Despite economic slowdown and political upheaval, a number of logistics professionals see the so-called “Arab Spring” countries as more attractive places to do business, according to a new study by Agility.
Attractiveness is measured by market size and growth, market compatibility (foreign direct investment, security, urbanization and wealth distribution) and market connectedness (international and domestic transport infrastructure), said the ‘Agility Emerging Markets Logistics Index’ released today.
About 43 per cent of respondents view the Arab Spring phenomenon as making the region either more attractive or much more attractive as an investment target, with a further 24 per cent seeing ‘no impact’ from the tumult of the past year.
Global economic uncertainty and Middle East political turmoil were doing little to dim the attraction of emerging markets, which showed signs of reducing their dependency on developed markets as they compete to be the trade hubs of the future, the study added.
The study, sponsored by global logistics provider Agility, has been compiled by Transport Intelligence, a leading provider of expert research and analysis to the global logistics industry.
As part of the Index, 550 senior logistics executives were surveyed, making this the biggest survey to date in the emerging markets logistics sector. For the first time, the Index offers trade lane analysis from 2005 to 2011.
The annual Index spotlights 41 emerging markets and ranks them by their investment potential and progress each year.
While emerging markets such as Brazil, China and India cannot avoid the impact of economic downturns in the US and Europe, the Index points to developments that are providing a cushion.
First, domestic demand in emerging markets such as China is growing. Second, trade volumes between key emerging markets are growing – and offsetting declines in trade with traditional developed markets.
At the same time, worries of overheating in Asia have lessened as output in powerhouse economies such as China and India remains high, the study said.
The developing world will be the engine of global growth in 2012, offering business opportunity few global companies can afford to ignore, said the Agility index.
The countries that dominated the rankings continued to be those that combine size and robust growth. China ranked first; India second; Brazil third. Saudi Arabia and UAE came in fourth and fifth position respectively followed by Indonesia and Russia at 6 and 7 slot, it stated.