The UAE ranks number one overall as the most competitive emerging market in GCC, according to the annual Agility Emerging Markets Logistics Index.
The UAE also topped all three individual sub-indices in the region. “This reflects the UAE’s commitment to strengthening its business environment in the non-oil sectors and successful implementation of the comprehensive national SME development strategy,” Agility Global Integrated Logistics (GIL) said.
In the area of business fundamentals, Gulf countries dominated the top spots. The UAE was No. 1, followed by Saudi Arabia (3), Qatar (4), Bahrain (7), Oman (8) and Kuwait (11). Nearby Jordan was 10th. China, India and Indonesia rank highest for domestic logistics; China, India and Mexico are at the top for international logistics.
“Gulf countries are pushing hard to diversify and integrate their economies by developing world-class infrastructure and creating fair, transparent conditions for business,” said Elias Monem, GIL CEO for Middle East & Africa.
“Good infrastructure and stable business conditions are areas of huge competitive advantage for the Gulf region. They will be key to recovering from the economic downturn brought on by the pandemic,” he said.
The Index, now in its 12th year, ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors.
China, India and Indonesia topped the index, while three Gulf countries made the top 10: UAE (4), Saudi Arabia (6) and Qatar (9).
"Logistics is one of the key economic driver for the UAE and because of its strategic location and excellent infrastructure, I expect UAE to be the Logistics hub," Saad Maniar, senior partner at Crowe UAE.
Sachin Gupta, general manager of Gulf Pinnacle Investments (GPI), the UAE subsidiary of Gulf Pinnacle Logistics, said the UAE has developed an excellent infrastructure for logistics industry, which is being expanded continuously.
“World class infrastructure added to its proximity to the world makes UAE an attractive logistics hub. The government's initiatives such as World Logistics Passport, conducive economic policies, ease of doing business and stable business environment have successfully attracted global brands and the UAE will continue to be among the top logistics hubs of the world," Gupta said.
An interesting finding of the survey is that even when manufacturers consider easing dependence on China, few companies plan to bring per cent of industry executives surveyed say relocating production from China would mean reshoring to their home countries. Vietnam (19.6 per cent), India (17.4 per cent) and Indonesia (12.4 per cent) are the leading choices for relocation, followed by Thailand (10.3 per cent) and Malaysia (9.6 per cent), according to those surveyed.
While total cost is driving overall shifts in production supply chains, today low-cost labor is barely a consideration for emerging markets investment -- with only 2.2 per cent of industry executive’s saying it’s important. Executives say the most important factors are government bureaucracy and regulation (25.8 per cent); infrastructure quality (14.1 per cent); and supply of skilled labor (8.0 per cent). As companies examine new production locations, they say their biggest concerns are inadequate infrastructure (14.5 per cent) and additional cost (13.5 per cent).
The regional Gulf economy could get a boost as a result of the diplomatic breakthrough that ended Saudi Arabia’s three-year economic blockade of neighboring Qatar in late 2020. That could lead to tighter integration in a region where cross-border trade, trucking and e-commerce are growing dramatically.
The countries improving their domestic logistics strengths the most are Malaysia, Nigeria, Vietnam, Iran, Uruguay, Myanmar and Cambodia. The biggest strides in international logistics came from Morocco, Ukraine, Kenya, Myanmar and Paraguay.
Along with the Index, Agility surveyed more than 1,200 supply chain professionals for their views on the disruption caused by the Covid-19 pandemic. Of the executives surveyed, 44.7 per cent see a Middle East/North Africa recovery in 2021; 38.9 per cent say a recovery for the region won’t take place until 2022-2024. A majority expect Asia, North America and Europe to rebound this year.
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