The UAE and KSA ranked among the top 10 most competitive emerging markets in terms of logistics,according to Kuwaiti logistics giant Agility’s annual Emerging Markets Logistics Index (pdf). The index surveys 830 executives from the logistics industry to assess the performance of 50 emerging markets based on four criteria: Domestic logistics potential, international logistics potential, business fundamentals, and digital readiness.

First up, the UAE’s solid business fundamentals: The UAE ranked third overall, and first regionally, making it to the top 10 in all of the index’ subcategories. The UAE ranks first globally for best business fundamentals, while coming in second place (behind China) in the digital readiness category. The country stayed put in fifth place on the domestic potential category and seventh place on the international opportunities subindex.

The UAE is doubling down on digital infrastructure, with investments in undersea cables and data centers, the reportsays. The country also saw progress diversifying its economy, with special emphasis on SMEs that currently account for 63% of its non-oil GDP, and plans to ramp up the number of SMEs in the country to 1 mn by 2030.

KSA ranked sixth overall, and second regionally, with the country also making it in the top 10 of all of the index’ subcategories. The kingdom came in third in the best business fundamentals and sixth in the digital readiness categories. It also nabbed the seventh spot in the domestic potential category and sixth place in the international opportunities subindex, up from third last year.

Driving KSA’s logistics performance: The report cites KSA’s campaign to diversify and develop its non-oil economy over the past decade as a driving force for its performance on the index. The kingdom has several projects in development by 2030 that include logistics upgrades in a bid to position itself as a global logistics hub, the report said.

Big ambitions: KSA is pouring investments into warehousing, fulfillment, and trucking and simplifying licensing procedures in an effort to improve its ranking in the World Bank’s Logistics Performance Index. The kingdom’s e-commerce sector raked in over USD 10 bn in 2023, putting it on a par with regional e-commerce giant UAE, with forecasts predicting a 13.5% growth in the sector annually, the report said.

How are other countries faring? Oman (15), Bahrain (16), and Kuwait (21) all performed worse in this year’s overall rankings, dropping three, two, and six spots. Jordan (17) inched down one spot and Morocco (22) fell two places from last year. Tunisia (37) and Lebanon (38) both fell five spots, while Algeria (42) and Iran (40) both fell four places. Libya (50) came at the bottom of the ranking, its position unchanged from last year. Egypt came in at number 20, inching up one spot from last year despite falling nine places on the digital readiness category, the report showed.

Respondents still have high hopes for the region: The region overtook Southeast Asia in a poll on which emerging region is expected to see the fastest growth this year, surpassed only by China and India. The report cited rapid growth in the population of young consumers, digitization, better incomes, and massive investment projects as driving optimism in the region’s growth outlook.

Tags: