Wednesday, August 24, 2016

World Bank report: India "improves" in providing services to world market, but "fails" to integrate South Asia

LPI among top lower middle income group countries
By Our Representative
A new World Bank report, which rates the logistics performance of 160 countries for on the basis availability of infrastructure to international traders, has found that India considerably improved its performance from the 54th position to 35th between 2014 and 2016.
Rating India as No 1 country in the lower middle income group, the report, titled “Connecting to Compete 2016 : Trade Logistics in the Global Economy”, seeks to analyze six major parameters while arriving at what it calls logistics performance index (LPI).
These are efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, and frequency with which shipments reach consignees within scheduled or expected delivery times.
Even as suggesting the India and China are among the list of countries that over-perform their income group peers, the report, however, regrets, “In South Asia, lack of integration means that the good logistics performance of India does not improve that of its neighbours.”
Among the five BRICS countries, the report finds Brazil ranking 55th,Russia 99th, India 35th, China 27th and South Africa. It finds Germany as the best performing country, with an LPI score of 4.23, and Syria as the lowest, with a score of 1.60 (equivalent to 19 percent of Germany’s score on a scale from 1 to 5).
Seeking to influence policy makers of multinational corporations and governments on where to invest and where not to on the basis of type of logistics available in each country, the report states, “Efficient logistics connects firms to domestic and international markets through reliable supply chain networks.”
The report says, the LPI seeks to “understand key logistics impediments worldwide and to enable well-informed policy making and business decisions”, adding, “Logistics refers to a series of services and activities, such as transportation, warehousing, and brokerage, that help to move goods and establish supply chains across and within borders.”
The 2016 LPI data are based on a survey conducted between October and December 2015 and between March and April 2016 among 1,051 respondents at international logistics companies in 132 countries. Among the main groups interviewed are senior executives (53 percent), area or country managers (15 percent), and department managers (16 percent).
“These groups of professionals have oversight responsibilities or are directly involved in day-to-day operations not only from company headquarters but also from country offices”, the report states, adding, “Logistics performance both in international trade and domestically is central to the economic growth and competitiveness of countries.”
It appears, the report does not seek to address existing data of internal connectivity, particularly in large countries. It says, “The LPI measures performance at key international gateways in countries such as India and China, but does not address how easy or difficult it is to move goods to the hinterland.”
However, it admits, “Such movements are important from developmental and equity standpoints. Internal trade costs likely remain high in many countries, and reducing them could make a significant difference to the lives of producers and consumers outside main cities.”

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