Anticipation of a global recession in 2020 amid concern over downward pressure on global trade volumes, uncertain growth prospects and the US-China trade war
Bangladesh has emerged as the worst performer in providing logistics support among four South Asian nations, according to the Agility Emerging Markets Logistics Index 2020.
The country, ranking 38th, is way behind neighbouring India (2nd) while Pakistan (28) and Sri Lanka (34) also performed better in the index.
In the World Bank's 2018 Logistics Performance Index, Bangladesh (100th among 160 countries) was also significantly behind neighbouring India (44th) and Sri Lanka (94th).
However, Bangladesh's logistics performance in the Agility Emerging Markets Logistics Index 2020 improved slightly in the last one year as it went up one-notch from the previous year's position (39th).
The index was published on Monday by Agility – a Kuwait-based global logistics company.
Agility has been publishing annual rankings of the top 50 global emerging markets since 2009 to demonstrate their business friendliness.
The ranking is based on three broad categories: Domestic Opportunities, International Opportunities and Business Fundamentals.
This year, Agility surveyed the opinions of 780 global supply chain professionals about the prospects and challenges of the world economy in 2020.
However, Bangladesh's overall score in the three indices is 4.45, only 0.02 more than its score last year. The higher a country scores the better its ranking.
The country's overall performance is undermined by its weak performance in the Business Fundamentals sub-index with a score of 3.54 out of 10.
It ranked 43rd in the scenario of regulatory environment, contract enforcement and anti-corruption frameworks, cost of crime and violence, market accessibility and domestic stability.
In the other two indices, Bangladesh performed better in Domestic Opportunities, ranking 20th with a score of 4.95. It ranked 18th in this index last year.
The Domestic Opportunities index measures the growth and size of the domestic logistics markets, economy and population. It also examines the countries' income equality, urbanisation and development of business clusters.
In the International Opportunities sub-index, Bangladesh scored 4.38 and ranked 39th.
Experts said Bangladesh's underperformance in the logistics index denotes that the country needs major improvement in this sector.
"Although the overall logistics service has improved in the county, there are many areas that need huge improvement. For instance, road infrastructure is still a problem which makes it difficult for us to transport goods from factories and ports to other parts of the country," said Rupali Haque Chowdhury, the president of the Foreign Investors' Chamber of Commerce and Industry Bangladesh.
"In many areas, we undergo huge traffic congestion, causing a loss of time in goods transportation. It is a big challenge for us," she further said.
Bangladesh needs a lot of work to address these grey areas to improve it ranking in the index, she added.
Logistics industry fears global recession in 2020
Supply chain industry professionals anticipate a recession in 2020 amid concerns about downward pressure on global trade volumes, uncertain growth prospects and the ongoing trade war between the United States and China.
Sixty-four percent of industry professionals surveyed in the Agility's index say a global recession is likely in the next 12 months, while this view is opposed by 12 percent of the executives surveyed.
At the same time, most logistics professional say their companies will ride out any turbulence in trade relations between the world's two largest economies.
Seventy percent of those with operations and investments in China say they will stay put and that their plans are unchanged despite the US-China trade war.
If they were to move production or sourcing from China, then Vietnam and India are the top choices of places to relocate to. They identified rising trade barriers as the factor most likely to hurt emerging markets growth.
"The fears of a recession are not to be taken lightly, especially because of uncertainty about the impact of the coronavirus outbreak," says Essa Al-Saleh, CEO of Agility Global Logistics.
"A positive sign, however, is that a large number of emerging markets economies were able to weather an array of issues — political and social unrest, structural problems, even international sanctions for some — without losing much ground in the past year."