Logistics professionals have nominated India as the emerging market with the most logistics potential, according to the 2017 Emerging Markets Logistics Index.
The annual survey of more than 800 logistics professionals from around the globe is meant to provide a snapshot of industry sentiment and a ranking of the world’s 50 leading emerging markets by size, business conditions, infrastructure and transport connections.
Agility Logistics, the company behind the annual ranking, said India climbed past the United Arab Emirates (UAE) and is now the second highest ranked emerging market after China, which retained the top spot.
“In the survey, supply chain executives identified the direction of China’s economy as the factor most likely to drive global economic and trade growth in 2017,” Agility said.
“Seventy-six percent said China’s economy is slowing, but only 17 per cent said the slowdown is significantly hurting the transport and logistics sector. Sixty-six percent said lower growth will not alter their plans in China.”
Robust growth and long-anticipated tax and economic reform, meanwhile, have pushed India to number two in the Index and impressed the logistics executives surveyed. Even so, India’s surprise decision to remove high-denomination bank notes from circulation and encourage cashless payments could be jarring for the economy in 2017, Agility found.
The UAE, number three overall in the Index, again topped the rankings in the areas of business climate, logistics infrastructure and transport connections. Gulf countries UAE, Qatar, Oman, Bahrain, Saudi Arabia and Kuwait claimed six of the top 10 spots for best business conditions, Agility pointed.
Iran climbed eight spots in the Index rankings to 18th overall and leaped to ninth from rank 15 among emerging markets countries that executives view as having the most potential to grow as logistics markets. Iran’s gains were the biggest of any country in the Index or the survey.
In contrast, Africa’s biggest economies – Nigeria and South Africa – were among the countries that fell most sharply in the Index. Smaller African markets such as Uganda, Ethiopia, Tanzania and Kenya improved their rankings in 2017, though.
BRIC powerhouse Brazil kept the number seven spot from 2016 despite a painful recession and the impeachment of President Dilma Rousseff. In the survey, logistics executives picked the South American country as the market with the most logistics potential after India and China. One reason for their optimism: nearly 57 per cent expect commodity prices to rebound in 2017, although most do not expect significant increases.
Crisis-shaken Turkey weathered the effects of an attempted coup and extremist violence, moving from tenth to ninth in the latest Index. Russia fell from ninth to tenth, meanwhile, a comparatively modest slip considering Western economic sanctions and low energy prices, Agility said.
From a global perspective, Essa Al-Saleh, CEO of Agility Logistics, said logistics providers and their customers are concerned that anti-globalisation feelings and populist policies in the UK and United States could spread and harm trade in emerging markets that rely heavily on exports.
He pointed out that nearly 69 per cent of logistics professionals said they worried about a retreat from free trade in 2017 following the UK’s Brexit vote and the collapse of global and regional trade talks.
As such, a “significant minority” of 43 per cent said the International Monetary Fund’s 2017 emerging markets growth forecast of 4.6 per cent was “too optimistic”.