In the third brief from our Emerging Markets series, we take a look at the UAE, the country ranked number three in the Agility Emerging Markets Logistics Index.
Whilst the investments made by the UAE over the last few decades in its transport and logistics infrastructure have 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 deglobalisation.
Digitalisation, the foundation of progress
Whilst the development of ports, airports, road and rail networks are on-going, the 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.
Digitalisation is regarded as being key to address many of the inefficiencies which exist in the UAE’s 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 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 technologies 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 liberalisation
Whilst many countries have taken the political decision to turn their 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 government’s decision to develop the country as a major international hub serving Europe, the Middle East, India and 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 widereaching deal with India, the UAE-India Comprehensive Economic Partnership Agreement (CEPA), which is hoped will increase trade from $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 shared with the goal of adopting Authorised Economic Operator (AEO) mutual recognition; there will be greater access to each other’s pharmaceutical markets; enhanced transparency on government procurement and a shared commitment to digital trade. The agreement will also allow the UAE’s partners in the Gulf 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 UAE’s position in world trade.
To find out more about the UAE and our Index top ten (China, India, Malaysia, Vietnam and more):
Download our free report: Agility Emerging Markets Logistics Index
The Agility Emerging Markets Logistics Index from Agility & Ti Insights, ranks countries for overall competitiveness based on their logistics strengths, business climates and digital readiness – factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.
Source: Agility & Ti Insights