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China,
Brazil and India - three BRIC countries
along with Russia - dominate most discussions
about emerging markets because of their
size. They rank at the top of the index
again this year, but all three experienced
erosion in their raw index scores, suggesting
that they need to take steps to improve
their business climate and make additional
investment in infrastructure.
The
Gulf countries of Qatar, UAE, Oman, Saudi
Arabia and Kuwait, along with nearby Jordan,
remain domination players in the Market
Compatibility portion of the index, which
looks at whether conditions are favourable
for business and trade.
Saudi
Arabia has improved its position the most
from number 9 five years ago to number three
in 2014 due to an unprecedented public spending
spree. It is building and expanding airports,
roads, ports, universities, industrial complexes
and other infrastructure in an effort to
diversify, lessen dependence on oil, and
create jobs for millions of young Saudis.
Qatar
and Oman - joined by Chile - make up an
elite group in the index. They are relatively
small economies (annual GDP of less than
$300 billion) that outperform both their
peers and larger emerging economies based
on the strength of their accessibility,
their vibrant service sectors and world-class
transportation infrastructure.
Out
of 12 countries, eleven African and Latin
American countries rank the worst in market
compatibility.
The
Philippines, Vietnam, Nigeria, Colombia
and Mexico all improved their positions
in the 2014 rankings. Countries experiencing
the sharpest declines were: Tunisia, Ukraine,
Argentina and South Africa.
Logistics
industry executives are pessimistic about
a quick return to stability and growth in
Arab Spring countries such as Egypt, Libya
and Tunisia. Sixty-three per cent say the
economic attractiveness of Arab Spring countries
is "in question for the foreseeable
future" or "significantly weakened
in the long term". Only seven per cent
say prospects are "brighter" than
they were before political upheaval.
Looking
at Egypt, 94 per cent say instability will
hamper growth "for the next two to
three years" or "for the foreseeable
future."
Tunisia
tumbled 11 spots in the index to number
34. Egypt was last in the area of Market
Compatibility, a ranking based on factors
determining the climate for business and
investment.
The
index ranks natural disaster as Asia's biggest
risk to supply chain against Latin America's
serious threat of corruption. Government
instability is the top problem in the Middle
East and North Africa, while poor infrastructure
the most serious risk in Sub-Saharan Africa.
Syria
and Iran - two countries that are not in
the index and are subject to international
economic sanctions - were picked as the
least attractive markets for the logistics
industry by industry professionals. Among
the countries in the index, Ethiopia, Iraq,
Libya and Egypt were ranked as least attractive.
The
global economic outlook in 2014 has improved
since last year's survey. Seventy-two percent
expect "modest growth" in global
economic output and trade volumes in the
next 12 months. A year ago, just 46 per
cent of respondents expected modest growth
in 2013; an equal percentage expected output
and trade to stay flat.
Industry
executives view prospects for the US and
EU economies almost identically. Most -
54 per cent for the Eurozone; 55 per cent
for the United States - predict modest growth
in the world's two largest economies. The
percentage of those seeing output stay flat
was about 30 per cent for both the US and
EU economies.
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