India’s logistics performance index plummets to 47

The capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more is needed to spur faster economic growth and help firms benefit from trade recovery, says the World Bank

The government has come out with an ambitious plan of adding 20 km of roads/day to improve the abysmal state of road infrastructure in the country. Various port authorities are planning to add a capacity of 1 billion tonnes per annum by 2012. Metros are laying out their mass rapid transit schemes. However, India continues to drop down the scale of logistics performance in a seemingly free fall. Even war-ravaged Lebanon has managed to sport a better logistics performance index (LPI) of 33 compared to this nation’s tired 47th rank.

India has scaled down on the World Bank LPI survey ranking to 47 in 2010 from 39 in 2007. Not only India, a majority of South Asian countries’ LPI ranking amongst 155 countries has been depressing. However, India continues to be the top performer in South Asia.

Germany, Singapore, Sweden, the Netherlands and Luxembourg have emerged as the top five rankers in the LPI survey. In 2007, India ranked 39th on the LPI.

The capacity of countries to efficiently move goods and connect manufacturers and consumers with international markets is improving around the world, but much more is needed to spur faster economic growth and help firms benefit from trade recovery, according to a new World Bank Group survey on trade logistics.

Germany is the top performer among the 155 economies ranked in the Logistics Performance Index (LPI), in the report ‘Connecting to Compete 2010: Trade Logistics in the Global Economy’.

“Economic competitiveness is relentlessly driving countries to strengthen performance, and improving trade logistics is a smart way to deliver more efficiencies, lower costs and spur economic growth,” said World Bank group president Robert B Zoellick.

The report, headed by World Bank economists Jean Francois Arvis and Monica Alina Mustra, notes that among developing economies, logistics performance transcends the level of per capita income. Many countries perform better than what their income levels would suggest. The ten most significant over-performers include China (27), India (47), Uganda (66), Vietnam (53), Thailand (35), the Philippines (44), and South Africa (28).

In terms of how developing countries are doing per region, South Africa (28) is the top performer from Africa; China (27) from East Asia; Poland (30) from Central and Eastern Europe; Brazil (41) from Latin America; Lebanon (33) from the Middle East; and India (47) from South Asia, the survey report said.

Amongst the other South Asian countries, Afghanistan has improved from its 150th ranking in 2007 to the 143rd ranking in 2010. Bhutan continues at rank 128. Nepal’s ranking has dropped from 130 in 2007 to 147 in 2010. Pakistan’s ranking has fallen to 110 in 2010 from 68 in 2007. Sri Lanka’s rankings have also scaled down to 137 in 2010 from 92 in 2007. However, Bangladesh has surprised with an improvement to the 79th position in the LPI rankings in 2010 from the 87th position in 2007.

According to the report, South Asia’s port services are very inefficient, and thus a serious constraint upon unlocking the region’s full potential. Unfortunately, trade facilitation in South Asia has not received the attention it deserves, but it is gaining prominence in policy circles as well as in the popular media.

The World Bank conducts the LPI survey every two years. The report presents the findings of the second edition of ‘Connecting to Compete’, a report on the new dataset for the 2010 Logistics Performance Index (LPI) and its component indicators.
 

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