Developing the ideal trade and transport corridor: mission possible!

Transcription

1 Developing the ideal trade and transport corridor: mission possible! Virginia Tanase Sr. Transport Specialist Transport, Water and Information and Communication Technology Department Jean Francois Arvis Charles Kunaka Sr. Trade Specialist International Trade Department (PRMTR) The World Bank Brown Bag Lunch Series Washington D.C. 13 October 2011

2 Outline Introduction The lessons learned The Northern Corridor Harmonization based on internationally agreed standards Conclusions 2

3 Key words trade and transport facilitation, safety, security, mobility, connectivity, regional cohesion, reduction of disparities, savings, poverty reduction, governance, transparency, development 3

4 Mandates (1/3) Safe, Clean, and Affordable Transport for Development, The World Bank Group s Transport Business Strategy for As part of the transport-for-trade agenda the Bank Group will try in particular to identify opportunities to develop projects with cross-border trade impact that can promote regional economic integration. In both domestic and regional transport projects and programs it will encourage partner countries to adopt corridor approaches to infrastructure investment and transport service improvement (including multicountry regional corridors). This will lead both to more comprehensive solutions to overall logistics challenges and higher project impact. lowering transport costs along a modernized international corridor can unlock growth potential, create jobs, and bring wealth to local communities. 4

5 Mandates (2/3) The World Bank Group Trade Strategy, "Priorities are to enhance the performance of trade corridors used by land-linked developing countries, especially in Africa; regional trade facilitation frameworks; improve markets for logistics services; increase the efficiency of border management; facilitate the cross-border movement of service suppliers; and improve access to trade finance and related insurance and guarantee products for SMEs." 5

6 Mandates (3/3) The Charter of the United Nations (26 June 1945) WE THE PEOPLES OF THE UNITED NATIONS DETERMINED [ ] to promote social progress and better standards of life in larger freedom, AND FOR THESE ENDS [ ] to employ international machinery for the promotion of the economic and social advancement of all peoples, HAVE RESOLVED TO COMBINE OUR EFFORTS TO ACCOMPLISH THESE AIMS Article 1 The Purposes of the United Nations are: [ ] To achieve international co-operation in solving international problems of an economic, social, cultural, or humanitarian character, and [ ] To be a centre for harmonizing the actions of nations in the attainment of these common ends. 6

7 What is a corridor? Corridor = Hard+Soft components = Infrastructure+operation+transport services+ancillary services (notably IT&C, facilities etc) Players: public authorities/entities, private sector, NGOs, civil society. Partnerships are vital! The reason of being (geographical, demand-driven, political) is determinant in corridor s evolution (transport- trade- economic-development corridor) Safe, clean and affordable transport results in timely, reliable and cheaper trade 7

8 Already investment in knowledge Available comprehensive KP outputs on trade corridors (anchor, regions) Based on implementation experience so far Important to continue: Repackaging the knowledge in practical tools (e.g. TORs ) Addressing gaps in the toolbox (e.g. economic assessment, political economy of reforms) 8

9 Some recent knowledge contributions 9 9

10 =>Key findings for Almaty POA

11 Key active corridor projects CEMAC TTF (Douala Corridor) (L) West Africa (Tema-Ouagadougou) (L) West Africa (Abidjan-Lagos) (L) UEMOA (E) North-South Corridor (L) EAC facilitation (L) Congo-DRC corridors (E) Djibouti Ethiopia (E) 11

12 Key active corridor projects Mashreq (L) Maghreb (E) Balkans (L) Kazakhstan CAREC (Western corridor, customs support) (L) Others ECA (Caucasus) 12

13 Key active corridor projects GMS corridors (E) Central America SIECA (E) Hidrovia (E) Afghanistan (new tranche customs support), and Pakistan (national corridor) (L) Western Bengal corridors (E) 13

14 A sub-optimal equilibrium Extremely dysfunctional worldwide apart from Western Europe Logistics costs supported by traders comes from soft constraints that affects service delivery: Inadequate market for services (trucks) Unreliability of corridor supply chain increased by inadequate design of transit arrangements for goods and vehicles Rents Challenge from lack of incentives for change and political economy constraints. 14

15 Corridor development: a holistic approach CLIMATE CHANGE FACILITATION LIBERALIZATION Building blocks TRANSIT SYSTEM ROAD SAFETY Building blocks Building blocks Building blocks Building blocks INFRASTRUCTURE

16 The Pan-European Transport Corridors and Areas Pan-European Transport Conferences in 1991, 1994 and 1997: - ten corridors (I to X): all but Danube (VII) are road+rail - four areas around seas: Barents sea/euro-arctic area Black Sea basin Mediterranean area Adriatic/Ionian seas 16 VII geographical X demand driven IV - political

17 The Northern Corridor - Links DRC, Burundi, Rwanda, Uganda, Kenya, (and South Sudan) - It is one of the best known and probably most studied corridors in SSA

18 From International to Corridor Instruments Definition of the Corridor followed UNCTAD work in the 1970s and early 1980s in particular the United Nations Transport and Communications Decade ( ) Northern Corridor Transit Agreement (NCTA) signed in 1985 and became effective 1986: Kenya, Uganda, Rwanda and Burundi (1985) and DRC (1987) Northern Corridor Transit Transport Co-ordination Authority (NCTTCA) was created in accordance with the provisions of the NCTA NCTTCA has a permanent secretariat established to administer the treaty Was supposed to be for 10 years, extended in 1996 for another 10 years Objectives Member states agreed to grant each other the right of transit to facilitate the movement of goods through their respective territories and to provide the necessary facilities for traffic in transit to and from the sea. To do everything possible to eliminate any barriers to the free flow of traffic in transit through their respective territories in order to make the Northern Corridor a cost effective corridor. 18

19 Agreement revised 2007 Stated reasons for revision: New geo-political realities, technological advancement and globalization; Changes to development approaches; Strong participation of the private sector. New objectives To facilitate trade, the movement of persons, vehicles and goods in domestic, regional and international transport. To stimulate economic and social development in the territories of the contracting parties. To transform the Corridor into a Development Corridor which, in addition to offering safe, fast and competitive transport and transit services that secure regional trade, will stimulate investments, encourage sustainable development and poverty reduction. To implement strategies for accelerating economic and social growth along the corridor while ensuring environmental sustainability

20 Specific Protocols Protocol No. 1 Maritime Port Facilities Protocol No. 2 Routes and Facilities Protocol No. 3 Customs Controls Protocol No. 4 Documentation and Procedures Protocol No. 5 Transport of Goods by Rail Protocol No. 6 Transport of Goods by Road Protocol No. 7 Inland and Waterways Transport of Goods Protocol No. 8 Transport by Pipeline Protocol No. 9 Multimodal Transport of Goods Protocol No. 10 Handling of Dangerous Goods Protocol No. 11 Measures of Facilitation for Transit Agencies, Traders and Employees 20 20

21 Interventions have to register in impact on corridor performance Improving performance of the corridor is fundamental to any intervention How do we assess performance? Corridor performance indicators Cost Time Reliability 21

22 Cost trend, 1980 to 2010 $/tonne s, early 1990s reduction in paper requirements (single document extended to COMESA), improvement of border crossing Insurance (later extended at COMESA level), lobbying Kampala Kigali Bujumbura 22

23 23 Time

24 24 Port cargo dwell time

25 What is the role of competition between Corridors? 25

26 Definite distance penalty, but not the whole story US$ Transport Costs (US$) for a 40ft container 1150 km Road 1700 km NORTHERN CORRIDOR: MOM-KAM CENTRAL CORRIDOR: DSM-KAM 1300 km 1550 km Rail / Rail-Water 26

27 Uganda s Import Volumes: Mode and Corridor Share NORTHERN CORRIDOR MULTIMODAL 16.7% CENTRAL CORRIDOR MULTIMODAL 0.3% ROAD 81.7% 1.6% ROAD 1.3% Uganda s Export Volumes: Mode and Corridor Share NORTHERN CORRIDOR CENTRAL CORRIDOR MULTIMODAL 16.0% MULTIMODAL 3.0% ROAD 64.0% 20.0% ROAD 17.0% 27

28 Can we develop a generalized corridor choice model? Trade traffic is not always assigned to the corridor with the lowest cost, or time, or greatest reliability Paradoxes Zambia Walvis Bay is fastest for Zambia, but it is little used Durban is neither the shortest distance nor the cheapest, but is the most used trade corridor What are implications for trade facilitation initiatives? Corridor competitiveness is a function of several factors Shipper/agent preference Shipping line connectivity Availability of return loads Port performance Transit time Cost Reliability 28

29 Current interventions on the Northern Corridor WB - EATTFP TradeMark-EA USAID COMPETE JICA DfID WB/Total EU 29

30 Is the corridor performing as efficiently as possible? Is four to five days for 1200 km acceptable? police and customs escort, checkpoints, attractive but contribute little time costly and lengthy bond system safety and security Cargo dwell time in port Inconsistent performance Congestion in port city and large urban centers 30

31 YES, BUT UNDER CONDITIONS! the agreement itself: an almost perfect tool fine tuning needed and underway linkage to national regulations to ensure consistence with NCTA Authority to be reformed Assess real stakeholders strengthen private sector involvement Undertake problem solving on the ground and monitor performance Become a facilitation committee rather than a interstate body 31

32 Developing a Trade Corridor Management Toolkit Basis for a new Trade Corridor Management Toolkit 14 modules addressing how to assess, measure and design interventions for a corridor and for its sub-components Based on large body of existing knowledge from Bank operations, and from several other agencies and countries 32 Designed to support increasing volume of corridor-based operations. 32

33 The Trade Corridor Management Toolkit 33 33

34 Holistic approach? CLIMATE CHANGE FACILITATION LIBERALIZATION TRANSIT SYSTEM ROAD SAFETY INFRASTRUCTURE

35 Minimum level of harmonization (1/2) European Agreement on main int l traffic arteries (1975)- AGR-, Intergovernmental Agreement on the Asian Highway Network (2003)- AH- or similar at regional level Convention on Road Traffic (1949,1968)- CRT Convention on Road Signs and Signals (1949, 1968)- CRSS Convention on the Contract for the Int l Carriage of Goods by Road (1956)- CMR European Agreement concerning the Work of Crews of Vehicles Engaged in Int l Road Transport (1970)- AETR European Agreement concerning the Int l Carriage of Dangerous Goods by Road (1957)- ADR Agreement on the Int l Carriage of Perishable Foodstuffs and on the Special Equipment to be used for such Carriage (1970)- ATP 35

36 Minimum level of harmonization (2/2) Agreement concerning the Adoption of Uniform Conditions for Periodical Technical Inspections of Wheeled Vehicles and the Reciprocal Recognition of such Inspections (1997) ITP Int l Convention on the Harmonization of Frontier Controls of Goods (1982)- HARM Customs Convention on the Temporary Importation of Commercial Road Vehicles (1956)- TICOM Customs Convention on the Int l Transport of Goods under Cover of TIR Carnets (1975)- TIR Customs Convention on Containers (1972)- CCC Int l convention on the simplification and harmonization of customs procedures (as amended 1999) and annexes- KYOTO 36

37 Africa and the Conventions on Road Traffic (1/2) The CRT 1949 Harmonized traffic rules and specific facilitation measures (border controls etc) Driver s license based on competence test, vehicle s technical provisions, weights and dimensions The CRT 1968 Same but more comprehensive and adapted to technology (e.g. use of cell phone while driving should be prohibited) for international traffic (= along corridors) 37

38 Africa and the Conventions on Road Traffic (2/2) CRT 1949 CRT

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40 CAREC Trade and Transport Facilitation Strategy Key results of the Action Plan: 100% of corridors improved by 2017, compared with 64% in 2007 Increased transit trade volume via the CAREC corridors to 5% of trade between Europe and East Asia by 2017, from less than 1% (about 34 million tons) in 2005 Increased intraregional trade volume by 50% by 2017, from the 2005 level (about 32 million tons), and Reduced time for border crossing along the CAREC corridors by 50% by 2012, and a further 30% by 2017, as compared with

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43 CAREC harmonization AFG AZE CHN KAZ KGZ MON PAK TAJ TKM UZB AGR AH CRT CRSS CMR AETR ADR ATP ITP HARM TICOM TIR study study CCC KYOTO 43

44 The example of the TIR Convention in CAREC Number of TIR Carnets issued in the last five years ( ) AFG AZE CHN KAZ KGZ MON PAK TAJ TKM UZB X X

45 UN Resolutions as influence tools Political tools Co-sponsoring States in particular commit to implement the resolutions (some of them include specific actions) Example of co-sponsors for Resolution 64/255 Improving global road safety : AZE, KAZ, KGZ, MON, PAK, TAJ, TKM, UZB 45

46 Trade and Transport Corridors Confidence-building tools Development tools Ideal support for multi-tasking : IT, energy networks (transformational projects) Opportunities for multi-country investments Essential in the integration at (sub)regional level 46

47 Developing the ideal corridor: infrastructure Infrastructure is a major contributor to shaping the market along the corridor Connectivity Weights and dimensions Signs and signals, traffic management Roadside facilities for enforcement (secure parking spaces, vehicle technical inspections en route) Strategies to promote corridor s use Strategic view (e.g. dry-ports aside) but just one contributor! 47

48 Developing the ideal corridor: shaped market Vehicle Registration, insurance Mandatory technical inspections Fleet renewal schemes Driver Proper training Manager Proper training safety, environment, efficiency, revenue collection safety, environment, efficiency Certified professional competence 48

49 Developing the ideal corridor: shaped market Company/transport operator Authorized (access to profession) Licensed (access to market) Incentives Enforcement Institutions Formal market, revenue collection, fair competition, efficiency Professional associations, training institutes Authorities (regulatory, enforcing)- attributions clear, empowered, no overlapping 49

50 Shaped market : consequences on corridor development Traffic and transit rights (Gov t negotiates) Market access Efficiency (no empty backhauls) Seamless movement of goods (border crossings!!!) Optimal use of infrastructure Secondary effects (cultural, tourism) Transit system- only worth it in a shaped market Trade facilitation 50

51 Corridor management Wide range of possibilities: Steering Committees, commercial entities, formal (intergovernmental) structures BUT None of them can be successful without partnerships: between Governments, between businesses, PPP at national level and along the corridor 51

52 The importance of indicators A tool in all the stages of a corridor development Awareness raising and constituencies Identification of bottlenecks Implementation and monitoring To be useful the indicators must cover all the aspects of the corridor-comprehensive assessment of logistics costs 52

53 No shortcut: a challenging implementation agenda Not just infrastructure or international law Some degree of universality little potential for regional paradigms: e.g TIR lite Cannot skip the core soft issues dealing with service provision and transit regime Need to bring Private Sector capacities up to functional requirements not the reverse Change incentives to address the political economy constraints no technological shortcuts or else design of exit strategies? 53

54 Move to implementation A new generation of WB projects should mutually leverage the hard (infrastructure) and the Soft (policy, regulatory or institutional/procedural reforms) Role of ESW/TA to create awareness and a consensus among policy makers and stakeholders Risks: Competition vs. cooperation with other institutions Perturbation from false solutions Limited ability to elevate the debate = provide high level policy makers with a clear picture of costs-benefits 54

55 55 Web-based toolkit

56 Questions / Thank you Virginia Tanase, Jean Francois Arvis, Charles Kunaka vtanase@worldbank.org, jarvis1@worldbank.org, ckunaka@worldbank.org,