CAIRO: Despite the political unrest affecting the region, logistics professionals believe Egypt, Libya and Tunisia — along with other Arab countries that experienced popular uprisings last year — are becoming attractive business destinations.
Egypt, as well as Libya, made it to the top 20 list of major logistics markets for the future, according to a report released by Agility, a logistics provider in the Middle East.
"One point of interest was that two countries involved in the ‘Arab Spring’ made it into the top 20, Egypt and Libya, 16th and 17th, respectively," the report stated. "It seems that many consider these nations ‘open for business’ as regards logistics services."
Still, while investors are increasingly seeing potential in Egypt and Tunisia, the two countries dropped on Agility’s Emerging Markets Logistics Index in 2012.
The report shows that vibrant domestic consumer markets and trade between emerging markets has made these nations more resilient to downturns in the developed economies, which used to “determine their fate.”
"The ‘Arab Spring’ resulted in declines among the rankings of both Tunisia — down two places — and Egypt — down one place. For both countries scores for ‘market compatibility’ declined as a result of increased security risks to the operations of potential investors,” the report said.
Egypt ranks 18 among the 41 on the index, falling one spot since last year. Tunisia on the other hand fell two spots and is currently ranked at 20. Bahrain, which is also among the nations undergoing political change, came in at 20, dropping two spots since last year.
The study shows that the main barriers for doing business in emerging markets continue to be poor transport networks, corruption and constrictive government policies.
The top ten resilient countries on the index, in order, are: China, India, Brazil, Saudi Arabia, UAE, Indonesia, and Russia, Malaysia, Chile and Mexico.
"Of the larger markets, GDP in excess of $300 billion, the highest performers in terms of ‘market compatibility’ are Saudi Arabia and China," the study found.
The report also provides a ‘market size and growth attractiveness’ sub-index, which is calculated based on a country’s economic output, projected growth, population size and financial stability.
"Unsurprisingly, China and India score top, with China obtaining the maximum possible score for this sub-index," said the report. "Indonesia, Brazil and Russia make up the remaining top five."
Paraguay, Ecuador and Bolivia ranked poorly in this category, offering limited prospects for investors.
The index report, which includes Transport Intelligence’s (Ti) exclusive survey of 550, shows that Intra-Asian trade holds the most potential for growth in the near future.
Most of the biggest movers down the index this year were Middle Eastern nations, including Algeria, Libya, Tunisia, Jordan and Bahrain.
Some of the biggest upward movers, however, were among the South American countries including Colombia, Paraguay and Peru.
From the Middle East and North Africa (MENA) region, Kuwait, Morocco and the UAE were among the biggest movers up the index.
Kuwait, ranked at 16, moved up three places among the 41 emerging countries, while Morocco, ranked at 21, also moved up three spots.
This year’s “rising stars” in various sectors included Malaysia, Vietnam, Turkey, Kenya, Ethiopia, Argentina, Oman, Morocco and the United Arab Emirates (UAE).
The three East African countries included in the index, sit towards the bottom of the table, but have improved since previous years.
Kenya, Ethiopia and Tanzania are seeing investments focused on "niche markets," according to the findings.
"Ethiopia, scores reasonably well in terms of ‘market compatibility,’ pushing up its overall score. This is as a result of lower potential security threats compared with the other two markets," the report stated.
In regards to Asia countries, Bangladesh was one of the biggest movers up the index for 2012.
"Bangladesh, one of the largest ‘smaller’ economies, scores particularly poorly in terms of transport connectivity. Poor shipping, air, road and transport infrastructure, as well as troublesome customs procedures place Bangladesh as the least attractive market in this respect," said the study.
Agility was established in Kuwait in 1979 and by 2004 grew to be a large logistics provider in the Middle East.