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Logistics industry looks beyond BRICS, says Agility

January 20 - Mixed economic performances in BRICS countries has been offset by dynamic growth in a number of ASEAN and GGC countries, sub-Saharan Africa and large next-tier economies such as Indonesia, Nigeria, Mexico and Pakistan, said the latest Agility

The Index, now in its sixth year, ranks emerging markets based on their size, business conditions, infrastructure and other factors that make them attractive for investment by logistics companies, air cargo carriers, shipping lines, freight forwarders and distribution companies.

Since the Index's inception, large BRICS nations (Brazil, Russia, India, China and South Africa) have accounted for a significant proportion of growth and investment in emerging markets. But Saudi Arabia climbed to second position in the 2015 Index, ranking behind only China, which has 47 times the population and 12.5 times the economic output.

Next-tier economies Indonesia (4th), Nigeria (27th), Bangladesh (28th) and Pakistan (25th) - all with populations topping 100 million - climbed in the Index rankings. The other large non-BRICS market, Mexico, held steady in ninth place.

"A year ago, there was talk of an emerging markets meltdown and of a new 'fragile five' based on concerns about weakness in South Africa, Brazil, India, Turkey and Indonesia," said Essa Al-Saleh, president and ceo of Agility Global Integrated Logistics. "Emerging markets as a group turned out to be far more resilient - even vibrant - than expected despite continued sluggishness in the global economy."

Key findings of the report include:

1)   Gulf states UAE, Qatar and Oman, ranked as having the best "market compatibility" - the most ideal business conditions - among the 45 countries in the Index. They were followed by Uruguay, Saudi Arabia and Morocco.

2)   UAE, Malaysia, China, Oman, Saudi Arabia and Chile led in "connectivity," indicating they have the best infrastructure and transport links.

3)   Russia's growing economic isolation has damaged its appeal to logistics and supply chain professionals. More than 75 percent of survey respondents said they were pessimistic about Russia's prospects.

4)   The Philippines climbed three spots (16th) in the data portion of the Index - after jumping nine spots in 2014. Respondents pushed the Philippines up five spots (15th) among countries likely to emerge as a major logistics market.

Al-Saleh said a number of developing countries invested significantly in infrastructure and addressed long-standing problems such as labor and tax rules, investor protections, contract law, property rights, capital restrictions, trade and land-use regulations. He said risks to emerging markets growth in 2015 would come from falling commodity prices, the cooling Chinese economy, US monetary tightening and Russia's economic woes.

In 2015, the International Monetary Fund anticipates the average growth of the 45 countries featured in the Index to be 4.57 percent. "The factors driving growth are increases in population, size of the middle class, spending power and urbanisation rates, along with steady progress in health, education and poverty reduction," Al-Saleh observed. "That's why we remain optimistic about emerging markets and continue to see them on an upward trajectory."

Transport Intelligence compiled the index, surveying more than 1,000 global logistics and supply chain executives in the process.

The Agility Emerging Markets Logistics Index 2015 can be found in full on the Agility website: http://www.agility.com/EN/About-Us/Pages/Agility-Emerging-Markets-Logistics-Index-2015.aspx

www.agility.com

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