Top 8 emerging logistics markets

Research undertaken for the Agility Emerging Markets Logistics Index records some notable changes in the global rankings. Supply Chain Digital takes a closer look.

Ranking 45 emerging markets based on size and growth attractiveness, compatibility, and connectedness, the Agility Emerging Markets Logistics Index (AEMLI) uses data from a number of globally influential sources. These include the International Monetary Fund, World Bank, UN, World Economic Forum, and International Air Transport Association, as well as a variety of government agencies across the world.

The report says: “The upheaval caused by the global forces that have shaped much of the emerging market landscape over the last 12 months is illustrated within the high degree of fluctuation seen in this year’s ranking.” And that it is “Those best positioned to manage macroeconomic turbulence” that have managed to retain or advance their position in the rankings.

8) Mexico

Change in ranking: 1

Mexico’s oil reserves, while substantial, have not had the best luck on the markets. The private sector was invited to participate two years ago, but the industry was immediately hit (and continues to suffer from) the fall in global prices. Mexico not only boasts close proximity to the USA which has ensured that the country has developed trade and infrastructure links with the world’s largest economy, but also low labour costs which has contributed to its rise.

7) Indonesia

Change in ranking: -3

Close geographical proximity to an economic powerhouse has not been able to save Indonesia from falling three places in the rankings. The government has responded to the fall in commodity prices by attempting to bolster the country’s business environment but, especially from a logistics point of view, the country’s outlook is not as positive as it once was. Coupled with fiscal tightening in the fallout from the commodities slump, Indonesia’s entire infrastructure network remains marred by corruption, poor procedures and underdevelopment.

6) Brazil

Change in ranking: -3 

Yet another casualty of the fall in oil prices, Brazil has placed outside the top 3 positions for the first time. While the country’s middle class has grown in the past two decades, this has not been enough to prevent job losses in the wake of the commodities slump. This has also compounded the fact that the country’s infrastructure network needs to be upgraded while, at the same time, new frameworks developed to eliminate corruption and save time.

5) Saudi Arabia

Change in ranking: -3

It is perhaps unsurprising to see that Saudi Arabia has slipped down in the rankings given its dependence on oil, but the importance of its economic planning should not be understated. Taking into account its strategic position in the Gulf, the Kingdom is taking measures to exploit this while making concerted efforts to diversify its economy for a post-hydrocarbon future.

4) Malaysia

Change in ranking: 4 

One of the highest growers out of the 45, Malaysia has been undergoing a strong shift towards a diversified economy following years of commodity trade dependence. The country has developed a robust manufacturing base consisting of manufacturing, parts and assembly, as well as a growing palm oil industry.

3) India

Change in ranking: 2

India has shifted up two places in the ranking and for good reason; it is the seventh largest economy in the world and is continuously expanding its manufacturing capabilities, most notably through the ‘Make in India’ initiative.

The AMELI highlights perhaps the greatest challenge: “India’s current tax regime effectively creates 29 sub-national markets within the continent-sized nation and requires checkpoints on major transportation lanes that create queues of trucks and delays in transit, while eroding value and efficiency, and adding significant complexity.”

2) UAE

Change in ranking: 2 

Coupled with its prime geographic location and substantial capital, the United Arab Emirates is well-positioned to transform itself into a regional hub connecting other oil-rich countries with the rest of the world. The country also has a number of well-known initiatives in place to encourage businesses to set up show, which adds a further incentive.

1) China

Change in ranking: no change 

China has benefitted from years of substantial economic growth, backing up its endlessly expanding manufacturing sector with suitable investments in airports, roads, railways, and ports. Losing $5 trillion from its stock markets last year has helped to highlight the fact that much still needs to be done to make the logistics environment more robust, particularly through improving the rural/urban divide and by tackling corruption. 

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