Between optimism and prudence
The latest Agility Emerging Markets Index shows that, in the context of emerging economies’ logistics expertise, the Southeast Asian and Middle Eastern regional duopoly has been fortified. One of the results is growing self-confidence in Asia. A Chinese cough does not automatically represent a cold for the surrounding countries.
The Kuwaiti logistics firm Agility generates approximately half of its sales in Europe and North and South America. A focus on emerging markets is nevertheless part of the company’s DNA. It recently published the tenth edition of the Agility Emerging Markets Index (Aemi). The ranking analyses the logistics infrastructure and services in various categories in 50 countries.
Little change at the top
This year the study has used a different measurement approach, limiting the usefulness of comparisons to 2018’s figures. The report shows little change at the top. China remains the clear leader, followed by India and the United Arab Emirates. Russia and Brazil dropped out of the top ten; they were replaced by Qatar and Vietnam.
The Southeast Asian country has become something of an El Dorado for the global logistics industry. The authors of the index call Vietnam a driving force behind the overall performance of the countries in the study. The nation has overtaken Brazil as the fifth-largest emerging market for logistics-intensive trade.
Who benefits from trade conflict?
Besides the ranking, one of the core elements in the Aemi is a survey of business prospects in the emerging markets. 550 executives from the logistics industry were questioned last autumn. They see a great potential in the markets assessed; it is coupled with a degree of pessimism, however.
Approximately 47% of them consider the risk of an economic crisis in 2019 likely or very likely. They will not necessarily blame it on the Sino-US trade conflict, however.
Those surveyed expect overall trade volumes between the superpowers to decline by approximately 10% this year, it’s true, but they simultaneously also believe in benefits therefrom, especially for Southeast Asia. 56% of all those managers surveyed are in favour of this thesis. Malaysia in particular has good chances of garnering a substantial slice of the cake, they believe – thanks also to its good infrastructure as well as to its many manufacturing enterprises.
China’s dominance remains unbroken at the top of other segments, however. 45% of respondents believe the growth opportunities in China’s e-commerce mar- ket are greater than India’s. Opinions on the ‘One belt, one road’ initiative diverge. 42% believe it will have a positive impact on business in emerging markets, whilst 34% think the consequences will be negative. Those 20% who consider that it is too early to tell probably come closest to the truth.
