Guyana ranks 141 in shipping and logistics out of 150 countries surveyed in a World Bank study which shows that being competitive means having the capabilities to connect to international markets to ship goods.
With a score of 2.06, Guyana comes in better than Chad, Niger, Sierra Leone, Djibouti, Tajikistan, Myanmar, Rwanda, Timor-Leste and Afghanistan. Singapore, a major global transport and logistics hub, ranks first with a score of 4.19. It is followed by the Netherlands (4.18), Germany (4.10), Sweden (4.08), Austria (4.06) and Japan (4.02).
The study, released last Saturday, is titled “Connecting to Compete: Trade Logistics in the Global Economy,” and is based on a world survey of international freight forwarders and express carriers.
Headed by the Banks economists Jean Francois Arvis and Monica Alina Mustra, said trade logistics is critical to developing countries that want to improve competitiveness, reap the benefits of globalisation, and fight poverty more effectively in an increasingly integrated world. Also, facilitating the capacity to connect firms, suppliers and consumers, is crucial in a world where predictability and reliability are becoming even more important than costs.”Being able to connect to global markets is fast becoming a key aspect of a country’s capacity to compete, grow, attract investment, create jobs and reduce poverty,” the World Bank quoted Danny Leipziger, World Bank Vice-President for Poverty Reduction and Economic Management, as saying. “But for those unable to connect, the costs of exclusion are large and growing.”
All developed countries were found to be top performers and, among the seven most industrialized nations, Germany ranks 3rd, Japan 6th, the UK 9th, Canada 10th, the US 14th, France 18th, and Italy 22nd out of 150 countries covered.
The report also found that there are significant differences among developing countries with similar incomes. China and Chile, for instance, rank 30th and 32nd respectively, while countries in higher income groups, such as oil producers, tend to perform below their potential.
It also found that beyond cost and time taken to deliver goods, the predictability and reliability of supply chains is increasingly important in a world of just-in-time production sharing. “Costs related to hedging against uncertainty are significant,” it said. Also, equally, cost and quality of logistics are determined not just by infrastructure and the performance of public agencies, but also by the availability of quality and competitive private services.
“Moreover, in many developing countries, problems of adverse geography are compounded by a weak modern services sector due to poor institutions or over-regulation,” the study said. It also quoted Uri Dadush, World Bank Trade Director, as saying “As a main driver of competitiveness, logistics can make you or break you as a country in today’s globalised world.”
He added, “You can have very good customs, but poor performance in only one or two areas of the supply chain has serious repercussions in the country’s economic performance creating a perception of unreliability.”
Examples
The report said a distant country like Chile can sell fresh fish and perishable fruits to consumers in Asia, Europe, and North America thanks to well functioning supply chains. “On the other extreme, importing a 20-foot container from Shanghai to N’djamena, the capital city of the landlocked country of Chad, takes about ten weeks at a cost of US$6,500, as compared to the four weeks and less than US$3,000 that it takes a landlocked country in Western or Central Europe to make the same shipment,” it said.
The survey also found that developing countries where trade has been central to their economy perform better than others with similar incomes. The study gave examples such as South Africa (24), Africa’s top performer, Malaysia (27), Chile (32), and Turkey (34) among upper middle income countries; China (30) and Thailand (31) among the lower middle income, and India (39) and Vietnam (53) among the lower income.
In terms of how developing countries are doing per region, Korea (25) is the top performer from East Asia; Chile (32) from Latin America, followed by Argentina (45), and Mexico (56); India (39) from South Asia; Oman (48) from the Middle East; and Turkey (34) from Eastern Europe.
Additionally, the study found that individual reforms, such as customs modernization, need to be combined with improvements in all aspects of the supply chain. “Countries need to better coordinate border procedures with other agencies, improve telecommunications, information technology, physical infrastructure, and facilitate the functioning of competitive private services, such as trucking, customs brokering, and warehousing,” Arvis said.
The report said that what is needed is a comprehensive reform of logistics and trade facilitation to close the logistic gap. It also called for improvements in the markets for logistic services in order to reduce coordination failures, especially those attributed to public agencies active at the borders, and to build strong support for future change and economic development.
