Saturday 18th Nov 2017 - Logistics Manager

Emerging winners and losers

The tragic events in Algeria last week have only emphasised the political instability in that part of the world. But even before that, trade and logistics professionals were pessimistic about the near-term prospects of Arab Spring countries such as Libya, Tunisia and Egypt.

The latest Agility Emerging Markets Logistics Index found that some 45 per cent of respondents believe these countries are too unstable for growth and investment. And 42 per cent are uncertain of future prospects.

Only 13 per cent felt these countries were now ready to grow and absorb investment.

The study carried by Transport Intelligence for Agility said: “Continuing unrest in neighbouring countries, especially Syria, is likely to be having some impact on individuals’ wariness regarding growth and investment in the Arab Spring countries.”

China, India and Brazil remain the dominant emerging markets for investors, exporters, producers of consumer goods, and logistics providers.

Even so, the report makes it clear that the dynamics of locating production are changing. Trade and logistics professionals see more manufacturers looking for alternatives to China and view cheap labour as a less critical factor in determining where to locate production.

Economic growth remains the leading driver of a country’s prospects as a logistics market. Respondents identified foreign investment and trade volumes as greater barometers of a country’s potential than labour costs.

So who are the big winners? The report identified four countries: Kazakhstan, Morocco, Ukraine and Argentina. For Kazakhstan and Argentina, an improvement in the overall economy drove the increase. Morocco climbed upwards as a result of an increase in foreign direct investment; while Ukraine registered improvements in levels of security.