UAE Boasts Best Business Climate among Emerging Markets

UAE holds number one spot in category among 50 emerging markets

Dubai, UAE, January 24, 2017:  United Arab Emirates ranked number one in the category of best business climate out of 50 ranked emerging markets according to findings in the 2017 Agility Emerging Markets Logistics Index. UAE was followed by Qatar in second place, Oman in third and Bahrain in fourth. Saudi Arabia ranked 7th and Kuwait 10th.

The Index, now in its eighth year, offers an annual snapshot of industry sentiment and ranks  the world’s leading emerging markets by size, business conditions, and transport infrastructure and connections. It includes a survey of more than 800 global logistics executives.

To score business conditions, the Index looked at the strength of the service sector, urbanization, security, foreign investment, wealth distribution, and the levels of bureaucracy and regulation confronted by businesses.

Among countries in the Middle East, UAE ranked highest in the overall Index at No. 3 after China and India. In addition to best business conditions, it ranked as having the best transport and logistics connections.

“The UAE has taken a strategic view of its development outside the energy sector and continues to improve its attractiveness to logistics providers and their customers,” said Elias Monem, Middle East and Africa CEO of Agility Global Integrated Logistics. “The low energy prices of recent years have prompted other Gulf states to do the same.”

2017 Index highlights:

• Iran, emerging gradually from years of international isolation, leaped eight spots to No. 18 in Index. In Agility’s survey of logistics executives, Iran climbed to 9th from No. 15 among countries with the most potential to grow as logistics markets. Iran’s gains were the largest of any country in the 2017 Index or the survey.
• Bahrain climbed five spots in the overall rankings to No. 23, rebounding after years of social unrest that damaged its economy and dampened investment.
• Turkey improved ranked No. 9, moving up one spot ahead of Russia, despite fallout from an attempted coup and extremist violence.
• Logistics executives picked Syria, Libya and Iraq, all in the grip of violence and war, as the three emerging markets countries with the least logistics potential.
• China, the world’s second-largest economy, remains the world’s leading emerging market ahead of India, which climbed past UAE to No. 2 in the latest rankings. In the survey, supply chain executives identified the direction of China’s economy as the factor most likely to drive global economic and trade growth in 2017. Seventy-six percent said China’s economy is slowing, but only 17% said the slowdown is significantly hindering the transport and logistics sector. Nearly 66% said slower growth will not alter their plans in China.
• Outside of the Gulf countries and Turkey, Egypt (20) and Morocco (22) were the MENA countries ranking highest in the Index. Algeria (31) and Jordan (33) improved their rankings slightly in the latest Index. Tunisia (42) slid five spots; Libya (46) and Lebanon (47) each fell three spots.   
• Robust growth and long-anticipated tax and economic reform pushed India to No. 2 in the Index and impressed logistics executives responding to the survey. Even so, India’s surprise decision to remove high-denomination bank notes from circulation and encourage cashless payments could be jarring for the economy in 2017.
• Despite upbeat views of India and Iran, industry professionals sounded notes of caution about the broad outlook for emerging markets. Nearly 69% expressed concern that the UK’s Brexit vote and the failure of global and regional trade initiatives signal a threat to trade. A sizeable minority - 43% -- said the International Monetary Fund is too optimistic in forecasting 4.6% growth for emerging markets in the coming year.
• Africa’s biggest economies - Nigeria and South Africa - were among the countries that fell most sharply in the Index. Smaller African markets - Uganda, Ethiopia, Tanzania,  and Kenya - improved their rankings in 2017.
• Brazil held its No. 7 Index ranking despite a painful recession and the impeachment of President Dilma Rousseff. In the survey, logistics executives again picked Brazil as the the market with the most logistics potential after India and China. One reason for their optimism: nearly 57% expect commodity prices to rebound in 2017, although most do not expect significant increases.

Transport Intelligence (Ti), a leading analysis and research firm for the logistics industry, compiled the Index.

John Manners-Bell, Chief Executive of Ti, said: “Uncertainty and volatility have characterized many emerging markets in 2016. This has been compounded by the political environment in Europe and the U.S., which will have direct consequences on trade with Latin America, Asia and Africa. However there have been many positives too -- for example, the strong performance of India. More than ever, the Index identifies and contrasts those markets which will prosper from the most vulnerable and poorest performing.”