Alamy/Gavin Hellier via Reuters Connect
Despite the uncertainty that characterised geopolitics last year, the GCC has emerged as a “beacon of resilience”, according to the 2025 Agility Emerging Markets Logistics Index.
The Ti Insight report found that the core pillars of GCC members’ economic plans have remained intact through the disruption in the Red Sea, the conflict in Gaza, tensions with Iran, a change of regime in Syria and the war in Ukraine.
In fact, Gulf states have increased their global influence, cementing ties with regional and international partners such as India and China.
The index, which has mapped the performance of 50 emerging markets for over 15 years, provides a benchmark for international investors. Its categories include domestic and international logistics opportunities, business fundamentals and digital readiness.
The GCC economies held their own against much larger markets in this year’s ranking.
The UAE topped the sub-index for business fundamentals, reflecting its business-friendly environment, regulatory, security and financial stability, and strong infrastructure.
Among the GCC countries, Saudi Arabia performed best for domestic and international opportunities, supported by initiatives in its national transport and logistics plan, such as warehouse park development around the ports and airports of Jeddah and Dammam.
Urbanisation, better living standards, more demand for perishable foods and the emerging healthcare sector have fuelled demand for higher-value logistics services. Government and private sector investment in Saudi auto manufacturing (including electric vehicles) will consolidate this trend.
Across the Gulf, roads, railways, ports and airports are being built alongside housing, hotels, resorts, schools, sewers, water treatment and desalination plants.
The green transition is leading to massive investment in renewable energy projects, which all require significant transport and logistics resources.
At the same time, economic, regulatory and social reform is under way, leading to a new generation of entrepreneurs and a bigger role for women in business and society.
Economic diversification is critical to the GCC’s prospects. A survey of executives included in the research identified infrastructure development as the most important driver of this trend, followed by a skilled and “future-proof” labour force.
Creating a favourable business environment and strengthening regional integration were also high on executives’ wish lists.
The region is undergoing structural reform, with a gradual liberalisation of rules on foreign ownership, adoption of joint standards, development of legal frameworks and a crackdown on corruption.
The report highlighted the success that the Omani government is having in adopting the public-private partnership model to kick-start infrastructure investment.
From transport to healthcare, foreign investment projects are being helped by reforming state-owned enterprises and an increasingly business-friendly regulatory environment.
Although the GCC’s energy, tourism, transport, finance and construction sectors are thriving, there are tricky times ahead as governments attempt to balance geopolitical tensions – not least between the US and China. President Donald Trump’s hostility to Iran may result in more disruption, significantly if tensions affect the strategically critical Straits of Hormuz.
On top of this, it will be essential for the GCC governments to invest in infrastructure. This includes not only transport and warehousing – a significant number of facilities are still of low quality and ageing – but also information and communications technology.
Data networks must be used to reduce trade friction, facilitating the movement of goods to and from the region while protecting business and consumer data.
Digital inclusion and data networks will also be essential to connect small and medium-sized businesses to ecommerce platforms, creating wealth in parts of the population and region where it is needed most.
John Manners-Bell is CEO of Transport Intelligence Insight and founder of Foundation for Future Supply Chain
