1、A G I L I T Y E M E R G I N G M A R K E T S L O G I S T I C S2023Supply chains battle with higher costs,Covid lows,the Ukraine war and major location shiftsProduction moves out of ChinaSaudi Arabia to spend$24.7bn on tech by 20252023 recession:What are the odds?2ContentsContentsOverall Index 13China

2、 13India 14United Arab Emirates 15Malaysia 16Indonesia 17Saudi Arabia 18Qatar 20Thailand 21Mexico 22Vietnam 24Domestic Logistics Opportunities 25China top again but storm clouds gather 25Make in India policy brings rewards and costs 25Brazil falls but Egypt soars 26Egypt prioritises port investment

3、26International Logistics Opportunities 28Chinas zero Covid policy still causing supply chains chaos 28Asian countries to benefit from China plus 29Highest climbers 29Business Fundamentals 30Rule of law essential 30Smuggling and counterfeiting risks 31Digital Readiness 33Adopting Industry 4.0 33Digi

4、tal finance and broadband penetration key to e-commerce adoption 34Education and skills lay foundations 35The Agility Emerging Markets Logistics Index 2023 Survey 36152433343Contents42.3%of respondents believe that air freight rates will normalise in 2023,although at higher levels than pre-Covid;com

5、pared to 46.8%who think that sea freight rates will normalise in 2023,but at higher levels than pre-Covid.The most important driver of demand is the US economy.Consumer confidence in the US seems weak at present resulting in less vigorous retail spending.Read more on p.41Supply chains increasingly b

6、ypassing ChinaFrom 2023 onward,Southeast Asia,India,Europe and North America will be more attractive production and sourcing destinations than China,according to survey findings.Southeast Asia followed by India will be the most attractive re-location destinations,with 13.6%and 13.4%of respondents re

7、spectively stating their companies will move production or sourcing activities to these destinations.Read more on p.53Key FindingsFrom freight rates to start-up ecosystems,our key findings section offers a brief look at some of the facts and data to emerge from our research.Kenya features one of the

8、 most mature start-up ecosystemsKenya has advanced its structural reform agenda focused on improving governance and has reinforced oversight of state-owned enterprises.The countrys progress towards creating a stronger business environment in the last several years has also been evident.Kenya belongs

9、 to the big four African countries that account for about a third of the continents start-up incubators and accelerators,according to the WEF.GDP growth in Kenya is forecasted to be amongst the strongest in the region in 2023 according to the IMF.The peaceful conclusion of the 2022 presidential vote

10、 is a good signal for Kenyas institutional strengthening and political stability.Read more on p.394Contents66.4%of respondents says a global recession is certain or likely in 2023.This number increased by 6 percentage points in December compared to October.The forecast comes amidst sharp growth slow

11、downs across the largest economies.Read more on p.37Reconfiguration challenging for electronics and machineryMoving production out of China is easier for some industries than others.Supply chains for products like furniture,apparel and household goods will be relatively easy to diversify because the

12、 inputs are relatively easy to obtain.The process of supply chain reconfiguration will be more challenging for industries such as electronics and machinery,as they require components which are more difficult to source.More challenging,but not impossible as many electronics companies have already dem

13、onstrated.Read more on p.54Green economy provides Thailand with competitive advantageThailand has become a beneficiary of the China plus risk mitigation sourcing strategies being increasingly employed by global manufacturers.Whilst other Southeast Asian countries,such as Vietnam,may have lower labou

14、r costs,Thailand is more technologically advanced,especially in the green economy including the manufacture of electric vehicles(EVs).This has provided the country with a significant competitive advantage in the region.Read more on p.215Contents2/3 of respondents agree or strongly agree that the Afr

15、ican Continental Free Trade Area(AfCFTA)will generate new employment opportunities across the continent.Even though the African Continental Free Trade Agreement has in theory been operational since the start of 2021.Read more on p.57The Ukraine Russia War triggers costsThe war is having broad implic

16、ations for global businesses it has triggered an increase in business costs among 30%of the surveyed companies,whilst 29%saw an increase in logistics costs.Indeed,the war only amplified the economic impact of the pandemic and triggered an increase in the cost of energy,shipping and commodities as we

17、ll as supply chain disruptions,causing businesses around the world to feel the ripples closer to home.The war in Ukraine was a reminder for businesses that geopolitical risks should be factored in supply chain risk management.Geopolitical risks are always present,but the range of issues they present

18、 is creating extremely significant challenges for businesses to grapple with.Read more on p.45Digital forwarders have developed a sound business modelSurvey findings show that digital forwarders have been successful at eroding the competitive advantages of forwarders across several areas.The areas i

19、n which digital forwarders perform particularly well include tracking and visibility,Invoicing and Payment,and Speed of service.Respondents suggest that digital forwarders are yet to consistently improve their offering when compared to traditional forwarders in some areas.Looking ahead to 2027,the v

20、olumes shipped and booked through digital forwarders will further increase from the current average of 47.7%to almost 60.1%.The adoption rate is likely to increase over time as the technology matures and the digital forwarders gain scale.Read more on p.606Contents18%Climate-change events are already

21、 affecting around 1 in 5 organizations according to survey respondents.18%of the respondents are already feeling the impact of this type of disruption and state that climate change events are affecting their business.Read more on p.63The wave of multinationals announcing ambitious net zero targets m

22、ade headlines in 2021Large corporations around the world pledged to cut their greenhouse gas emissions to zero,usually by the distant 2050.These announcements gave the impression that the corporate world is moving fast to tackle climate change.But the reality is more nuanced.According to our survey

23、findings,more than 50%of respondents have committed to a net zero target,but around a third of respondents havent set a net zero target deadline.Read more on p.62Saudi Arabia has the potential to become a digital and innovation-based economyInnovation and technological development is the most import

24、ant driver of economic diversification in the Gulf countries according to survey respondents.Saudi Arabia will spend$24.7bn on technology by 2025.This is reportedly the highest government spending on technology in the world.The country is investing$6.4bn in future technologies and start-ups.By 2025

25、the digital economy is expected to contribute over 19%GDP of Saudi Arabia.Read more on p.507Contents17%Asia Pacific remains the most attractive global manufacturing hub,with 23.1%of respondents producing their products in the region.But a certain degree of relocation of international supply chains a

26、ppears to be under way and global supply chains are on the move.Survey findings show that 17%of the respondents that have already moved production/sourcing activities have chosen China as their alternative destination.Read more p.52Wage in Mexico$3.90 per hour compared to$5.58 in ChinaThe Mexican ec

27、onomy will significantly benefit from the deteriorating relationship between US and China.However,this will only occur if the Mexican government is able to build a more attractive business case for foreign investment.According to IHS Markit,the average manufacturing industry wage in 2022 in Mexico i

28、s$3.90 per hour,compared with$5.58 in China.The security situation in Mexico is one of the biggest headwinds to economic growth.Read more on p.22Technology adoption&e-commerce growthTechnology adoption,including internet and mobile phone usage is the most important digital readiness factor when deci

29、ding whether to invest in an emerging market,according to survey findings.Speed and reliability of internet connectivity as well as financial and banking ecosystem to support e-commerce sales are the second and third most important digital readiness factors.Digitalisation has become one of the most

30、significant growth engines for many emerging economies.For instance,digital readiness and connectivity played a crucial role in overcoming the difficulties of conventional trade during the pandemic and facilitating recovery in Southeast Asia.Read more on p.498Contents13.5%The proportion of businesse

31、s that will pass on higher energy prices to customers is not insignificant:13.5%of the respondents stated that their companies will increase their prices by 6-10%,further contributing to inflationary pressures.Read more on p.44West establishes factory network in light of China Taiwan tensionsThere i

32、s an impending crisis related to Chinas claims on Taiwan.The escalating tensions between Taiwans ally,the USA,and China which can,and already is,having an impact of trade flows.Given the reliance of the global semiconductor industry on Taiwanese manufacturers,especially in terms of the most advanced

33、 technologies,the West has taken steps to try to establish its own factories,whilst simultaneously preventing China from gaining access to technology which could be used for military purposes.Read more on p.13The impact of multi-nationals on retailers in IndiaWhen Prime Minister Modi came to power m

34、any in the global community hoped that he would reduce barriers to international trade.However his policy response has been to raise duties further to encourage global suppliers to establish Indian operations.There are those which fear the impact which the entry of multinational corporations into th

35、e Indian market would have on small businesses,in particular retailers.The risk is,as the world approaches a period of sustained economic downturn,that a neo-protectionist regime will isolate India further from globalized supply chains rather than integrate within them.Read more on p.149ContentsIntr

36、oduction from Tarek Sultan,Vice Chairman,AgilityThis is the 14th edition of our annual Agility Emerging Markets Logistics Index.If all you did was flip through the overall rankings,you would see little year-to-year change at the top,and you might conclude it had been a period of relative stability f

37、or the 50 countries examined in this report.It was not.2022 was a year of unprecedented volatility in the logistics industry and in the affairs of the emerging markets countries in our Index.At the outset of the year,shipping rates were at record highs.By years end,they had plummeted and the industr

38、y moved into 2023 with a glut of capacity and ocean containers.China,No.1 in this Index every year since it was launched,was struggling to cope with shrinking output,falling export demand and,after ending its zero-Covid policies,a huge surge in infections.Spiking energy prices sparked global inflati

39、on that sapped recovery efforts in all but a few energy-exporting economies.Meanwhile,Russia and Ukraine were battered by the effects of war and,in Russias case,economic sanctions and brain drain.To see evidence of all this volatility,take a look at the rankings for International Logistics,Domestic

40、Logistics,Business Fundamentals,and Digital Readiness.The countries making significant moves up or down in relative competitiveness were almost too numerous to name:India,Ghana,Argentina,Iran,Mexico,Pakistan,Lebanon,Colombia,Jordan,Sri Lanka,Bahrain,Cambodia,South Africa,Bangladesh,Tanzania,Turkey,E

41、thiopia,Bolivia and Paraguay,among others.What lies ahead in 2023?There are plenty of clues in the Index survey of nearly 800 logistics industry executives.A large majority see the prospect of global recession as certain or likely in 2023.More than 90%have been hit by higher logistics costs.More tha

42、n 80%blame the Russia-Ukraine war for at least some of their increased costs and supply chain disruption.Efforts by companies to strengthen resiliency by diversifying production and sourcing appear to be gathering steam.Nearly 75%of respondents said their companies have reduced supply chain risk by

43、sourcing from more locations or by moving production to their home markets,nearby countries,or countries that are political allies(“friend-shoring”).Another 14.5%took other steps to reduce supply chain risk.The country most directly affected by sourcing diversification is China,but the proportion of

44、 respondents with plans to continue expansion in China is roughly equal to those planning to move out or slash investment there.The biggest factors for those leaving:Chinas strict anti-Covid policies and overall difficulty of doing business.In spite of the turmoil and uncertainty confronting emergin

45、g markets and the industry,most industry leaders are looking through a long lens.Fifty-four percent of respondents say they will be more aggressive with emerging markets investments or leave existing expansion plans in place.Meanwhile,most foresee strong growth in the use of digital freight forwardi

46、ng,especially if error management can be improved.Few believe that e-commerce growth has reached a plateau.Most see expanded opportunity for their companies and for small business with the implementation of the African Continental Free Trade Area(AfCTA).Signals in the area of sustainability and clim

47、ate change are heartening,too.Only a small minority of respondents about 20%are resisting or ignoring the imperative to set net-zero targets and commitments.Sixty-seven percent say their businesses are planning for the effects of climate change or already feeling its impact.For shippers,carriers,dis

48、tributors,policymakers,marketers and others focused on the supply chain,the annual Agility Emerging Markets Logistics Index has been a useful guide to the worlds emerging markets and an accurate indicator of where the global economy and value chains are headed.Im confident you will find that to be t

49、he case again this year.10ContentsIntroduction from John Manners-Bell,CEO,Transport IntelligenceIt is not possible to overemphasise the challenges which many Emerging Markets have faced in the past year.A tightening post-pandemic fiscal environment in the West has resulted in a downturn in investmen

50、t as well as constrained global export markets.Russias invasion of Ukraine has led to sky-high energy bills and food shortages,especially across Africa.China,meanwhile,has suffered its own problems as the economy has struggled with its governments zero tolerance approach to Covid.This has created pr

51、oduction bottlenecks,disruption to logistics systems and distorted supply chains right around the world.Whilst many of these problems will be transient,it would be well to avoid complacency.The previous global crisis in 2008 left many politicians in Emerging Markets feeling badly let down by Western

52、 governments and corporations,their economic and societal predicament trumped by domestic pressures.As a result,many turned to China,which was,of course,eager to fill the void left by the Wests retreat.The ramification of this failure in Western policy is still being felt keenly to this day.Chinas s

53、oft power now reaches deep into countries in the emerging world,not least into Africa and even the USAs backyard,Latin America.Combined with tensions over Taiwan and the calls for re-shoring of production to North America and Europe,there is a real risk that supply chains will become fragmented or b

54、alkanised,as it has been termed.Political intervention and growing protectionism would not only bring about diseconomies of scale and lead to higher inflation but would also deny access to essential markets,exacerbating an already challenging environment.It is not all bad news,however,as these same

55、political tensions have created opportunities for Emerging Markets resulting from China plus sourcing strategies as manufacturers look to mitigate risks,avoid US tariffs and comply with new legislation,especially in the electronics sector.What is clear is that the supply chain environment is set to

56、become increasingly complex,with the prospect of globalized open markets now looking remote.If policy makers are not careful,Emerging Markets could be denied previously promised benefits as they find themselves caught in a power play between China and the West.Even well-meaning carbon reduction legi

57、slation such as the EUs Carbon Border Adjustment Mechanism risks further disaffection as Emerging Markets are made to shoulder the cost of climate change.Geo-political tensions have combined with financial uncertainty to create an ever more challenging business and investment environment.The role th

58、e Agility Emerging Market Logistics Index plays in providing insight into these complexities is more critical than ever.11ContentsTo assess and understand these trends and their effects on 50 of the worlds most promising emerging logistics markets,the Agility Emerging Markets Logistics Index 2023 ex

59、amines four key areas for logistics market development:Domestic Logistics Opportunities International Logistics Opportunities Business Fundamentals Digital Readiness It presents a data-driven analysis of 50 of the worlds most promising emerging logistics markets,reflecting the complexity,connectedne

60、ss and opportunities each market provides.As data visibility increases,the Ti Data Team is able to improve the accuracy of the models for each Index which,along with unprecedented volatility in the industry,instability in the global economy and effect of digital acceleration post Covid-19 has led to

61、 more movement in some areas of the Index than we are used to seeing.Domestic Logistics Opportunities measures the performance of each emerging market and its potential to sustain and develop domestic demand that requires competitive logistics markets:Domestic logistics markets size&growth Economy s

62、ize&growth Population size&growth Income equality Urbanisation Development of business clusters International Logistics Opportunities measures internal and external demand for trade intensive logistics services and the capacity of individual emerging markets to facilitate cross-border logistics oper

63、ations:International logistics markets size&growth Logistics intensive trade size&growth Infrastructure quality and connectedness Border procedures time&cost Business Fundamentals measures the openness,robustness,fairness and strength of each emerging markets business environment,rule of law and mar

64、ket independence:Regulatory environment Credit rating Contract enforcement&anti-corruption frameworks Inflation&price stability Cost of crime&violence Market accessibility&domestic stability Digital Readiness measures the potential and progress of an emerging market in becoming a digitally-led,skill

65、s rich,innovation-oriented and sustainable economy for the future:Emissions intensity Renewable energy mix Digital business models&online commerce Entrepreneurial risk Digital skills&human capital Availability of enterprise financing Each year,the Agility Emerging Markets Logistics Index utilises a

66、unique set of variables that measure current,short-and medium-term performance across structural and cyclical factors in each countrys logistics markets and key vertical sectors.As a result,the Index provides a snapshot of each countrys current performance and future potential as a globally signific

67、ant logistics market and investment destination.To determine the ranking of the 50 leading global emerging logistics markets,current and forecast data from world-leading institutions including Transport Intelligence(Ti),the World Bank,the International Monetary Fund(IMF),the World Economic Forum(WEF

68、)and others are used.By combining current and forecast data,this 2023 edition of the Index continues to assess each markets recovery from the impact of the Covid-19 pandemic,as well as its ability to survive or thrive in a period of unprecedented volatility.With the addition of the Digital Readiness

69、 ranking introduced in 2022,and the subsequent enhancements of this model through more data visibility,the Agility Emerging Markets Logistics Index 2023 also provides a unique perspective on the suitability and preparedness of each emerging market to participate in the still challenging,post-pandemi

70、c global economy.It is within this sub-Index that we have seen the most change,often due to the significant adoption of e-commerce resulting from the Covid-19 pandemic.In addition,by ranking each emerging market against the 49 others,the Index highlights strong performers and demonstrates where mark

71、ets have developed enduring advantages.It also reveals those markets which have seen performance and potential erode.Key Measures12ContentsThe Agility Emerging Markets Logistics Index 2022 Overall RankingRankRank ChangeCountryOverall ScoreLast Years ScoreDomestic OpportunitiesInternational Opportuni

72、tiesBusiness FundamentalsDigital Readiness10China8.319.758.479.757.116.6320India7.437.238.047.455.947.6130UAE6.595.735.605.899.107.3740Malaysia6.165.925.295.887.856.7250Indonesia6.085.516.345.895.776.2160Saudi Arabia6.075.955.385.747.866.3070Qatar6.024.895.914.967.926.3880Thailand5.676.015.115.985.7

73、76.0490Mexico5.556.405.376.324.935.11101Vietnam5.525.875.026.035.615.4311-1Turkey5.496.015.145.705.805.50122Oman5.464.894.954.887.245.8113-1Chile5.435.174.835.187.015.55141Bahrain5.314.684.994.707.155.34152Kuwait5.254.575.074.646.235.76163Jordan5.195.674.884.756.725.1417-4Russia5.185.255.015.415.135

74、.14180Philippines5.185.435.025.284.315.9919-3Brazil5.174.735.425.424.135.19200Morocco5.084.654.645.096.454.69210Egypt5.065.005.154.725.625.00220Kazakhstan4.994.414.664.666.195.10230Uruguay4.984.704.784.456.145.22240South Africa4.944.954.815.004.995.01253Kenya4.864.614.604.654.975.56261Pakistan4.814.

75、585.164.634.135.0627-1Peru4.785.104.725.124.484.5828-3Colombia4.755.024.675.084.554.53293Ghana4.724.234.614.445.005.14303Sri Lanka4.664.724.494.734.325.12310Argentina4.664.614.874.634.244.68324Tunisia4.604.604.614.485.064.39332Lebanon4.584.424.814.613.794.80340Nigeria4.554.485.154.393.624.61354Bangl

76、adesh4.534.385.024.483.534.6336-6Iran4.504.474.574.114.385.15375Tanzania4.474.354.624.144.704.58382Cambodia4.464.284.454.484.164.7339-1Ecuador4.464.464.504.654.494.03401Paraguay4.464.224.454.384.304.7241-4Algeria4.454.634.884.244.613.9142-13Ukraine4.404.974.344.383.954.91430Uganda4.294.394.414.383.9

77、14.24440Bolivia4.144.464.444.463.743.45450Ethiopia4.074.364.424.403.213.64460Mozambique3.764.404.254.392.173.22471Venezuela3.754.264.483.961.563.9948-1Angola3.713.484.374.301.903.11490Myanmar3.684.254.444.272.042.79500Libya3.352.594.483.811.961.8413ContentsWhilst China has once more retained its pos

78、ition at the top of the Agility Emerging Markets Logistics Index,the past year has been one characterized by political,economic and social upheaval,a new and worrying state of affairs for a government which prides itself on continuity and advancement.At the root of its problems is the effect of the

79、Covid pandemic and the zero tolerance policy it has adopted to prevent the spread of the disease throughout the population.This has had severe consequences for the economy which is forecast to grow only weakly(by Chinas standards)in 2022.Its prospects for 2023 will be influenced by whether the gover

80、nment loosens its regulations.If it does(and there are positive signs of this)then considerable pent up demand could be released,driving forward once again the Chinese and global economy.There is also the risk,however,that a return to normality will precipitate the spread of the disease overwhelming

81、 healthcare systems and throwing the governments policy response into confusion.Geo-political tensionsDomestic concerns are only part of the countrys problems.Whilst the fall out from the governments Covid response may be transient,albeit costly to domestic and worldwide supply chains,there are more

82、 strategic global challenges ahead.At the top of these is the impending crisis related to Chinas claims on Taiwan.There is already a pathway of escalating tension between Taiwans ally,the USA,and China which can,and already is,having an impact on trade flows.The breakdown of relations started with t

83、he tariffs imposed on China by President Trump and continued under President Biden.Specifically regarding Taiwan,the visit of the Speaker of the US House of Representatives,Nancy Pelosi,to Taiwan in August 2022 prompted Chinas military to undertake live firing exercises in the waters around the isla

84、nd,disrupting air and shipping lanes.This was a clear signal to the international community that a blockade of Taiwan could be used as a diplomatic and economic lever.Given the reliance of the global semiconductor industry on Taiwanese manufacturers,especially in terms of the most advanced technolog

85、ies,the West has taken steps to try to establish its own factories,whilst simultaneously preventing China from gaining access to technology which could be used for military purposes.Capturing supply chain valueA further pillar of Chinese government policy has been the capture of supply chain value b

86、y increasing the domestically-sourced proportion of intermediate goods.In the Factory Asia model,intermediates produced across the region have typically been transported to China for final assembly.This means that Chinese manufacturers lose out on much of the value adding process,the final assembly

87、being a low cost and commoditized undertaking dependent on cheap labour.The government has recognized that for its industry to ascend the value chain it has to invest in the know how and facilities which would obviate the need to import components from competitors throughout the region a calculated,

88、strategic and successful move.A so-called In China,for China production strategy has also been developed.Encouraged by the countrys political leaders,consumers are purchasing Chinese-made rather than foreign goods in increasing volumes,a significant shift in behaviour from only a few years ago.This

89、trend is particularly evident in the younger demographic which takes pride in buying domestically produced goods.These trends will result in China both becoming more self-sufficient in intermediate goods as well as finished products.Supply chain de-couplingWhether zero-tolerance Covid policy,the est

90、ablishment of dual technology supply chains,Made In China value capture or the fall out from its treatment of the Uighur community,China is slowly becoming de-coupled from global supply chains.This will be a very long process given the importance of the market to the rest of the world but it is a tr

91、end which cannot be ignored.This will create massive tension between the worlds largest military and economic powers but it will also bring opportunities for smaller countries in the region so-called China plus sourcing locations.These include many of the countries in the Indexs Top Ten which will e

92、xpect to close the gap on China in the coming years.Overall IndexChina14ContentsAt number two in the ranking,India has made significant progress in the last decade to modernize its logistics and supply chain industry and,by doing so,deliver strong economic growth.This has included introducing a Good

93、s&Services Tax(GST)as well as an electronic waybill for transportation providers crossing state borders which has reduced corruption and transit times.At the same time,the government has looked at ways of making logistics more efficient by addressing bottlenecks,introducing technology and streamlini

94、ng major transport infrastructure projects,often plagued by delays and mismanagement.In 2022 the government introduced a National Logistics Policy which has been developed to build on this progress to date.This will include the creation of a unified digital platform that will provide end-to-end visi

95、bility for importers and exporters as well as the creation of a multi-modal network that will leverage an under-utilized rail system.However,there is much to do if India is to attract more manufacturing from China although the country has made a good start(see feature on Apples decision to move some

96、 production to India on page 29).In terms of logistics,for example,the average turnaround time at an Indian port is 20-40 hours higher than the global average and considerable investment is required in Indias port,airport,road and rail infrastructure.While most developed countries have a single digi

97、t logistics cost to GDP ratio,the Indian costs have been in the 14 to 18%range for years.Raising barriers to capture supply chain valueHistorically,protectionist policies have meant that India has excluded itself from many Global Value Chains,thereby losing the economic benefits which these can brin

98、g.When Prime Minister Modi came to power many in the global community hoped that he would reduce barriers to international trade,opening up the market to foreign competition.However,in fact his policy response has been to raise duties further(up to 25%)on many imported intermediate products in order

99、 to encourage global suppliers to establish Indian operations and hence increase domestic value add.The so-called Phased Manufacturing Programme(PMP)started raising duties on specific components used in mobile phones in 2016 and rapidly expanded this list in subsequent years.The ambition of the PMP

100、was to ensure that up to 50%of the value of a mobile phone assembled in India was generated by Indian-based suppliers(rather than imports),thereby establishing an eco-system for foreign investment and(although it may sound counter-intuitive)allow Indian high tech companies to better participate in G

101、lobal Value Chains.This forms part of a broader Make in India policy discussed in more detail later in this document.The stance of the Indian government towards trade policy is complicated by internal politics.There are those which fear the impact which the entry of multinational corporations into t

102、he Indian market would have on small businesses,in particular retailers.Regulations have consequently constrained the ambitions of international retailers such as Walmart and e-commerce players such as Amazon.There are also those who believe that China provides the greater threat,dumping cheap,subsi

103、dized exports on the Indian market to destabilize the economy and support its political goals of expansionism.It is worth noting that Prime Minister Modi has ensured that India is one of the few countries in the Asian region to oppose Chinas Belt&Road Initiative,unlike its major rival and neighbour,

104、Pakistan.Either way,foreign companies are finding it increasingly difficult to navigate the regulatory framework in India.The risk is,as the world approaches a period of sustained economic downturn,that a neo-protectionist regime will isolate India further from globalized supply chains rather than i

105、ntegrate within them.This could counteract the impressive progress which India has made under Modis leadership towards becoming an advanced,Industry 4.0 enabled economy.India 15ContentsWhilst the investments made by the UAE over the last few decades in its transport and logistics infrastructure have

106、 propelled the country to the top echelons of the Agility Emerging Markets Logistics Index,there is no sign of any complacency,despite signs of global recession and deglobalization.Digitalization,the foundation of progressWhilst the development of ports,airports,road and rail networks are on-going,t

107、he government is also prioritizing its digital capabilities.It sees the growth of the e-commerce market as a major opportunity,facilitated by its already developed internet capabilities and advanced digital payment systems.Digitalization is regarded as being key to address many of the inefficiencies

108、 which exist in the UAEs international logistics and supply chain sector.A significant proportion of air and sea freight bookings are still undertaken by phone or fax;containers are often lost;20%of boxes do not turn up for their booked departure time;terminals are often congested;ships depart later

109、 due to problems with Customs or paperwork and there is poor visibility of ship arrival times.Many of these issues were laid bare by the Covid pandemic and this has created an imperative for investment in new Port Community Systems(PCS).However,there are also projects to develop disruptive technolog

110、ies such as the Internet of Things,autonomous trucks and ships,artificial intelligence as well as cybersecurity tools,all with the aim of creating high levels of supply chain visibility and resilience.Embracing trade liberalizationWhilst many countries have taken the political decision to turn their

111、 back on globalization,the UAE has doubled down on its long standing commitment to free international trade.This is hardly surprising given that its economy has benefited so much from the governments decision to develop the country as a major international hub serving Europe,the Middle East,India an

112、d parts of Africa.To this end the UAE has signed several significant trade deals with major emerging markets across the region and elsewhere.Amongst these include a wide-reaching deal with India,the UAE-India Comprehensive Economic Partnership Agreement(CEPA),which is hoped will increase trade from$

113、60 billion to$100 billion over the next five years.The agreement will remove 10,000 tariff lines from goods and commodities including oil&gas,textiles,agriculture and jewellery.In addition,a number of initiatives to facilitate cross-border trade between the two markets will be adopted;data will be s

114、hared with the goal of adopting Authorised Economic Operator(AEO)mutual recognition;there will be greater access to each others pharmaceutical markets;enhanced transparency on government procurement and a shared commitment to digital trade.The agreement will also allow the UAEs partners in the Gulf

115、Cooperation Council(GCC)to join if their own negotiations with India which commenced in 2022 are delayed.Additionally the UAE has made,or is in the process of making deals with Turkey,Israel,Indonesia and even Colombia,demonstrating the political priority which is being given to ensuring the UAEs po

116、sition in world trade.United Arab Emirates16ContentsMalaysia has retained its fourth place ranking in this years Index.The country has not been immune to the fall out from the global pandemic and many manufacturers were impacted by the whiplash effect of supply and demand sourcing decisions by their

117、 overseas customers.This has resulted in a policy decision by the Malaysian government to place resilience at the heart of its next five year supply chain plan.This involves a focus on what it calls local sourcing facilitation,that is,encouraging and facilitating major manufacturers in the country t

118、o use domestic suppliers,often SMEs,rather than those located in other countries.The government believes that buy local policy will reduce supply chain disruptions such as export bans,border closures or,indeed,the impact of Chinas zero tolerance approach to Covid which has been so damaging to GVCs a

119、cross Asia.This will not only increase resilience,but the government believes that it will also create spillover benefits cascading down to local businesses in the country.At the same time as this,investment in transport and digital infrastructure is on-going from a wide-range of sources including g

120、overnment,non-governmental and commercial financial institutions and foreign businesses.The Port of Tanjung Pelepas(PTP)provides a good example of this with the announcement in 2022 that it was expanding its capacity by a million twenty-foot equivalent units(TEUs)through a joint investment by its ow

121、ners,Malaysias MMC group and the Netherlands APM Terminals.A significant proportion of Malaysias foreign investment has also come from Chinas Belt&Road Initiative(BRI).This has attracted considerable controversy with fears that Malaysia would fall into a debt-trap leaving it beholden to China.Indeed

122、 these fears resulted in a change of government.Nevertheless,since the programmes creation,national and local governments in Malaysia have looked to the BRI for investment in critical infrastructure including ports,rail lines and industrial parks.As is the case with many of the top ranking countries

123、 in the Index,Malaysia has developed an Industry 4.0 policy to focus its future supply chain strategy.This involves using digital technologies to increase productivity(by 30%by 2030)whilst improving what it calls its ecological integrity and the quality of life of its people.This will involve:Equipp

124、ing the workforce with Industry 4.0 skill sets Developing enhanced digitalized logistics systems to promote interoperability Increasing the robustness of the regulatory framework to support adoption of transportation and logistics-related technologies Improving mobility through development and adopt

125、ion of centralized and open transport-related database,including traffic management Support R&D for Industry 4.0 technologies to develop low carbon mobility solutions Enhance efficiency in cyber security management to mitigate cyber risksMalaysia 17ContentsWhilst offering impressive opportunities,In

126、donesia has many supply chain and logistics challenges,a fact illustrated by its high proportion of logistics costs to GDP.Despite its strong position in the top ten of the rankings,many in the country believe that progress is not being made as quickly as might be expected,especially given the gover

127、nments aim to reduce the logistics cost ratio to 17%from 24%by 2024.In order to provide the basis for an economy-wide transformation,the Indonesian government has adopted a Making Indonesia 4.0 programme.This will focus innovation and development on five key sectors comprising electronics,chemicals,

128、automotive,food and beverage and textiles,all underpinned by enhanced logistics and supply chain processes.However,whilst the intention may be very sound,considerable progress will need to be made before companies in the market will have Industry 4.0 capabilities.One way to facilitate this would be

129、to remove many of the regulations relating to foreign investment.The easier entry of international companies into Indonesia would allow local businesses to benefit from the transfer of advanced technologies,especially those in the logistics sector which would gain from the introduction of digital pl

130、atforms,GPS and IoT sensor technology,robotics and automation to name just a few.Indonesia has recently adopted a digital National Logistics Ecosystem(NLE)plan which is designed to improve the flow of logistics data and goods,domestically and internationally.Its aim is to simplify business and gover

131、nment processes;enhance public and private collaboration as well as creating a digital payment service.Two of its major goals are to reduce transit times from arrival at port to arrival at warehouse and reduce congestion on Indonesias roads through better planning.However,according to reports,take u

132、p has been slow and connectivity with other platforms low,showing the progress that still has to be made if the government is to fulfill its ambitions.Indonesia has very close links with China which is its largest trading partner(both in terms of imports and exports)and second largest provider of fo

133、reign direct investment.Chinas zero tolerance approach to Covid and the disruption this caused for its manufacturing and supply chain industry has had a significant impact on Indonesias economy.Whilst China plus sourcing strategies may have mitigated the effects of the policy to some extent,the rene

134、wed growth of the Chinese economy;the relaxation on mobility restrictions for Chinese business travelers;increased investment activity and the cessation of stop-start production would far outweigh these benefits.Indonesia 18ContentsThe high oil prices caused by Russias invasion of Ukraine and the po

135、sitive impact which this has for the Saudi economy suggests that the country will make considerable progress up the rankings over the coming years.However,despite the short term gains,the Saudi government has been mindful of the prospect that at some stage its oil reserves will run out(although not

136、for many decades)and that there is a political imperative in the global economy to transition to non-fossil fuels.Consequently there have been significant moves to diversify into alternative sectors.Logistics has been one of these priority areas which has attracted considerable government and foreig

137、n investment.Planning for the futureTo achieve its ambition of economic diversification,in 2016 the country adopted what it called the Saudi Vision 2030 programme.As part of that effort,Saudi Arabia has spent more than$100billion on infrastructure and related projects intended to position it as a gl

138、obal logistics hub at the crossroads of Asia,Europe and emerging Africa.Its targets include developing 60 logistics zones to support exports,e-commerce and re-exports,in addition to encouraging trade through land ports;the growth of re-export revenues from SAR 42 billion to SAR 520 billion riyals;ex

139、port growth from SAR 185 billion to SAR 507 billion;and the expansion of the e-commerce sector from 6%to 23%of retail sales.In October 2022,a further initiative,Global Supply Chain Resilience,was launched which included the promise of a SAR 10 billion package of inducements to attract foreign invest

140、ment of up to SAR 40 billion to the market.According to a statement by the Saudi government,The Covid-19 pandemic,trade disputes and the geopolitical landscape have broken or weakened global supply chains,driving up commodity prices and disrupting production and distribution.This initiative aims to

141、strengthen the position of the Kingdom of Saudi Arabia in the global economy,and to mitigate the impact of global disruptions.The Global Supply Chain Resilience Initiative will leverage the Kingdoms resources,infrastructure and location to bring greater resilience to economies and companies across E

142、urope,the Americas and Asia.In effect,Saudi is positioning itself as a low risk,low cost and low carbon economy which would enable investors to access a large domestic market as well as reaching regional and global customers through its transport and logistics infrastructure links.Oil will obviously

143、 be a major factor in the economys development for many years to come.But the government wants to increase its level of value add(in a similar way,perhaps,to China and India)by using this resource to supply home-grown processing industries such as chemicals,pharmaceuticals,plastics and rubber.Buildi

144、ng regional and global linksAs well as encouraging FDI,Saudi has also been an active investor in other emerging countries creating and developing strategic trade corridors.For instance,trade with India is expected to grow threefold by 2030.Whilst exports of crude petroleum will be an important eleme

145、nt of this growth(Saudi is looking to invest$100 billion in Indias refining,energy and petrochemical industry)it will also target infrastructure and agriculture sectors.Likewise,the government also intends to develop its relationship with China,with trade expected to double by 2030.Its national oil

146、company,Saudi Aramco,already has long term agreements to supply Chinas refineries and chemical plants.However,it intends to align its own 2030 Vision with the aims of Chinas Belt and Road Initiative and has signed deals in a range of sectors including logistics and transport,energy,manufacturing,e-c

147、ommerce and petrochemicals,mining and housing.There is no doubt that Western markets will continue to be critical to the success of Saudi Arabias strategic vision.It is still heavily reliant on the price of oil for economic growth and a recession in Europe and the USA will inevitably depress oil rev

148、enues.However,in the medium term,emerging economies in Latin America,Africa and of course Asia will become increasingly important for Saudis economy as they will become relatively more important customers for oil.The decarbonizing West will still require an array of petrochemical products,including

149、plastics,chemicals and pharmaceuticals which Saudi will also be able to supply.In summary,Saudi Arabia has the resources and ambition to become a major regional and global hub over the next decade,becoming a conduit for trade between some of the fastest growing markets in Asia and Africa,as well as

150、serving the rest of the Middle East and parts of Europe.Its large domestic and export market will give it an advantage over other hub ports in the region which focus largely of transshipments.Its manufacturers will benefit from access to low cost oil and energy although investors should be cognizant

151、 of security risks,especially if relations with Iran deteriorate further.Saudi Arabia 19ContentsAgilitys Takeon Saudi ArabiaThe most exciting logistics markets in the world for logistics investment today is the Kingdom of Saudi Arabia(KSA).With the government investing heavily in the sector as one o

152、f the key pillars of its Vision 2030 plan,Saudi Arabias ambition and execution are both helping the country make rapid progress.In 2021,the government announced that more than SAR 500 billion will be spent in the next decade on the development of airports,seaports,rail and other infrastructure.In 20

153、22,Saudi launched the Global Supply Chain Initiative,with the aim of attracting$10 billion from investors to position the country as a global supply chain hub.The initiative included SAR 10 billion($2.66B)worth of financial incentives.KSAs new Special Integrated Logistics Zones,as well as the develo

154、pment of 40 industrial clusters and five economic zones,are expected to further help position the country as a leader in the region and beyond.Agility is investing heavily in developing high-quality supply chain infrastructure in the Kingdom,and has developed more than 1 million sqm of logistics par

155、ks across Riyadh and Damam.(Agilitys Riyadh warehousing complex was the first in the GCC to receive EDGE Advanced green building certification;the complex had to be 40%+more energy efficient than others in the market in order to earn the designation.)In 2022,Agility announced that it would invest$16

156、3 million to further develop a warehousing complex on a 576,760 SQM parcel south of Jeddah,with construction starting in Q1 2023.20ContentsAlthough Qatar has recently been thrust into the glare of the worlds media by the global energy crisis and its hosting of the 2022 FIFA World Cup,its development

157、 as an important regional and global supply chain and logistics hub has been many years in the making.As with many countries in the region,it has made efforts to diversify from its dependence on hydrocarbon based revenues and,perhaps paradoxically,the present high price of Liquid Natural Gas(LNG)wil

158、l provide the government with more resources to pursue this ambition.The development of the Qatar Freight Master Plan was due for completion by the end of 2022 as part of the countrys 2030 Vision policy.This sets out a long term transition to sustainable logistics,balancing population growth and urb

159、an development with the demand for transport and logistics services.Encouraging more manufacturers to base their operations in the country will also be critical in order to rebalance trade which is presently heavily weighted in favour of imports.A priority for the country is investment in Cold Chain

160、 facilities and services,catering for food and pharmaceuticals.Qatar has become a major hub for the region,with the majority of its temperature controlled warehouses based in Free Zones and distributed internationally by land.Qatars government has recognized the importance of digitalization to its e

161、conomy and the supply chain sector in particular.It has entered into strategic partnership with major global technology players such as Google and Microsoft to develop cloud services which will allow customers to run workloads locally,creating a regional digital hub.This will be important as the cou

162、ntry adopts a range of Industry 4.0 initiatives to digitalize and automate its supply chains.In the shorter term the World Cup has provided a major boost to the countrys logistics industry.Not only was Qatars population expected to rise by 1.8 million people throughout the tournament,translating int

163、o demand for hotel,food and medical requirements,but billions of dollars were spent in the run up on the construction of football stadia,transport infrastructure and hospitality facilities.This has resulted in a huge surge in demand for domestic and international transport services,warehousing and d

164、istribution as well as freight management and border processes.Obviously,hydrocarbons continue to play the dominant role in Qatars economy and intense competition for LNG on a global basis has led to significant new investment in gas fields and the transport infrastructure required to move the gas t

165、o global markets.For example,Qatars liquefaction capacity will increase from 77 million tonnes per year in 2022 to 126 million tonnes per year by 2027.As well as investment at home,the government has been keen to invest in port infrastructure around the world targeting the UK,US,Egypt and Germany,am

166、ongst others.This will provide the country with exclusive long term markets for its gas products,with commensurate economic and political leverage.Qatar 21ContentsCategorized as a Southeast Asian Lost Cost Country(LCC),Thailands economy has over the past two decades become increasingly integrated wi

167、thin Global Value Chains(GVCs)as companies have increasingly unbundled and out-sourced parts of their production.Although this has created many opportunities,the trend has meant that its economy has also become highly vulnerable to rising costs and supply chain disruption,such as that resulting from

168、 the Covid-19 pandemic.It was particularly affected by the capacity challenges faced by the shipping industry on the transpacific lanes and the resultant high rates.However,the country has also become a beneficiary of the China plus risk mitigation sourcing strategies being increasingly employed by

169、global manufacturers.Its high value production ecosystems,especially important in the electronic manufacturing services(EMS),medical equipment and agritech sectors,have provided a ready alternative for companies wishing to migrate away from or complement their Chinese suppliers.Whilst other Southeas

170、t Asian countries,such as Vietnam,may have lower labour costs,Thailand is more technologically advanced,especially in the green economy including the manufacture of electric vehicles(EVs).This has provided the country with a significant competitive advantage in the region.For Thailand to continue it

171、s development as a major supply chain hub in the region the government recognizes that it will need to promote further investment in its transport and digital infrastructure at the same time as ensuring inclusive and sustainable growth.The government also believes that small and medium-sized enterpr

172、ises(SMEs)can play a major role in the growth of the economy if it is able to integrate them within GVCs.The government has developed what it calls Thailand 4.0 strategy which has the goal of creating a high-income status country by 2036.This includes prioritizing 12 sectors,not least those of logis

173、tics and digital,as well as focusing investment on infrastructure in the Eastern Economic Corridor(EEC)area which it intends will become a gateway to both Southeast Asia and the Asia Pacific region.Internationally,Thailands membership of the ASEAN group of countries and its signing of the Regional C

174、omprehensive Economic Partnership(RCEP)Agreement(which includes ASEAN members,Australia,China,Japan,Republic of Korea and New Zealand)will liberalize market access.As a result,Thai exporters will see lower or zero rate tariffs on tens of thousands of products and they will also benefit from more adv

175、antageous rules of origin regulations which will encourage global manufacturers to source within the region.Thailand 22ContentsMexico is at number nine in the Agility Emerging Market Logistics Index.However,given its location,scale and proximity to the worlds largest consumer market,USA,there is ple

176、nty of potential for it to move higher in the rankings.Due to the growing interest in near-sourcing as a result of the challenging conditions and relationship with China,it has often been said that this should be a golden era for investment in Mexico.For years,large parts of the Mexican economy have

177、 been integrated within US supply chains leading to economic growth in border cities and states.The Covid pandemic has encouraged a new wave of investment in cross-border factories as manufacturers have sought to avoid the problems on transpacific routes caused by congestion,delays and exceptionally

178、 high freight rates.With around 88%of exports to the US routed by road and rail,land-based logistics networks were not as badly affected as those reliant on movements of containers through the West Coast ports,although Mexican shippers were certainly not immune from the wider supply chain chaos caus

179、ed by bottlenecks and congestion across the region.Setting aside the short term disruption which had largely subsided by the end of 2022,it would seem evident that the Mexican economy will significantly benefit from the deteriorating relationship between US and China.However,this will only occur if

180、the Mexican government is able to build a more attractive business case for foreign investment.Despite being the 15th largest recipient of FDI in 2019,its record in this respect is mixed,as indicated by the stagnating of exports to the USA even prior to the Covid pandemic.Opportunities and challenge

181、s for MexicoMexicos proximity and access to the US market through the United States-Mexico-Canada Agreement(USMCA)(the successor to the North America Free Trade Agreement(NAFTA)has long made it a near-sourcing location for manufacturers looking to supply the US market cheaply,quickly and with easier

182、 oversight of production processes and quality control.Moving goods from Mexico to the USA takes only weeks compared with several months spent in transit from China.Recent duty increases on goods imported to the USA from China have reinforced Mexicos position as an attractive alternative:the composi

183、te tariff rate imposed on Mexican goods is just 0.04%compared with 19.2%on Chinese imports.However,the market is far from straightforward and Mexico has challenges to overcome if it is to maximize the opportunities which China plus sourcing strategies offer.Mexico 23Contents LabourThe low cost of la

184、bour in Mexico is one of the main reasons why foreign manufacturers have chosen to base their production operations in the country.According to IHS Markit,the average manufacturing industry wage in 2022 in Mexico is$3.90 per hour,compared with$5.58 in China.The comparable wage in the USA is$30 per h

185、our.Mexico also has an abundant and growing resource of labour with an estimated 7 million people available for work.However,wages are rising both as a result of market forces and government policy.The statutory minimum wage jumped by 20%in 2022 and pension reforms will increase employer contributio

186、ns.The government will have an important role to play in creating a well-educated and skilled workforce.This will help employers as well as workers who will benefit from longer term and better remunerated positions within the formal jobs market.Growth is presently being constrained by a lack of mana

187、gerial calibre candidates with manufacturers competing to hire from a small top-talent pool.The market also lacks skills which would allow the economy to break into high tech,advanced manufacturing such as semi-conductors.Security&CorruptionThe security situation in Mexico is one of the biggest head

188、winds to economic growth.One of the greatest risks related to supply chain involves the theft of cargo from trucks en route to the border with the US.Drug cartels also target legitimate shipments in which to infiltrate illicit goods.Corruption is also a major problem.Government officials,including C

189、ustoms officers and law enforcement agents,can work in collaboration with organized crime.Mexicos position in Transparency Internationals Corruption Perception Index has fallen every year since 2012 and it is now ranked 124th out of 180 countries.Government investment policyThe Mexican government is

190、 prioritizing investment in transport infrastructure,with a financial package of$38.6 billion planned in 2022 to improve roads,bridges and railways.In addition,the US government has committed to invest$1.4 billion to build and modernize land ports on the US-Mexican border,matching that promised by P

191、resident Obrador.However,the criticism has been levelled that Mexico has the lowest level of public investment amongst Organization for Economic Cooperation and Development(OECD)countries.The government also intends to spread its investment across the country,not just on the regions which already ha

192、ve a focus on manufacturing and logistics,but poorer areas especially to the south.Although politically popular,this has meant a misalignment between industry needs and the infrastructure development which may not be in the long term economic interests of the country given its limited resources.24Co

193、ntentsIn 2022,Vietnam moved into the Top Ten of the Index,illustrating the success which the country has had at developing its supply chain industry as well as showing how it has been able to benefit from China plus sourcing strategies of major multinational manufacturers.It has been able to attract

194、 many of the worlds most prestigious companies to its market,particularly those in the high tech sector.Electronics and consumer electricals accounted for 42%of exports in 2020,soaring from just 13%in 2010.Apple has been at the forefront of moving production to the market.In 2020 it began planning t

195、o expand assembly operations in Vietnam,asking Foxconn to expand its assembly operations in the country.Sony,Samsung and LG have also expanded production in Vietnam,building airfreight infrastructure in Hanoi to support their assembly of mobile phones.Certainly,Vietnam is at the front of the queue f

196、or the relocation of electronics production from China.However,whilst the country is exploiting these opportunities,it faces a major challenge to move up the value chain.For example,whilst Apple has created a production eco-system in the market,sourcing from 21 different companies,none of these is V

197、ietnamese.Whilst China and India have focused their industrial policy on the creation of national champions,building brands instead of providing services to global OEMs,the Vietnamese market can be characterized as a low-cost assembly location.This may suit global manufacturers,looking for cheap lab

198、our in the region as wages and risk rises in China,but it means that it is not able to create value which would enable its manufacturing industry to develop.This will mean that it risks becoming stuck in a cycle of decline,faced with:High energy usage Low labour productivity Low efficiency High leve

199、ls of pollution Low investmentHowever,there is also the risk that the market would get stuck in the middle income gap,where rising labour costs force foreign manufacturers to look elsewhere.If Vietnam is to move further up the rankings it will have to provide investors with a complete package of pro

200、duction eco-systems comprising multiple suppliers,strong ICT links,well trained workers and good logistics.The latter will be critical to its success with logistics costs presently running at 20%of GDP,7 percentage points higher than the average in Asia.Transport infrastructure projects are often sl

201、ow to come to fruition plagued by delays,bureaucracy,mismanagement and a culture which penalizes risk taking.Even though Vietnam is exceptionally well placed to benefit from Chinas difficulties,the government has much work to do if it is to create a robust industrial environment which will attract h

202、igh quality manufacturers and create value adding local suppliers.Vietnam25Contents1China8.4702India8.0403Indonesia6.3404Qatar5.9105UAE5.6006Brazil5.4217Saudi Arabia5.3818Mexico5.37-29Malaysia5.29010Pakistan5.16611Nigeria5.15112Egypt5.15213Turkey5.14-314Thailand5.11-115Kuwait5.07316Vietnam5.02117Ban

203、gladesh5.02418Philippines5.02119Russia5.01-820Bahrain4.99021Oman4.95122Jordan4.88223Algeria4.88324Argentina4.87125Chile4.83-226Lebanon4.81327South Africa4.81428Uruguay4.78029Peru4.72130Colombia4.67231Kazakhstan4.66232Morocco4.64233Tanzania4.62434Tunisia4.61135Ghana4.61136Kenya4.60237Iran4.57-2238Ecu

204、ador4.50239Sri Lanka4.49040Venezuela4.48141Libya4.48442Paraguay4.45443Cambodia4.45044Myanmar4.44045Bolivia4.44-346Ethiopia4.42247Uganda4.41048Angola4.37149Ukraine4.34-2250Mozambique4.250Domestic Logistics OpportunitiesChina top again but storm clouds gatherOnce again the top three ranking in the Dom

205、estic Opportunities sub-Index remain unchanged with China,India and Indonesia retaining their positions.Despite the well documented problems faced by China,the Index shows how important the market is in terms of size of economy,population and growth prospects.Other attributes such as urbanization,di

206、stribution of income and the size of the contract logistics and parcels delivery sector make the market impossible to ignore.The sheer scale of the country will mean that it will remain an investment priority in terms of logistics and supply chain for many years to come,especially once the governmen

207、ts zero tolerance Covid policy has been removed.However,the impact of intermittent lockdowns of various Chinese cities is inflicting considerable pain on the economy with many manufacturers reporting falls in output of up to 40%in affected regions.Economist Global Data believes that Chinas GDP will

208、reach just 4.5%in 2022,well below the governments target.Its share of the world export market is also likely to decline.Global fashion brands,such as Nike,have faced the double hit that,as well as closing factories,they have also been forced to shut their retail outlets for the duration of each lock

209、down.One estimate suggests that sales have dropped by more than 50%in affected areas.Looking ahead,there are a range of other headwinds facing the country,including not least the recent societal unrest,its stance on Taiwan and security concerns in the West as it flexes its economic,political and mil

210、itary muscles on the global stage.This has led to other markets benefiting from so-called China plus sourcing strategies which have been implemented by manufacturers and retailers in an attempt to avoid US tariffs,legislation on the export of advanced technologies to China from the West and the ethi

211、cal fall out from the treatment of the Uyghur community in the Xinjiang region.Make in India policy brings rewards and costsIndia has retained its position at number two in the rankings.The Make in India policy,initiated by Prime Minister Modi in 2014 as a way of encouraging investment in advanced m

212、anufacturing as well as fostering innovation and skill development,has been highly successful at promoting advanced manufacturing capabilities.In much the same way as China,India has prioritised the capture Domestic Logistics Opportunities26Contentsof higher levels of supply chain value by encouragi

213、ng the development of Indian-based suppliers rather than relying on other Asian countries for the import of intermediate goods.The aim of the policy has been to propel double digit economic growth,create 100 million additional manufacturing jobs and increase manufacturings share of the economy to 25

214、%by 2022(a target now pushed back to 2025).At the same time as encouraging Indian industry to become more integrated with Global Value Chains,the policy has been designed to protect local manufacturers and retailers by putting up barriers to market entry and increasing tariffs.At the very least,this

215、 sends out mixed messages to potential investors which will not be conducive to economic development.As we highlight below,Amazon is pulling out of the market partly due to protectionism,whilst in the section on International Logistics Opportunities,we show that paradoxically Apple is increasing its

216、 investment.India is an example of how many countries in the Emerging World view globalization.Many want to reap the undoubted rewards of integrating with global markets,but at the same time they want to protect their own markets from global competition.Whilst China has successfully blazed this trai

217、l,it is unclear if other markets,such as India,will have the economic and political heft to have it both ways.Brazil falls but Egypt soarsBrazil saw its ranking fall by three places as it undergoes a period of economic and political upheaval.According to foreign affairs think tank,Chatham House,the

218、country is experiencing rising poverty and food insecurity with more than 33 million Brazilians in famine conditions and 63 million below the World Bank poverty threshold.The country is also split following a narrow victory in the polls by leftist Luiz Incio Lula da Silva over the conservative Jair

219、Bolsonaro.GDP is expected to be very weak in the coming years whilst inflation has already taken hold.Domestic investment in infrastructure will be difficult to maintain with the countrys fiscal position so precarious.The biggest mover in the top ten was Egypt which climbed five places to number nin

220、e,displacing Turkey.Egypt has been one of Africas success stories over the past decade,outperforming most markets in the Middle East,North Africa and Sub-Saharan region,despite the impact which Covid has had upon its economy,especially tourism.The country now accounts for over a fifth of the contine

221、nts manufacturing value add and the governments business friendly approach has been particularly successful at attracting international investors,not least in the high tech sector.The government has identified that embracing Industry 4.0 will be critical to the future success of its economy and its

222、efforts so far have been focused on modernizing business processes fostering technological expertise to achieve this goal.Egypts government has initiated a$4 billion investment programme aimed at modernizing and increasing the capacity of the countrys ports on the Red Sea and the Mediterranean.This

223、will not only aid the throughput of container traffic but is also designed to turn the country into an energy hub,including Liquid Natural Gas(LNG)terminals.The development of industrial parks,both public and private,will play an important role in the countrys economic growth.Many of these parks for

224、m part of specialized sector clusters,such as furniture or technology,helping to develop an eco-system of relevant competences and foster co-ordination between companies.The government hopes that they will facilitate the development of continental value chains.Global e-tailing platform,Amazon,announ

225、ced in November 2022 that it was intending to discontinue its Amazon Distribution business which serves retail customers in Bengaluru,Mysore and Hubli with e-commerce wholesaling services.The service was largely aimed at kiranas,neighbourhood nanostores based in urban areas.Part of Amazons problems

226、in the market come from well-resourced local competitors,such as Reliance Retail,Meesho and DealShare.However,the government has also put many barriers in its way including legislation which bans foreign retailers from holding inventory.This means that multinational retailers can only do business in

227、 India if they do so through stakes in local companies.Proposed legislation may even remove this loophole.Amazon retreats from IndiaEgypt prioritises port investment27ContentsAgilitys TakeThe Gender Gap:132 Years to Close?How big is the gap between men and women when it comes to economic opportunity

228、,education,health and survival,and political empowerment?Big enough that it would take 132 years to erase at current rates.That is the sobering news in the World Economic Forums 2022 Gender Gap Report.It is especially alarming at a time when developed and developing countries alike are looking for w

229、ays to unlock their potential and spur sustainable,inclusive growth.Global gender parity in labor force participation is actually moving backwards,widening sharply since the pandemic struck in 2020.Thats when unemployment spiked in most countries.Across the board,jobless rates among women have been

230、higher as millions had to prioritize child care and other care-giving roles that often left them homebound.The report says women are occupying a growing percentage of leadership roles.But that good news is tempered by the fact that female leaders are overrepresented in a small handful of sectors suc

231、h as Non-Governmental Organization(NGO)and education while being almost absent from others,such as infrastructure and manufacturing.With the possibility of a global slowdown looming,emerging markets would do well to remember that theres a powerful correlation between the prosperity and stability of

232、a society and the equality of opportunity it affords women.28Contents1China9.7502India7.4503Mexico6.3204Vietnam6.0315Thailand5.98-16Indonesia5.8907UAE5.8928Malaysia5.88-19Saudi Arabia5.74210Turkey5.70-211Brazil5.42112Russia5.41-213Philippines5.28014Chile5.18015Peru5.12016Morocco5.09117Colombia5.08-1

233、18South Africa5.00119Qatar4.96120Oman4.88121Jordan4.75122Sri Lanka4.73123Egypt4.72324Bahrain4.70125Kazakhstan4.66-126Ecuador4.65127Kenya4.65128Kuwait4.64429Pakistan4.63230Argentina4.63-131Lebanon4.61-132Tunisia4.48133Bangladesh4.48834Cambodia4.48035Bolivia4.46136Uruguay4.45237Ghana4.44038Ethiopia4.4

234、0439Mozambique4.39040Nigeria4.39341Uganda4.38-142Paraguay4.38-743Ukraine4.38-2544Angola4.30045Myanmar4.27046Algeria4.24147Tanzania4.14148Iran4.11-249Venezuela3.96050Libya3.810International Logistics OpportunitiesUnsurprisingly given its dominant position in world trade,China heads up the rankings fo

235、r International Logistics Opportunities.It has an unassailable position in terms of its trade;air and sea freight forwarding and international express markets;its level of air cargo and shipping connectedness with other countries around the world and the efficiency of its border processes.However,th

236、ere is no room for complacency as this year has shown.Political priorities in the shape of zero tolerance of Covid have had a disastrous effect on Chinas reputation as a reliable sourcing location for global manufacturers and retailers and this is leading to the rebalancing of global value chains ac

237、ross the region.Chinas zero Covid policy still causing supply chains chaosIn October 2022,disturbing pictures emerged from China showing workers at Foxconns Zhengzhou plant responsible for making around 60%of Apples iPhones staging a break out by scaling walls in order to avoid being locked down wit

238、hin the factory.A report in the Financial Times suggested that although production would be switched to alternative facilities,up to 10%of Apples global output was likely to be affected.Lockdowns are having disastrous consequences for international logistics.A reduction in trucking capacity in Shang

239、hai of 45%in spring 2022 resulted in 80%of vessels being delayed,compared with just 20%two years earlier.Imports were also affected with containers waiting for up to 12 days for collection compared with pre-lockdown 4-5 days,according to digital forwarding platform,Freightos.Most recently in October

240、 authorities locked down the north eastern port city of Ningbo resulting in the closure of terminals and warehouses.They also instituted a whitelist of Covid-clear truck drivers although this did not prevent a subsequent outbreak amongst the driving community.Such disruptions and capacity constraint

241、s as these have led to falling export volumes which have combined with weaker demand in the US and Europe to put downward pressure on shipping rates.Air cargo volumes and rates also remain weak for the same reasons.International Logistics Opportunities29ContentsThe stand out climber in this years to

242、p ten of the International Logistics Opportunities rankings is the United Arab Emirates(UAE).The UAE has embraced trade liberalisation measures at a time when many other countries are once again embracing protectionist policies.For instance,the India-UAE Comprehensive Economic Partnership Agreement(

243、CEPA)entered into force in May 2022,which is steadily boosting the volumes of trade between the two countries.The main commodities between these two countries benefiting from the trade agreement include electronics,perishables,retail goods(including textile and apparel),and chemicals.This is driving

244、 increased shipping and air cargo services,such as Maersks Shaheen Express which will rotate throughout the India-UAE-Saudi Arabia corridor.Outside of the top ten,one of the biggest movers is Egypt rising four places to number 22.Despite being one of Africas largest markets,its focus lies very much

245、on trade with Europe,Asia and North America.Links with the rest of the continent,with the exception of its North African neighbours,are weak and only 15%of its exports overall are shipped to African destinations.However,its membership of the African Continental Free Trade Area(AfCFTA),which will rei

246、nforce its connections with 32 new trade partners,could be the catalyst for a change in emphasis in trade policy and deliver a host of new opportunities.These problems have resulted in significant volatility and uncertainty for global manufacturers and retailers and this in turn has led to increasin

247、g levels of inventory;orders being placed earlier and most critically for Chinas economy the use of suppliers based in neighbouring countries.Vietnam has been a key beneficiary of this trend,its furniture industry,for example,grew its share of global exports from 11%in 2019 to 17%in 2022 at the same

248、 time as Chinas has fallen from 61%to 53%(source:MDS Transmodal).Although rising Chinese labour costs,the imposition of Trumps tariffs and a whole host of risk mitigation measures taken by manufacturers have also been responsible for China plus sourcing strategies,lockdowns for many are proving to b

249、e the final straw.Perhaps the most high profile company to look elsewhere has been Apple for so long synonymous in many peoples minds with the trend of low cost out-sourcing from China.Asian countries to benefit from China plusHighest climbersApple has announced that it is to manufacture its latest

250、iPhone 14 in India,marking a significant evolution in its production strategy with implications for its and its competitors supply chains.The move is part of the global tech giants plans to diversify its production base from China,a market which has seen considerable disruption over the past two yea

251、rs due to zero-Covid lockdown policies.Tensions between the US and China have also cast doubts over the longer term prospects of US high tech companies manufacturing products in China.For instance,new US legislation has allowed for the banning of the export of advanced semi-conductor chip technology

252、 to China.It is believed that as well as assembly operations,Apple will use more Indian suppliers(presently many intermediate components are sourced from China)helping to develop a production eco-system and reduce input costs.This will,in turn,encourage other high tech manufacturers to the country a

253、s levels of know-how,a skilled work force,technology and transport infrastructure improve.Many competitors,such as Samsung,may also follow,keen not to lose competitive advantage in a fast growing market.Apples move shows a high degree of confidence in the Indian market both as a design and productio

254、n hub as well as a consumer market.It also forms part of an industry-wide trend of increasing resilience through optionalization or China plus supply chain strategies.It is not clear what proportion,if any,of Apples iPhones will be exported to the global market.However,it certainly gives the company

255、 more options should manufacturing in China become more difficult or,indeed,impossible.Apple ramps up production in India30ContentsBusiness FundamentalsAs opposed to scale and prospects,the Business Fundamentals Index measures how easy it is do business in a particular market from a regulatory,opera

256、tional and commercial perspective.Therefore,it takes into account such metrics as the burden of governmental regulations,the robustness of legislation pertaining to property rights,the ability to enforce contracts as well as levels of crime and violence,corruption,quality of infrastructure and acces

257、s to credit.Consequently,whilst the two previous sub-indices were dominated by large markets such as China and India,smaller but well run countries make up a large part of the top ten.The UAE once again can claim to provide the most robust framework in which to do business,followed this year by Qata

258、r and Saudi Arabia.Other Middle East/North African countries in the top ten include Oman,Bahrain,Morocco and Jordan.Rule of law essentialOne of the reasons for the preponderance of Middle Eastern countries in the top ten is the stability provided to companies by a robust legal system.The application

259、 of international law is a prerequisite for business confidence and the UAE has received a boost in this regard from increased cooperation with English courts.Abu Dhabi and Dubai courts will be recognised by their English counterparts,upholding principles of reciprocity.Although this agreement will

260、have specific legal implications,more generally it provides international businesses with trust in the processes of the UAE legal system,something which cannot be said for all emerging markets.Saudi Arabia has also passed a new Companies Law which it is claimed will boost investment in the market in

261、 line with Saudi Vision 2030.The new law will provide investors greater flexibility and protection of their business interests as well as allowing some forms of companies to raise finance through the issue of bonds.At the other end of the scale,6 of the bottom 10 emerging markets are located in Afri

262、ca,including Angola,Mozambique,Libya,Ethiopia,Nigeria and Uganda.This highlights the lack of governance,the incidence of crime,the fragile security environment as well as weak infrastructure throughout the region.However,there are shining examples of more successful African countries,not least Ghana

263、 which rose 6 places in the index to 22nd position just ahead of South Africa in 23rd and Kenya in 24th.Unlike many of its neighbours,Ghana has been 1UAE9.1002Qatar7.9223Saudi Arabia7.8604Malaysia7.85-25Oman7.2416Bahrain7.15-17China7.1118Chile7.01-19Jordan6.72110Morocco6.45-111Kuwait6.23112Kazakhsta

264、n6.19-113Uruguay6.14014India5.94015Turkey5.80116Indonesia5.77-117Thailand5.77018Egypt5.62119Vietnam5.61120Russia5.13-221Tunisia5.06122Ghana5.00623South Africa4.99024Kenya4.97125Mexico4.93-426Tanzania4.70027Algeria4.61-328Colombia4.55229Ecuador4.49-230Peru4.48-131Iran4.38432Sri Lanka4.32133Philippine

265、s4.31-134Paraguay4.30235Argentina4.24536Cambodia4.16137Brazil4.13238Pakistan4.13-439Ukraine3.95-840Uganda3.91141Lebanon3.79-342Bolivia3.74043Nigeria3.62044Bangladesh3.53045Ethiopia3.21046Mozambique2.17047Myanmar2.04148Libya1.96149Angola1.90-250Venezuela1.560Business Fundamentals31Contentsable to cre

266、ate an attractive economic and regulatory environment for investors and domestic companies not least due to its stable government and liberalising policies.However,there are still high levels of bureaucracy in the market which stifle innovation and which will prevent businesses from benefiting from

267、greater integration with the worlds economy.A lack of governance and the absence of a policing or security framework can lead to a rise in criminality which compromises supply chains,both from the perspective of cargo crime and theft as well as from smuggling and counterfeiting.Even global logistics

268、 hubs in best-in-class markets such as the UAE and Saudi Arabia are vulnerable to these risks.Smuggling and counterfeiting risksIt is noticeable that of the Latin American countries in the Index,Mexico has fallen the fastest,by 4 positions to 25th.The security situation in Mexico is one of the great

269、est headwinds to its economic growth.One of the greatest risks related to supply chain involves the theft of cargo from trucks en route to the border with the US.Drug cartels also target legitimate shipments in which to infiltrate illicit goods.Corruption is also a major problem.Government officials

270、,including Customs officers and law enforcement agents,often work in collaboration with organized crime.Given that Mexico appears in the top ranks of both domestic and international logistics opportunities,the country is clearly being held back by its challenging security and governance environment.

271、Spotlight:Emerging Market hub vulnerability to illicit tradeOne of the major challenges faced by many logistics hubs is how to deal with the high levels of smuggling which can occur at such locations.Some countries are particularly vulnerable not only due to the high volumes of cargo flows which are

272、 concentrated at their ports and airports but also due to the number of Free Trade Zones(FTZs)located in their markets.FTZs,by their very nature,have lower administrative oversight as well as simplified customs procedures which can facilitate illegal activity by criminal gangs such as trafficking co

273、ntraband.High level of re-exports make busy shipping hubs particularly attractive for criminals as locations to infiltrate counterfeit goods or drugs into shipping containers in order to hide their true point of origin.In much the same way as they function for legitimate trade,ports and airports in

274、emerging markets can act as transit points for the movement of illicit goods to Western countries.In this respect the growth of small parcel volumes driven by the importance of e-commerce is clearly of significance.The Organization for Economic Cooperation and Development(OECD)estimates that 84%of s

275、eized shipments of counterfeit footwear and two thirds of electronic devices involved postal parcels or express shipments.As parcels volumes climb,this problem will only become worse unless the root cause is addressed.Overall,it can be concluded that counterfeiters prosper in markets where there is

276、poor governance;little oversight of free trade areas and high levels of corruption.Once they have accessed the global logistics networks through sea,air and then injected fake goods into post and parcels networks there is little that the authorities in developed markets can do.Their own agencies are

277、 being overwhelmed by the sheer volume of parcels which are being generated.In order to help address the problem,the UAE has put in place a range of measures including better physical security;training security professionals and comprehensive screening standards.Through Dubai Customs,it is working a

278、longside the European Anti-Fraud Office(OLAF)to investigate incidences of counterfeiting and implement robust systems which reduce their probability.32ContentsKenya has been a trailblazer in African start-up initiatives.As a result,it accounts for about a third of the continents start-up incubators

279、and accelerators,according to the World Economic Forum.The Kenyan government has been quick to enable and implement new legislation when required to encourage development,and this has resulted in faster start-up execution.The leading example is the legal framework put in place to allow for the widel

280、y adopted payment platform M-Pesa.M-Pesa transformed the mobile banking service sector initially in Kenya,but has now grown to Tanzania,Mozambique,DRC,Lesotho,Ghana,Egypt and South Africa.Kenya has also been very entrepreneurial and embraced an incubator hub ecosystem,where start-ups can access know

281、ledge,advice and funding helping to support the growth and implementation of innovative solutions.GDP growth in Kenya is forecasted to be amongst the strongest in the region in 2023,according to the IMF.Kenya continues to develop as the regional centre for trade,and the gateway for the East Africas

282、landlocked markets.The expansion of the EAC to include the Eastern DRC is a further step in Kenyas dominance in regional trade.The peaceful conclusion of the 2022 presidential vote is a good signal for Kenyas institutional strengthening and political stability.Agilitys TakeKenya33ContentsDigital Rea

283、diness1India7.6142UAE7.37-13Malaysia6.72-14China6.63-15Qatar6.3826Saudi Arabia6.30-27Indonesia6.2118Thailand6.04-29Philippines5.99110Oman5.81511Kuwait5.76112Kenya5.56513Chile5.55-414Turkey5.50-315Vietnam5.43-116Bahrain5.34617Uruguay5.22218Brazil5.19-219Iran5.15120Jordan5.14721Ghana5.14222Russia5.14-

284、923Sri Lanka5.12724Mexico5.11-625Kazakhstan5.10326Pakistan5.06-227South Africa5.01-628Egypt5.00-229Ukraine4.91330Lebanon4.80831Cambodia4.73632Paraguay4.72333Morocco4.69334Argentina4.68-935Bangladesh4.63-136Nigeria4.61-537Peru4.58-438Tanzania4.58139Colombia4.53-1040Tunisia4.39141Uganda4.24-142Ecuador

285、4.03143Venezuela3.99144Algeria3.91-245Ethiopia3.64046Bolivia3.45047Mozambique3.22048Angola3.11049Myanmar2.79050Libya1.840Digital ReadinessAdopting Industry 4.0This category,introduced for the first time last year,looks at a range of what could be termed Industry 4.0 measures to assess how equipped a

286、 country is to face the challenges of a digital yet more sustainable future.It uses metrics which provide an insight into how well a country fosters entrepreneurs and start ups;access to banking amongst the population;levels of adoption of renewable energies;digital skills and the importance of e-co

287、mmerce to its economy.This year India tops the ranking for digital readiness,moving up four places.Its rise to the top has largely been driven by the increasing importance of e-commerce in the country at a time when adoption has slowed in other emerging markets.Six Indian e-commerce companies became

288、 unicorns in 2022 with a total valuation of$7.9 billion and three went public,Ethos,Delhivery and Fone4.34ContentsThe adoption of e-commerce is not just related to the technology which underpins the platforms.Other factors,measured by the sub-index,are just as critical,such as the number of people w

289、ho have access to bank accounts.Although Cash On Delivery(COD)is frequently used in many parts of the world where buyers do not have accounts,this is costly and inefficient.The buyer often refuses the delivery which nevertheless is paid for by the retailer and even if the delivery is successfully ma

290、de,the cash then needs to be repatriated up the supply chain.Additionally,no access to a bank account prevents micro-retailers from engaging with platforms which could allow them access to world markets.Despite the traditional prevalence of cash in many emerging market societies,the Covid pandemic h

291、as been a catalyst for change in the use of COD in the e-commerce supply chain.Governments such as Indonesias(7th in digital readiness index and rising one place)introduced countermeasures to prevent the spread of germs on notes and coins and,consequently,the COD rate is expected to drop from 16%to

292、11%by 2025.In contrast,use of mobile wallets has grown from 23%in 2019 to 28%in 2022.58%of e-commerce transactions in Indonesia are carried out on a mobile device.Of course,access to Broadband is also essential for the growth of the e-commerce market.Nine out of ten of the leading countries in the I

293、ndex have 4G penetration rates of 80%or over(Saudi Arabia being the exception with a rate of 79.2%).At the other end of the scale,the penetration rate of many of the lowest ranked countries is in the mid-50%range.Clearly investment in ICT infrastructure will be essential if these markets are to reap

294、 the economic rewards of Industry 4.0.Digital finance and broadband penetration key to e-commerce adoptionSpotlight:Indias double edged swordSince the election of Prime Minister Narendra Modi,the Indian government has been committed to a Make in India policy and to achieve these goals ensuring that

295、the economy becomes digitally ready is critical.Creating manufacturing ecosystems which support advanced manufacturing is part of its strategy,and this involves the encouragement of a vibrant start up and Micro,Small and Medium Enterprises(MSME)sector.To this end a specialist ministry has been estab

296、lished,coordinating a range of schemes and support packages which includes financing such as the Startup India Seed Fund.Whilst encouraging technology start ups,the government is also pursuing a protectionist policy to discourage global platforms and more specifically ban 59 Chinese apps from the ma

297、rket.These have included ByteDances TikTok,Tencent Holdings WeChat and Alibabas UC Browser.In addition,Modi has imposed a tax on digital services affecting global platforms.This policy has been enthusiastically embraced by Mukesh Ambani,the chairman of Indian conglomerate Reliance Industries and a s

298、upporter of Modi.He is quoted as saying,“We have to collectively launch a new movement against data colonization.For India to succeed in this data-driven revolution,we will have to migrate the control and ownership of Indian data back to India in other words,Indian wealth back to every Indian.”Whils

299、t it is positive that India is fostering local talent and supporting the development of home grown industries,building barriers to foreign technology carries its own risk.The market will be denied efficiencies and capabilities which are available to companies in other parts of the world as India see

300、ks to build its own alternatives.Whilst justified on the basis of national sovereignty and protecting nascent Indian start ups,this policy is likely to be counterproductive.35ContentsAgilitys TakeThe Path to Recovery Runs through Small BusinessSmaller enterprises are critical to the worlds two most

301、pressing challenges.The first of those is how to spur broad-based,equitable and sustainable economic growth,especially in emerging markets.The second is how to decarbonize to meet net-zero climate goals.When the pandemic struck in 2020,small and medium-sized businesses were quickly targeted with dir

302、ect government assistance,public loan guarantees,tax relief and other aid intended to keep them afloat and provide them with incentives to avoid shedding workers.Despite the help,a look at SMEs in 32 countries found that most lost 30%to 50%of their revenue between February 2020 and April 2021.Small

303、businesses represent 90%of all companies and generate nearly 70%of jobs and GDP globally.They are the bedrock of developed and developing economies alike,and at the heart of economic growth strategies for most emerging markets looking to climb the development curve.The long-term viability of many mi

304、cro-enterprises,startups,entrepreneur-led organizations and other SMEs will be determined by their ability to 1.)go digital and 2.)plug into global value chains by selling to domestic market customers engaged in cross-border trade.Digital transformation remains underway in businesses of all sizes,an

305、d in all sectors and geographies.But small enterprises are generally less digitalized than medium-sized companies,which in turn are less digitalized than big corporations.One reason,of course,is that so many digital tools and solutions are priced and tailored to the needs of larger organizations.In

306、the case of small businesses,the challenge of going digital is especially difficult but the need to do so is increasingly apparent.Research shows that the largest 10%of companies in digital channels reap 60%to 95%of digital revenues.If we want a future with shared prosperity and sustainable growth,w

307、e must make sure small businesses are part of digital transformation.On the trade front,the deck is stacked against smaller enterprises.Half of all free trade agreements contain at least one provision explicitly mentioning small businesses,“but all of them will reflect the priorities of larger compa

308、nies who are often seen as national champions,”says the European Centre for International Political Economy.For smaller companies that cant easily absorb the costs and risks entailed in exporting,whats important is to look at their potential as“indirect”exporters producers whose goods reach internat

309、ional markets through sales in their home markets.Education and skills lay foundationsDigital readiness critical to social cohesionDigital skills in the work force will also be a major factor in the ability of emerging markets to leverage future opportunities.This is reflected in the sub-index by th

310、e high ranking of many of the richer Middle Eastern countries(e.g.UAE(2nd),Qatar(5th),Saudi Arabia(6th),Oman(10th)and Kuwait(11th)which have in the last two decades invested heavily in their human capital.This includes the establishment of universities;increasing years of schooling;a focus of maths

311、literacy and STEM subjects and staff training in the work place.A survey undertaken by publisher,Wiley,revealed that governments in the UAE,Qatar and Saudi Arabia had a particularly strong understanding of the digital skills landscape and the engagement which was required between government,industry

312、 and academia.Industry is evolving at a fast pace and it is clear that those countries which are not digitally ready to embrace the new market environment risk falling even further behind their competitors.This is a huge problem,not just for the digital have nots but for the international community

313、as a whole.At a time of global food shortages and increasing levels of poverty,the gap between those digitally connected and unconnected can create and amplify social and economic inequality leading to unrest and the risk of failed states.It will also delay adoption of green technologies,essential t

314、o the arrest of climate change which is of critical importance to many countries in the Emerging World.36ContentsThe Agility Emerging Markets Logistics Index 2023 Survey IntroductionRecoveryWhich of the following statements most closely matches your opinion on global economic prospects for 2023?2023

315、 will see moderate to strong growth in the global economyA global recession in 2023 is likelyA global recession in 2023 is unlikely to happenThere is little or no chance of global recession in 2023There will be a global recession in 20232022 was meant to be the year that global trade and supply chai

316、ns recover and return to normality,but instead the world has faced a series of black swan events,including:The war in Ukraine,which has impacted global trade flows and oil and energy prices A zero-Covid policy in China that has caused port congestion and delays More extreme climate eventsThese facto

317、rs have caused prolonged issues along global supply chains.Add to the pressure pot the urgent need to invest in decarbonisation,digitalisation and technology,as well as a looming global recession,the challenge for logistics supply chain executives will be to brace for more challenging times ahead.No

318、te:Transport Intelligence and Agility surveyed 750 logistics industry professionals between November and December 2022,with an additional 503 surveyed specifically on global economic prospects in October,November and December 2022.To measure logistics executives sentiment on the state of the global

319、economy,respondents were asked whether they anticipate a global recession in 2023.Combining all responses that predict a recession shows that two thirds of respondents expect a global recession in the year ahead.This highlights the intensity of the uncertainty gripping the global economy.13.9%42.7%1

320、2.1%7.6%23.7%37ContentsWorsening economic sentiment between October and December 2022Which of the following statements most closely matches your opinion on global economic prospects for 2023?The results also show that economic sentiment has worsened between October and December 2022,with the proport

321、ion of respondents that are certain a global recession in 2023 is inevitable increasing by 6 percentage points in December compared to October.The forecast of a recession from 66.4%of respondents comes amidst sharp growth slowdowns across the largest economies.The global economy has been characteriz

322、ed by strong demand at the start of 2022 with the re-opening effect resulting from the end of Covid-19 measures,and the stimulus packages working at full speed.Overall,a generally firm but incomplete recovery from Covid-19 was shaping the global economies before the war in Ukraine.However,demand sta

323、rted to soften as early as Q2 2022 and the global economy entered the slow lane.The war acted as a major setback to recovery,causing a global slowdown.In October 2022,the IMF marked GDP growth down for 2023 to 2.7%,the“weakest growth profile”since 2001,excluding the acute phase ofCovid-19pandemic an

324、d the global financial crisis.Downward forces will gain more of an upper hand across the world in 2023 and a confluence of headwinds will halt the recovery and growth momentum of global economies-the war in Ukraine,an energy crisis,high inflation,and the possibility of further pandemic-related suppl

325、y-side disruptions.A global recessionin 2023 is likelyThere will be aglobal recessionin 20232023 will see moderateto strong growth inthe global economyA global recessionin 2023 is unlikelyto happenThere is little orno chance of globalrecession in 202301020304050Oct 22Nov 22Dec 2238ContentsWhich of t

326、he following statements best describes each regions current stage of economic recovery from the Covid-19 pandemic?01020304050Asia PacificMiddle East&North AfricaRussia,Caucasus&Central AsiaSouth AmericaSub-SaharanAfrica18.4%33.1%40.3%8.2%15.4%34.9%39.5%10.3%12.6%39.9%36.0%11.5%13.4%41.4%30.9%14.2%9.

327、9%39.8%29.3%21.0%Fully recovered AND stronger than pre-pandemicEconomy is still hindered by the pandemicRecovered but not yet to pre-pandemic levelThe worst economic impacts of the pandemic are still to comeOf the five regions examined,Asia Pacifics regional economy exhibits the strongest economic r

328、ecovery from the Covid-19 pandemic,but is still below the pre-pandemic level,according to survey respondents.Growth in most countries in Asia Pacific rebounded in the first half of 2022,on the back of a revived domestic demand after the Covid-19 Delta wave.However,China lost momentum and the public

329、health measures to contain outbreaks of Covid reduced consumption.Most of the region was projected to grow faster and have lower inflation in 2022 than other regions according to the World Bank.This resilience of the region very much stems from its positioning along global value chains and in partic

330、ular its prominent role in high-value industries such as electronics,where the region has gradually upgraded its global value chain participation by doing the higher value-added stages like design and production.Recent increases in Chinas production costs have created opportunities for other countri

331、es in the region,including Malaysia,Singapore,Thailand,and Vietnam,to increase their participation in the electronics sector global value chain.A third of respondents believe that Asia Pacific economy is still hindered by the pandemic,highlighting the considerable heterogeneity across the region and

332、 the varying rates at which individual economies are recovering from the pandemic.Growth in the regions advanced economies remains above potential at 2.3%in 2022 and is expected to fall to 2.0%in 2023 and to 1.9%in 2024 according to the IMF.By contrast,Asia Pacifics developing economies will see a d

333、rop in growth to 4.4%in 2022 largely due to the slowdown in Chinaand will rise to 4.9%in 2023 and 5.2%in 2024,according to the IMF.Beyond 2022,global deceleration and the resulting slowdown of external demand,as well as rising debt could drag on growth in Asia Pacific.Measures aimed at containing inflation and debt could also inhibit growth.While Asia Pacific remains a relative bright spot in an i