The World Economic Forum (WEF)’s Enabling Trade Index, released last month, represents an attempt to benchmark the extent to which a selection of 118 countries around the world have in place the factors and policies for enabling trade.
Developed in conjunction with input from major logistics operators such as Agility, DPWN and DP World, plus IATA, the index uses four overall ‘issue areas’ – market access, border administration, transport and communications infrastructure and the business environment – to allow policymakers to discover the priorities for reform in each chosen country.
Coming out top in the inaugural version of the index were Asian high-flyers Hong Kong and Singapore, with a number of Scandinavian countries also making the top 10. Of the GCC economies, the UAE came an impressive 23rd, with Bahrain (37th), Qatar (41st), Oman (50th), Saudi Arabia (53rd) and Kuwait (58th) all slotting into the top half of the table.
First - the positives. The UAE in particular scored highly and is sandwiched between Spain and South Korea in the index, also easily outscoring G8 economy Italy. Its business environment rated exceptionally well with a ranking of 15th, which meant that the country was rated as having a better overarching regulatory and security environment for the transport sector than countries like the US, the UK and Canada. With regard to physical security specifically, the UAE ranked ninth out of the 118 countries surveyed.
The bad news is that despite Dubai being lauded as the region’s foremost transport and logistics hub, the restrictive access to the country’s goods markets through a uniform 5% tariff rate has pulled the country’s rating downwards, with the very small number of imports entering the UAE duty-free being a particular limiting factor. Broadly speaking, the same concerns were levelled not only at all the GCC countries, but the rest of the Arab nations covered by the survey as well.
Of course, the airfreight market is directly affected by the differing levels of market access, although tariff concerns for operators can often be alleviated by the presence of economic free zones.
Given the many other problems affecting air cargo players currently, some of which are covered in this edition of the magazine, providing operators with a faster and less cumbersome route to market can only help raise revenues in what is increasingly becoming an embattled global sector.
High levels of trade are generally regarded as a useful marker of a country’s economic growth rate and ability to reduce poverty. And it is certainly true to say that many of the GCC economies have for some time now been bending over backwards to ensure the easy movement of goods through their borders – as is evidenced by their more-than-healthy ratings.
But there is always room for improvement and assessments such as that produced by the WEF should definitely be construed as an effort to help national policymakers rather than criticise them.
Edward Attwood is deputy editor of Air Cargo Middle East & India.