We have touched on the MDGs and asked the question whether enough is done to integrate Logistics into the effort. The World Bank’s Logistics Performance Index has many of the answers and the LPI framework is a clear indication that improving logistics performance has become an important development policy objective and, the LPI is providing a valuable benchmark from which priorities can be agreed and delivered upon. See: Connecting to Compete: Trade Logistics in the Global Economy (2007).
The Report has many practical examples of performance improvement initiatives on Logistics as a whole (transportation; consolidation of cargo; warehousing and border clearance through to in country distribution and payment systems) and is well worth a read.
Many Reports on Logistics in different countries focus on costs. For example, India runs at 13% versus 8% in the developed world. There is little point in ranking countries on their GDP per capita alone and, in the same way that Amartya Sen blew this simplistic notion away with other indicators such as literacy and health; any assessment of Logistics efficacy must use a wider lense. Connecting to Compete does just this with a clear emphasis not on cost but, on the need for predictability and reliability in Logistics services within a given country. After all, the cost associated with hedging against uncertainty and corruption is so high in some cases that a drive to improve transparency and reliability is increasingly crucial.
As Danny Leipziger, World Bank Vice President for Poverty Reduction and Economic Management has said, “Being able to connect to global markets is fast becoming a key aspect of a country’s capacity to compete, grow, attract investment, create jobs and reduce poverty”. For those unable to connect, the costs of exclusion are large and growing and this fact makes it vital to integrate learnings to date with the informal agenda where possible.
As we build momentum on Transformational Logistics, we turn to the impact that the links between the informal economy and the wider global markeplace are having. There are many instances where large Corporates are outsourcing may processes and their partners in turn are turning to a network of smaller companies to reduce costs. This needs to be looked at more closely.