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The Emirates maintained its position as the third most-attractive emerging market globally in Kuwaiti logistics giant Agility’s annual Emerging Markets Logistics Index (pdf). The UAE is also the highest-ranked country in the Middle East and North Africa region. China and India occupy the top two spots in the ranking, while Venezuela, Myanmar, and Libya are the lowest-ranked countries.
How it’s measured: 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.
Solid business fundamentals: 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 developing its digital infrastructure on the back of a regional “surge in digital infrastructure investment, including in the laying of undersea cables and development of data centers,” according to Agility. Most recently, e& said it is planning to anchor the world’s longest undersea telecoms cable, the 2Africa subsea internet cable, in Kaliba, which will be connected to Fujairah’s cable landing station.
We’re also doing well with economic diversification: The non-oil economy and economic diversification are underpinned by SMEs and SME growth, as UAE-based SMEs currently account for over 63.5% of the country’s non-oil GDP, the report said. The government aims to grow SMEs’ contribution to the economy by increasing their number to 1 mn by 2030.
REGIONAL + GLOBAL ANGLES-
GCC countries stood out: Along with the UAE, Saudi Arabia came in the top 10 emerging markets on all the indices. Apart from the international potential index, Qatar also ranked among the top 10 in all categories. Bahrain secured eighth place in the business fundamentals category. The GCC countries’ top 10 positions helped the MENA region outperform Southeast Asia as 2024’s projected “region with the third strongest economic growth.”
Optimism is high for MENA, as it stands at a “junction of development in many areas. It has a rapidly growing population of young consumers, increased digital adoption, rising disposable income, giga investment projects and significant public expenditure,” according to the survey’s respondents. The report also projects that the fallout of Israel’s war on Gaza will not extend beyond the borders of the Strip, confining its impact on instabilities in the price of oil due to tensions around the Red Sea and Suez Canal.
Global recession to come? Of the survey’s respondents, almost 50% believe that a global recession is looming in the wake of an expected worldwide economic slowdown, driven by global headwinds such as “monetary policy tightening, high inflation, and extreme weather events.” However, in the case of a US recession, emerging markets might have a chance at growing on the back of investors looking to diversify their portfolios and “ramp up their investments in emerging markets.” On the flip side, due to being export-oriented, weak global demand will put emerging markets’ growth at risk.
