How consumer logistics can stimulate the Arab Spring

Mohammed Mohebi, CEO of Mohebi Logistics, sees many opportunities in greater openness.

The Arab world is experiencing a fundamental shift that is likely to bring with it many new economic opportunities. The logistics industry in those countries has an important role to play in stimulating prosperity.

Across the Arab world, the current developments known as the Arab Spring, or Arab Awakening, are indicating that conditions may permit a surge in economic growth. The advent of greater openness will bring greater employment, more private business and greater consumer demand. This goes hand-in hand with the need to significantly upgrade the logistics services that support the supply of consumer products.

A key factor in achieving this goal will be the ability to provide more employment, especially for young adults. In numerous countries in the MENA region currently undergoing social change, plans are under way to expand the industrial base, enlarge opportunities for higher education and achieve a better match between skills and job supply.

Increased employment stimulates consumer demand and feeds the cycle of further growth. To meet that demand, dependable logistics services need to be in place to supply goods on time and in the quantities expected. With the Arab Spring renaissance, no doubt many enterprises will arise that seek to enhance the storage, distribution and other logistics services available in each country.

Expectations are optimistic. In its Regional Economic Outlook in May 2011 entitled ‘MENA Facing Challenges and Opportunities’, the World Bank anticipates ‘historic opportunities’ for greater openness and citizen participation, if socio-economic changes can be wisely managed over the medium term (of 3-5 years). The World Bank also notes that such growth will be reliant on the Arab region increasing its spending on basic infrastructure from 5% today to 10% or more of 10% of GDP per annum. China is currently spending 15% of its annual GDP in infrastructure.

Within the international banking community, numerous initiatives are under way to organize the finance for such infrastructure projects. It is clear that such stimulus will lead to the creation of new jobs, increased GDP and greater consumer activity.

In such a scenario, the sophisticated logistics infrastructure that already serves Dubai can be installed in these emerging economies, leading to a higher quality of life. Logistics experts in Dubai can be very influential in introducing new infrastructure and methodology into other MENA countries, greatly reducing the time lag towards achieving an efficient and productive supply chain.

As populations in the Arab Spring countries begin to enjoy the advantages of a more open market, demand for all kinds of FMCG products will rise dramatically. An efficient logistics infrastructure will be highly instrumental in speeding up this cycle and bringing new hope to everyone.