despite strong scores for its business conditions. Jordan has been affected by fighting in neighboring Syria and Iraq, its largest trading partner. Lebanon, also affected by fighting in Syria, fell two spots to No. 42. Turkey, which has a much larger and more diversified economy, was more resilient, holding steady at No. 10 despite fighting on its southern border, concerns about the falling lira and internal political tension.
In North Africa, relatively stable Algeria leaped three spots to No. 34, but Algeria has yet to feel the full brunt of falling oil prices, which have added urgency to calls for economic diversification. Egypt’s slide continued. It dropped from No. 28 to No. 32 despite signs that the current government has halted the decline that began in 2011. Even so, many analysts forecast a strong recovery for Egypt in 2015, and the relative stability brought about by the government has prompted a reconsideration of the country’s prospects among logistics and supply chain executives. It climbed four spots in the survey to No. 20 among markets thought to be emerging as major logistics markets.
Elsewhere, Tunisia (No. 35) shows signs of stabilizing in the wake of political upheaval but is feeling the spillover of ongoing violence in neighboring Libya. Libya, torn by extremism and militia fighting, experienced the biggest slide of any country in the Index, falling seven spots to No. 40.