Emerg­ing mar­kets lo­gis­tics in­dex

Re­leas­ing the Agility Emerg­ing Mar­kets Lo­gis­tics In­dex 2016, Essa al-Saleh, Pres­i­dent and CEO, Agility Global In­te­grated Lo­gis­tics, and John Man­ners-Bell, CEO, Trans­port In­tel­li­gence, say that In­dia has risen to third rank due to the coun­try’s new lead­ers

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Climb­ing two rungs by over­tak­ing Brazil and In­done­sia, In­dia ranked third in an emerg­ing mar­kets lo­gis­tics in­dex for 2016 which rates coun­tries based on busi­ness en­vi­ron­ment. The in­dex ranks 45 lead­ing emerg­ing mar­kets us­ing three met­rics. Size and growth at­trac­tive­ness make up 50 per cent of the over­all in­dex score, while com­pat­i­bil­ity and con­nect­ed­ness ac­count for 25 per cent of the over­all in­dex score.

Essa al-Saleh, Pres­i­dent and CEO, Agility Global In­te­grated Lo­gis­tics says, “The year 2015 was char­ac­terised by fall­ing trade vol­umes, de­pressed com­mod­ity prices and geopo­lit­i­cal in­sta­bil­ity that com­bined to slow growth in emerg­ing and de­vel­oped mar­kets alike. Ac­cord­ing to the In­ter­na­tional Mon­e­tary Fund (IMF), emerg­ing mar­kets growth 4.6 per cent in 2014 slowed to 4.2 per cent in 2015. The IMF fore­casts a pickup to 4.7 per cent in 2016.”

John Man­ners-Bell, CEO, Trans­port In­tel­li­gence said, “In­dia has done sub­stan­tially well in the past one year and has come up from po­si­tion five to three. It is the fastest-grow­ing econ­omy and just needs more struc­tural re­forms.” He at­trib­uted the rise to clar­ity in rules and taxes and in­vest­ments com­ing into in­fra­struc­ture.

“With China suf­fer­ing, its trad­ing part­ners across the re­gion are also af­fected. On top of this a stronger US econ­omy has meant a flight of cap­i­tal from East to West, which has led many emerg­ing coun­tries to in­crease their in­ter­est rates, damp­en­ing do­mes­tic growth fur­ther. Air and sea vol­umes have been weak due to the slow­down in in­ter­na­tional trade.” Nearly 1,200 sup­ply chain and lo­gis­tics ex­ec­u­tives world­wide shared their views on the 2016 global eco­nomic out­look, prospects for emerg­ing mar­kets, key growth driv­ers and trends af­fect­ing emerg­ing mar­kets coun­tries. The sup­ply chain in­dus­try is brac­ing for more volatil­ity in the global econ­omy. A large ma­jor­ity of in­dus­try ex­ec­u­tives (61 per cent) are un­clear on the di­rec­tion of the world econ­omy or in­di­cate they ex­pect more tur­bu­lence. Their top two con­cerns are oil prices and China’s eco­nomic health. For the first time, sup­ply chain in­dus­try pro­fes­sion­als see In­dia as the emerg­ing mar­kets coun­try with “the most po­ten­tial to grow” as a lo­gis­tics mar­ket over the next five years. In­dia edged out China, which was seen as the mar­ket with the most po­ten­tial in past sur­veys. In­dia also climbed two spots to third, be­hind China and UAE, in the data-driven Agility Emerg­ing Mar­kets Lo­gis­tics In­dex. Its rise was pro­pelled by an ini­tial round of eco­nomic re­forms and a surg­ing econ­omy. While op­ti­mistic, lo­gis­tics pro­fes­sion­als also re­main cau­tious about In­dia. Nearly 42 per cent said In­dia needs more struc­tural re­form to sus­tain its cur­rent growth and more than 21 per cent said the coun­try needs more than eco­nomic re­form if it is to un­lock its po­ten­tial. Trade flows be­tween Asian mar­kets re­main the most promis­ing in the eyes of lo­gis­tics pro­fes­sion­als. At the same time, they showed in­creased op­ti­mism about prospects for growth along other key Asian trade routes: Asia-North Amer­ica, Asia-Africa and Asia-Middle East. Sen­ti­ment about Asia-South Amer­ica trade and South Amer­i­caNorth Amer­ica trade slipped from a year ago.

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