Economic divide damaged by poor logistics

14 August 2008
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15 August 2008 | Paul Snell

The gap between rich and poor countries will increase if developing nations do not improve their logistics capabilities.

According to research by business membership group The Conference Board, poorer countries will be unable to improve their economic performance if the problem of weak infrastructure and governance are not tackled.

"Exponential growth in countries such as India and China has tipped the scale, making the poor even poorer. Without improvement in the system and infrastructure that support business growth, these least developed countries will continue to decline," said Ronald Berenbeim, principal researcher.

The problems that can affect logistics in developing countries include landlocked geography, poor governance, a dependence on neighbouring countries for access and, in some cases, war.

According to the World Bank's Logistics Performance Index, which ranks countries in areas such as customs, infrastructure and costs, Afghanistan, East Timor and Rwanda came bottom.

But supply chain managers could be the key to making improvements. According to Berenbeim, countries should make use of buyers' expertise. Purchasers are often experienced at developing innovative partnerships and strategies, which could help developing nations to overcome trade obstacles and develop global supply chains.



SMaug2008

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