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THE
latest Emerging Markets Logistics Index
from Agility reveals that Asia's developing
countries are likely to grow faster than
those in India and China in the immediate
future.
The
index compares 45 emerging markets and provides
data on logistics, air cargo, shipping lines
and freight forwarders. It is backed by
the UK-based Transport Intelligence (TI)
survey of more than 800 industry logistics
executives with opinions on those quickly
developing countries and those on the industry
watch-list.
The
index considers the rising stars of 2013,
including BRICs and Tiger economies, and
how they will fare into 2014.
According
to the report, most logistics and trade
executives (58 per cent) see emerging markets
countries in Asia producing the highest
growth rates in 2014 and Latin America is
the top choice of 25 per cent.
China
ranks number one based on a formula that
weighs economic, social and infrastructure
data, but in all three of the data-driven
areas, its performance slipped. Sixty-four
per cent of executives in the survey "agree"
or "strongly agree" that there
is a shift away from China to factories
in Vietnam, India, Mexico and Indonesia.
However,
no country can challenge China's commanding
position as the leading destination and
origin in both air and ocean cargo. Even
so, China's air freight volume to the US
fell 7.5 per cent in 2013 - at the same
time air shipments from Brazil and South
Africa to the United States were on the
rise. Brazil's ocean freight to the US also
increased sharply. US ocean shipments to
China fell 19 per cent.
Small
countries - Oman, Cambodia, Paraguay, Bolivia
and Qatar - posted big percentage gains
off modest ocean volumes to the US and the
EU.
India
dropped from its number one spot in the
index to fourth, below Brazil and Saudi
Arabia amid chronic economic problems, lack
of direction on the economy and a weaker
rupee. India's slide was remarkable considering
that Brazil experienced a year of economic
turmoil and that India's population is 44
times that of Saudi Arabia, a big advantage
in the index. As with China, India's score
in all three major areas of the index declined
over the past year.
Agility
CEO and president Essa Al-Saleh said the
differences between India's weakness and
Brazil's strength require tough and timely
decision-making.
"Brazil
has shown more willingness to make them,
perhaps because policymakers feel pressure
as the country gets ready to host the 2014
World Cup and 2016 Summer Olympics. India
continues to put off difficult decisions."
Indonesia
and Malaysia remained at fifth and eighth
rank respectively, ranking among the most
solid, attractive emerging markets. The
region's biggest surprise is the Philippines,
which soared nine spots to number 19 due
in part to spending on roads and port infrastructure.
Before Typhoon Haiyan struck the central
part of the country on November 8, the Philippines
faced concerns about economic overheating.
Seventy-four
percent of logistics professionals view
prospects for emerging markets as "good"
or "very good" for 2014. Respondents
remain optimistic despite signs that growth
is slowing in China, stalled in Brazil and
India, and uncertain in other countries
that could suffer if the United States reins
in monetary stimulus, as expected.
Despite
concerns over emerging markets' currencies
and financial markets facing pressure in
2013 amid worries of a possible ripple effect
from tighter US monetary policy, optimism
remains of the enormous potential of expanding
middle classes and younger average age of
markets, said Mr Al-Saleh.
The
45 countries featured in the 2014 Agility
Emerging Markets Logistics Index were projected
to grow at an average of 6.2 per cent in
2013. The US economy expanded 2.9 per cent,
while the European Union grew 1.4 per cent,
according to IMF projections.
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