Regional Conference. On Strengthening Transport Connectivity and Trade Facilitation in South and South-West Asia

Transcription

1 MINISTRY OF COMMERCE GOVERNMENT OF PAKISTAN Regional Conference On Strengthening Transport Connectivity and Trade Facilitation in South and South-West Asia Pearl Continental Hotel, Lahore, Pakistan, 9-10 December 2013 Organized jointly by United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and Ministry of Commerce, Government of Pakistan, Report The Conference was organized by Trade & Transport Facilitation Project of Ministry of Commerce in collaboration with UNESCAP, also supported by UNCTAD and World Bank. The programme extending over 2 days comprised 6 technical sessions besides the inaugural and concluding sessions. It was attended by 80 national and 19 international participants, and 7 representatives of UNESCAP and UNCTAD. Inaugural Session Chief Guest: Honourable Engr. Khurram Dastgir Khan, Minister of State for Commerce, Government of Pakistan 2. Conference commenced with recitation of Holy Quran. Mr. Qasim M. Niaz, Secretary, Ministry of Commerce welcomed the participants and said that the focus of this Conference is to bring together international experts, trade practitioners from countries in the regions, logistic service providers and other domestic and regional stakeholders and representatives of regional organizations to share knowledge and experiences that will help progress the regional connectivity and trade facilitation agenda. In addition to providing participants with valuable insights and information from subject experts, the conference would also provide the opportunity to share national experiences from public and private sector practitioners. He emphasized the requirements of development of hard and soft aspects of better quality regional infrastructure, linking countries through better connectivity and improving trade facilitation, cutting red tape Page 1

2 and boosting access to critical information to reduce the costs of trade between countries. He acknowledged that integrated and efficient transport network is essential for South and South- West Asia to realize its intra-regional trade potential. He informed that Pakistan has benefitted from automating the customs procedures. 3. Dr. Nagesh Kumar, Director of UNESCAP South and South-West Asia office referred to the post-crisis change in the global context when advanced economies of the world could no longer serve as the growth poles for the world economy and the need for rebalancing in favour of local and regional demand makes regional integration critical. He referred to the ESCAP s South and South-West Asia Development Report, which had shown that the South and South-West Asia was among the least integrated regions of the world with bulk of its trade potential remaining unexploited or underexploited due to a lack of fully developed transport links in the region leading to high trade costs. The benefits of geographical proximity and contiguity have been lost in the process. Poor transport connectivity has not allowed to develop region s production network and value chains. South Asia has also not been able to exploit its strategic location at the crossroad of Asia and the Pacific region because of its poor connectivity. He emphasized the need to coordinate the regional frameworks of SAARC, ECO and BIMSTEC regionally to exploit the synergy and network externalities more fully. He mentioned that intergovernmental agreements on the Asian Highway and the Trans Asian Railway, adopted under the auspices of ESCAP were meant to assist member countries in planning, implementing and improving the transport infrastructure in a coordinated manner to maximize the synergies. The new inter-governmental agreements on dry ports, which had been offered for signatures, would help to integrate the Asian Highway and Trans Asian Railway networks into an intermodal transport system. He pointed out that with the establishment of South and South-West Asia office in New Delhi in December 2011 ESCAP secretariat was now focussing greater attention to this subregion. This regional conference was the second in the series of such events launched by ESCAP with partners in different countries and would build on the first event held in Dhaka in June There are plans to launch more such initiatives in different parts of the subregion in the coming months. The UNESCAP s proposal of developing a connectivity master plan for the region was endorsed in Dhaka and the UNESCAP hopes to work with different stakeholders in the coming years to develop it. 4. Honourable Engr. Khurram Dastgir Khan, Minister of State for Commerce stated that regional integration is the recipe for growth and efficiency gain and development of regional infrastructure brings about a direct and positive impact through linking and strengthening economic corridors, by reducing trade costs and attracting foreign direct investment. The Minister stated that the Government of Pakistan is convinced that international trade can bring the much need prosperity through job creation and foreign exchange earnings. This is equally important that policy interventions must also aim at increasing trade with the neighbouring countries which would demand improving transport infrastructure and trade facilitation. In the recently announced Vision 2025 for Pakistan, improving regional connectivity through trade Page 2

3 corridors, motorways, energy corridors and industrial zones is one of the priority area of work for the Government. Regional integration must bring prospects not only of prosperity but also of durable peace, security and stability. Government of Pakistan is making sincere efforts with its neighbours for improving regional integration as a tool for regional peace and prosperity. The expertise available with UNCTAD, UNESCAP and the World Bank in the area of transport connectivity, trade facilitation and regional integration is well acknowledged and recognized. The Minister expressed confidence that the knowledge gained through this Conference and recommendations emanating from it would be useful for the policy formulation by Pakistan. He emphasized the role of development partners in supporting investment in multi-country transport infrastructure. The Minister inaugurated the Conference. Session 1: High-level Panel on Potential and Prospects of Strengthened Transport Connectivity in South and South-West Asia Chair: Mr. Habibullah Khan Khattak, Federal Secretary Ministry of Ports & Shipping, Government of Pakistan. 5. Dr. Nagesh Kumar, Director South and South-West Asia Office pointed out that South and South-West Asia (SSWA) is the least integrated region in the world. Bulk of intraregional trade potential remains unexploited in SSWA. Intraregional trade could generate additional $52 billion of exports, with potential for increasing it in 2017 to $167 billion. He mentioned that the results of the geographical simulation model run by the ESCAP suggested that the improved connectivity led to reconfiguration of the economic activities where the lagging regions or the poorer regions got more benefits and some activities moved from the more developed regions leading to a more balanced outcome. He said that like any other network, benefits of externalities grow disproportionately as the corridors are extended and therefore there is a case for integrated transport corridors across the sub-region to maximize network externalities. He suggested that SAARC, ECO and BIMSTEC should coordinate the transport connectivity related work so that one single corridor can connect all these subregions following ESCAP s Asian Highway and Trans Asian Railway and this extended corridor could make South and South-West Asia region a hub of East-West trade with each country on the route a hub for others leading to mutual interdependence and shared prosperity. In this context he mentioned about the two corridors proposed by the UNESCAP SSWA. One is the road corridor along the Asian Highway route linking Turkey, Iran, Pakistan, India, Bangladesh, Myanmar, called in short TIPI-BM road corridor. The other is the Trans Asian Railway corridor linking the Istanbul-Tehran-Islamabad containers goods train with the planned container train connectivity between Bangladesh, Nepal and Bhutan. The connectivity all the way from Istanbul to Dhaka and further to the East Asian countries could thus be perceived by linking these two regions, one under ECO and one under SAARC by a railway network in India. He said that it could be developed following a building block approach as a part of an agreed master plan with greater financial viability to mobilize resources. These would open potential trade channels connecting Europe, Central Asia, West Asia, South Asia, and East Asia. Following actions were recommended as the way forward: Page 3

4 Prioritize physical infrastructure development Closing the infrastructure gaps and upgradation of others Address transport facilitation bottlenecks Regional transit agreements to enable cross border movements Mobilizing resources for infrastructure development through multilateral development banks, public-private partnership and development of regional financial architecture He pointed out that foreign exchange reserves of $7 trillion or more held by the Asian countries could be mobilized for the development of regional financial architecture. The multilateral development banks like the World Bank and the ADB are also potential funding sources apart from bilateral funding arrangements. 6. Mr. K. L. Thapar, Chairman, Asian Institute of Transport Development, New Delhi ascribed fragmentation of transport links in the region to historical legacy and mentioned that there is potential of reducing the non-tariff and behind the border costs by as much as percent. He mentioned that the prevailing trading regime is often saddled with several opaque measures and land routes are restricted for movement of commodities even though these are not in the negative list. The restrictive trade practices inevitably lead to smuggling activities. He pointed out developments in the maritime sector leading to opening of new sea-cum-land routes like newly developed ports at Bandar Abbas and Chabahar (Iran) and Gwadar (Pakistan) for accessing Afghanistan and beyond. Bhutan and Nepal have been allowed the use of Mongla and Chittagong sea ports in Bangladesh; Myanmar has allowed the use of its port at Sittwe for transit traffic to North-East region of India. The recently completed road from Delaram to Zaranj links the road network of Afghanistan with Iran and its port at Chabahar. He informed that in the rail sector, Uzbekistan and Turkmenistan have rail links with Afghanistan and Pakistan has planned to extend railway line to Afghanistan. Iran will have a spur line to Herat (Afghanistan) and has built a rail link to Pakistan. Iran has developed transport links to the Central Asian Republics, thereby opening a new corridor for South Asia to access these republics. Turkey has started a train ferry designed to carry rail traffic through Lake Van. This facility enables rail link between Iran and Turkey. He pointed out that agreement on Trans-Asian railways and Asian Highways network has the potential of providing integrated inter-modal transport corridors and described development of integrated check-posts at the borders as important initiatives in trade facilitation. Projecting about the likely future scenario he mentioned that regional production networks are likely to become more important in future; availability and access to relevant technologies in the neighbouring countries would be cost-effective in the long run and would also bring about harmonization of transport technologies. He said that restoration of traditional transport links by road, rail and waterways would involve minimal investments and would result in maximum benefits in the shortest timeframe. This would help in revival of languishing railway systems. Trans-border pipelines carrying energy and optic fibers providing digital connectivity could be laid alongside the railway lines and highways. He stressed that non-government organisations having a regional footprint have an important role to play in regional cooperation. Page 4

5 7. Mr. Haroon Sharif, Adviser, World Bank, Islamabad mentioned that the world is moving out of a unipolar world with certain other powers emerging leading to certain regional institutions and the institutions of global governance is possibly not adjusting to the regional dynamics. Powers of smaller countries in the region in terms of getting their voice heard economically and strategically would be far more significant. Mr Sharif mentioned that the World Bank was trying to connect South Asia, particularly Pakistan, Bangladesh and Nepal on the eastern side with West Asia and the Central Asia. He said that people have not seen a large regional cooperation project working in fraternity. The World Bank is trying to strike one or two deals in the next two years so that people start believing that they can actually think beyond their internal market. Finally, he emphasized the critical need of knowledge partnership and credible knowledge at the regional platform. He informed that the World Bank is partnering with a number of think tanks and private sector to come up with credible data and disseminate among private space. He stated that connectivity would be far more lucrative and selling to the policy makers and private sector if this is linked to understandable benefits. He informed that the World Bank has allocation for regional IDA. For funding any two or more countries into a project, the World Bank does not tap country allocation. 8. Mr. Jan Hoffmann, Chief, Trade Facilitation Section, UNCTAD started his presentation on transport connectivity for landlocked countries by mentioning the WTO Bali Ministerial Conference which had concluded by finalizing the WTO Agreement on Trade Facilitation. He informed the Conference that the UNCTAD s Review of Maritime Transport 2013 was released last week and this report answered some very interesting questions. He pointed out that availability of more transport supply created more competition, lowered freights and generated more trade. Better trade facilitation leads to more trade, generates more income to finance trade facilitation. He mentioned that transport connectivity is a key starting point in this chain. He said that containerisation has lowered trade costs and led to more trade. He referred to an empirical finding that distance is less important for freight rates than connectivity. He informed that customs and other trade facilitation measures are gaining prominence in growing number of Regional Trade Agreements (RTAs). He mentioned that facilitation of trade to land-locked countries is in the interest of transit countries as economies of scale and improved connectivity reduce costs of the transit country s own trade and generates other induced economic activities. He informed that Bali Trade Facilitation Agreement had a number of Articles related to transit trade. He recommended that assurance of uninterrupted transit should be adopted as a basic feature of all trusted transit operator programmes and pointed out that trade and transport facilitation reforms help to formalize trade, save time and frustrations, improve governance, empower women entrepreneurs, strengthen regional integration, modernize public administrations, foster IT capacities, improve security, and increase revenue collection. He further stated that introduction of ICTs by Customs encourages SMEs to connect to the internet; Page 5

6 and a framework for bank guarantees for transit trade helps improve the financial system. A single window experience for trade may help to introduce single windows elsewhere.. 9. Mr. Sandeep Raj Jain, Economic Affairs Officer, Transport Facilitation and Logistics Section, Transport Division, UNESCAP in his presentation on Strengthening Transport Connectivity in South and South West Asia mentioned about ESCAP s work on the seven international Conventions under ESCAP resolution 48/11 and the Regional Strategic Framework, which address the issues of non-physical barriers holistically. He stated that a master plan to strengthen transport connectivity in the South and South-West Asia is a way forward. The master plan will cover existing transport infrastructure projects and transport facilitation agreements requiring minimal investment. It will be a strategic document with action plans for short and medium term and will be developed through consultations at the country and subregional level followed by adoption by countries. Multilateral development banks, various aid agencies and and subregional initiatives like ECO and SAARC will be the partners. ESCAP tools for developing master plan will include Regional Strategic Framework for Facilitation of International Road Transport and four transport facilitation models, namely, Efficient Cross-border Model; Secure Cross border Model; Model on integrated controls at border; and Time-cost distance methodology. The Master Plan will be implemented in phases with in-built mechanism of monitoring. 10. Open floor discussion Views were expressed that the recommendations of the Conference should be followed up preferably through a working committee. The audience was informed that the Ministry had already made a working group and committee on regional connectivity, which is seeking recommendations. The proceeding of this Conference should go to that committee. It was indicated that Bali agreement makes it obligatory for each country to have a committee at the national level. For regional level there can perhaps be some mechanism thought of for these national committees to coordinate. Opinion was expressed that Pakistan should have facility of a transhipment hub; policies are needed for running transhipment terminals. Suggestions were made that Pakistan s strategic location should be exploited for the country to emerge as a hub of East-West. For this, giving transit to other countries can bring economic activities. It was suggested that people should be educated about supply chain management and it should be arranged in a professional way. Concerns were expressed regarding extremism and terrorism posing big hurdles and the political powers controlling the development of trade and industry in Pakistan. In response, views were expressed that compelling economic arguments may bring countries together and drop hostilities. Europe was cited as a case in point. Page 6

7 SESSION 2: Status of Transport Connectivity including Transit Facilitation in South and South-West Asia: Country Presentations Chair: Mr. Hassan Nawaz Tarar, Federal Secretary, Planning, Development & Reforms Division, Government of Pakistan. 11. Mr. Raja Nowsherwan, Member, National Highways Authority, Ministry of Communications, Pakistan made a presentation on realizing the potential of strategic location of Pakistan through connectivity. He stated that to achieve the goals of regional connectivity improvement of road, rail and ports infrastructure; and regulatory framework i.e. regional, bilateral and multilateral transit transport agreements were essential requirement. Such regional linkages enabled regional integration, promoted multimodal transport, enhanced of trade and tourism, reduced trade and transportation costs and promoted security and peace in the region. Aim of the Government of Pakistan was to develop Pakistan as a hub of sub-regional connectivity between high growth East Asia and resource rich Middle East, improve regional connectivity, establish efficient and well integrated transport system to achieve competitive economy, reduce transport costs and enhance affordability, increase road density from 0.32 to 0.64 Km / Km 2 ; and achieve 50% reduction in travel time, 10% decrease in road transport costs and 50% decrease in transportation losses. Describing Pakistan s road connectivity with the neighbouring countries he mentioned that there are four routes linking China and Pakistan; eight road links with Afghanistan and two road links with Iran and two with India. There is a proposed road-link between Pakistan and Tajikistan via Afghanistan. AH1, AH2, AH4, AH7 and AH51 are the designated Asian Highway routes in Pakistan. Some are in good conditions whereas some are being upgraded or reconstructed in different stretches. Pakistan is a member of CAREC and recommended a number of corridors. He emphasized the criticality of institutional consensus in moving forward. 12. Mr. Mohammad Malyar Jabarkhel of Afghan Customs Department mentioned that Afghanistan in Heart of Asia and is situated in important strategic location connecting South Asia with Central Asia. Afghan Government is very serious about transport transit projects and infrastructure. There will be more tunnels established in Salang Pass, which is vital for connecting Central Asia with South Asia. Rail routes of Afghanistan have been extended from Hairatan to Pakistan through Mazar-e-sharif and will be extended to Turkmenistan border. One railway line will be extended from Iran to Herat city. Afghanistan is investing in dry ports, border facilities and customs infrastructure. He explained how Afghanistan was being transformed from a land locked country to land linked country by implementation of web-based ASYCUDA World. It was an integrated multifunctional platform working as Customs centric Single Window with enhanced technical capabilities. 95% of total trade and transit declarations were already covered. The system is being used as a data exchange system between Pakistan and Afghanistan under APTTA. Afghanistan has recently reactivated its membership with TIR. Key Page 7

8 factors of efficient customs transit were legal framework, integration of functions on regional level, secure guarantee system, infrastructure and modern and efficient computerised system. 13. Mr. A.G.M. Mir Mushir Alam, Deputy Secretary, ministry of Commerce, Bangladesh presented a detailed scenario of total as well as land border trade with the countries participating in the conference He explained the legal arrangements between Bangladesh, India, Nepal and Bhutan for movement of transit trade by road and rail through Bangladesh and also the major challenges faced for efficient flow of transit trade. He mentioned that the Bhutanese and Nepalese trucks have necessary permission to enter into Bangladesh territory by using Indian land but the Bangladeshi trucks have no such permission to enter into Land Port in Bhutan and Nepal. Some of the challenges faced at border crossings are: delays in clearing or unloading of Bangladeshi trucks, delay in checking quality of export items, absence of quarantine facility, overloading of trucks, absence of warehousing facilities, insufficient space for unloading for transhipments, gauge conversion of rail line between Birol-Radhikapore and need for establishing rail linkages at other border crossings. To support trade facilitation measures ADB has undertaken the Transport Logistics and Trade Facilitation Project under SASEC to develop the missing rail link between Akhaura (Bangladesh) and Agartala (India) and to develop a cross-border management regime and has conducted Business Process Analysis to identify various bottlenecks that affect trade between Bangladesh and Nepal, and Bangladesh and Bhutan. Main challenges in implementing facilitation measures are harmonization of design standards for roads and bridges, vehicle speeds and loading; political attitudes; economic non-viability of introducing automated system in all land border stations; and shortage of adequate funds. He emphasized the importance of the Intergovernmental Agreement on Dry Ports being adopted by the ESCAP member countries as a key step towards streamlining trade facilitation. In order to ensure seamless movement of cross-border traffic, his recommendations were: deployment of ITbase traffic information to provide homogeneous information on road corridors; a Motor Vehicle Agreement; harmonization of traffic information service. He emphasized the need for exploring innovative financing options for regional infrastructure development and maintenance need along with the ways of enhancing private sector participation in infrastructure. 14. Mr. Tshering Wangdi, Chief Engineer, Department of Roads, Ministry of Works & Human Settlement, Royal Government of Bhutan made the country presentation. He mentioned that Bhutan s road transport vision includes, among others, construction of dry ports, completion of Asian Highway (AH 48) from Phuentsholing to Thimpu and construction of Southern East-West Highway to connect economic hubs in southern part of the country and onwards to India. There is no railway in Bhutan. Bhutan is land locked and the connectivity by land transport is possible through India. International connectivity is provided with India, Nepal and Bangladesh by AH 48 and AH 2. Phuentsholing near Jaigaon in West Bengal is the main gateway for international trade (over 82 per cent). About 55% import and 94% export takes place with India. Trade with other countries Page 8

9 within the SAARC region is marginal. Small volume of cargo makes it infeasible to book railway wagons or use bigger containers to and from the sea port. For third country imports majority of the goods are transported in containerized cargo. Goods coming from India are transported in open trucks. Bhutan s legal and regulatory regime for accession to revised Kyoto Convention is being assessed under ADB funded SASEC Trade Facilitation Program. Revenue Administration Management Information System (RAMIS) is being developed under ADB funded technical assistance and various other trade facilitation initiatives have been taken. Agreement on Trade and Commerce with India allows free trade between the two countries through designated entry and exit points. Transit of cargo from sea-ports is subject to very minimal checks. There is also free movement of Bhutan registered vehicles in India. With Bangladesh, international trade takes place through designated entry and exit points from the India and Bangladesh. There is no formal trade and transit agreement with Nepal so far. Panitanki near Siliguri in India is designated as the transit route for Bhutan-Nepal trade. Bad road condition, multi check post of local authorities on the highways and lack of timely border coordination meetings are the major challenges. 15. Mr. Y. S. Shahrawat, Chairman, Land Port Authority, India stated, that India had 13 major inland border crossing points with neighbouring countries. The Land Port Authority of India had been established to develop and manage the facilities for cross border movement of passengers, cargo and vehicles. It will set up roads, terminals, warehouses, parking and office buildings; provide space and facilities to regulatory agencies, banks, post office, tourist information centre etc.; install goods handling, communication, security and scanning equipment; put in place systems to address security imperatives; and co-ordinate among all the authorised agencies at the inland crossing points. In the first phase it is to establish Integrated Check Posts (ICP) at 7 locations with various bordering countries and follow these up with another 6 ICPs in the second phase. These ICPs will be state of the art facilities with single window facility to enable smooth movement of passengers and cargo. The ICPs will reduce transport and transaction cost, decrease informal trade, increase bilateral & transit trade, generate employment and wealth, boost investments and opportunities, and stimulate travel and tourism. The speaker mentioned about functional ICP at Attari, 30 kilometres from Lahore; and one in Agartala in the east. Whatever facilities are available in international airport for cargo and passengers are also provided for in the ICP. 16. Mr. M. Mokhber, Road Maintenance & Transportation Organization, Government of Islamic Republic of Iran provided information regarding road network of Iran, movement of cargo through various border terminals and stated that share of road is about 95% in movement of freight and passengers. The administrative arrangements for handling passengers and cargo have been well defined. Physical facilities at the border terminals have been laid out to facilitate movement of passengers and cargo. A number of Customs, road and rail conventions have been acceded, and several bilateral, multilateral agreement signed by Iran to enable smooth flow of traffic through the transit corridors of Iran. Various measures such as renovation of road Page 9

10 transport fleet, improvement of national road network, increased transport security, adoption of new technology and IT systems, development of border crossing terminals and TIR- Parks and establishment of ASYCUDA Single Window system are being adopted to facilitate transit trade. Main challenges to be addressed are: relatively high time and cost of transit, lack of multimodal transport, visas for drivers, lack of scanners for trucks and drugs, lack of return cargo for container, and deficiency of human, animal, and plant quarantine facilities 17. Mr. Keshab Kumar Sharma of Nepal stated that absence of seaport deprives Nepal competitive global business. Up to 40% high transit cost inflates the price of both imports and export. Consequently most of the trade is with India and China. He said that transit to Bangladesh is through Phulbari-Banglabandh route. Road condition is poor near Phulbari. Banglabandha port has not been fully functional owing to the absence of a transit agreement for the use of Indian territory as a transport route for Bangladeshi, Nepalese and Bhutanese trade cargoes. The East-West Highway has a missing link on the west side with India in Banbasa. Similarly, there is a physical barrier of the old Sarda bridge. The trucks cannot move. Regarding cross-border operation for freight by rail, the speaker mentioned that it is not possible to transit completely by rail to Nepal as the Jamuna Bridge (Bangladesh) cannot support rail freight loading. In spite of number of transit and trade agreements, transit processes and procedural controls remain cumbersome.to facilitate trade Customs Act and Regulations have been amended and new provisions incorporated in line with Revised Kyoto Convention and WTO Valuation system. Trade and Transport Facilitation Committee under Commerce Secretary has been formed to steer trade facilitation. Short term (within 1 year), medium term (within 3 years) and long term (within 5 years) plans have been prepared for implementation with technical assistance of international organizations. 18. Mr. Erdem Direkler, Deputy Director General, Department of Transport, Turkey stated that Turkey was located on main trade and transport arteries; it was exporting many commodities to different countries and had shown high growth in trade and GDP during the recent years. It was member of various international organizations and had acceded to many international conventions to facilitate trade and transport. It had adopted uniform harmonized procedures in keeping with international standards and had many technical assistance projects in hand. SESSION3: Business Perspective on Challenges to Transport Connectivity in South and South-West Asia Chair: Mr. Rashid JanMohammad, Director, National Trade & Transport Facilitation Committee 19. Mr. Zulfikar Ali Bader, Chairman of SAARC Chamber Young Entrepreneur Forum mentioned that the lack of transport and trade facilitation poses a big hurdle and one of the important steps to reduce this hurdle is through proper training of the staffs. He mentioned that Page 10

11 in the regional context improvement of connectivity between India and Pakistan is important because these two countries are major players in the SAARC region. However, decision making takes too long. He informed the audience of the forthcoming youth conference SAARC Chamber Young Entrepreneur Forum and said that such conference could provide platform for friendly interaction between people, entrepreneurs and politicians and help ease the decision making process. He showed a short film, which was a promo of the youth conference. 20. Mr. Babar Badat, Senior Vice President of Global FIATA, Pakistan presented FIATA s perspective regarding lack of transport infrastructure in South and South-West Asia, and stated that lack of logistics connectivity in many parts of the world is the biggest non-tariff barrier to the growth of international trade. He said bottlenecks are encountered because of poor condition of roads, lack of intraregional connectivity between the national road networks, unreliable and overall costly road transport services, unrealized high potential for rail and inland water freight, and inadequate road and rail connectivity of ports with the hinterland. He recommended audit of logistics infrastructure in each country of the region. FIATA stresses importance of logistics connectivity and suggested that there should be a common platform of logistics association of the region involving government and private sector. He recommended that in Pakistan there should be one ministry to deal with transport issues; currently different sectors of transport are under different ministries. 21. Mr. Rajan Sharma, President, Nepal Freight Forwarders Association mentioned that Nepal is a land locked country and therefore the logistics cost is very high. 35 to 40 per cent of the logistics costs are due to detention and demurrage charges. He mentioned that the lack of consolidation for LCL movement also increases logistics costs. For trade facilitation, Mr Sharma emphasized the importance of engaging private sector in decision making process, recognizing the criticality of the flow of information and finance, predictability of the supply chain, knowledge and compliance with the international regulations and standards. He recommended activating Asian Regional Standard Organization, capacity building in the government and the private sector, optimum capacity utilization of infrastructure, and joint drafting of transhipment modalities for automation, risk management and Single Window application. He narrated that for trade facilitation in Nepal, ICDs have been made and are being constructed; logistics Master Plan is under preparation; Single Window System is being introduced and transhipment module is being drafted. Custom is also working on its e- custom Master Plan; CTD automation with India is being worked on and laboratories are being set up in strategic locations. He mentioned that Government of Nepal engages private sector in important committees on trade and transport facilitations. He recommended that there should be a regional public-private sector forum to meet every six months. 22. Dr. Arbind Prasad, Director General, Federation of Indian Chambers of Commerce & Industry, India stated that poorly developed land transport linkage constrains regional economic integration in the South and South-West Asia (SSWA) region. The SSWA region is better connected with Europe and North America than with itself. As a result, the trade costs are high and the benefits of geographical proximity and contiguity are not available to the region s trade. Page 11

12 Enhancing transport connectivity is essential to reduce transportation costs for economic and trade development in the region, and to emerge as a hub of East-West trade. He mentioned that challenges to regional connectivity arose from the absence of integrated and improved cross-border transportation network and regional transit system; poor quality and inefficient infrastructure services, both hardware and software; high transportation costs, poor institutions, and missing links in road and rail networks. Challenges relating to the trade barriers include cumbersome cross-border and transit transport procedures, multiple handling and different standards on vehicles and drivers across countries. There are delays at borders due to different operating hours across the border and the need to change the trucks at the borders. There are several difficulties relating to railways. Train service at Wagah is underutilized (almost 60 to 70%); consignments are delayed due to unavailability of wagons at borders and transhipment loading and unloading process. As a future road-map he recommended the following: Developing and upgrading land-based transport infrastructure Constructing missing links Removing non-physical barriers to transport Regional transit agreements to enable cross border movements Constantly improving the performance of border corridors and Land Customs Stations (LCSs) Eliminating the asymmetry between the Land Customs Stations Removing multiple handling of goods at border An integrated action plan for developing transport connectivity and trade facilitation in the region 23. Mr. Harpreet Singh. Director (Projects & Services), Container Corporation of India Ltd.(CONCOR) pointed out that South and South West Asia region comprises high growth countries as compared to the world average. However, domestic and regional trade through transport connectivity is a must to sustain growth. To achieve this greater emphasis needs to be laid on improving rail connectivity of the region. He informed that Container Corporation of India Ltd is the leading multimodal logistics company of India with extensive facilities and 80% market share. The Corporation is also planning operation in other neighbouring countries. Talking about the challenges, Mr. Singh mentioned that the Trans Asian Railway has missing links and gauge mismatches between some countries. He said that demonstration run of container train between Bangladesh, Nepal and India has already been planned and then the plan is to move to other regions for connectivity. For container movement, container interchange protocol between India and Pakistan and also between other countries needs to be finalized. The modalities of containers to be moved across the border needs to be tied up with all stakeholders including shipping lines. Page 12

13 24. Open discussion. Responding to a question seeking elaboration of the purposes and possible benefits from transport audit, it was clarified that that infrastructure audit will help to make assessment of transport facilities. The audit will reveal the level of integration between different modes of transport. The audit will allow bringing everything on a common platform and it will help galvanizing opinion regarding where exactly investment is needed for the maximum benefit of the industry and the economy. It was informed that this kind of audit has already been undertaken by the Government of Pakistan. Answering a question about whether any country of the region is focussing on the development of logistics infrastructure Mr Badat said that China has budgeted $ 1 trillion for investment in logistics over the next ten years. SESSION 4: UNESCAP Recommendations and Tools for Transport Facilitation Measures Moderator: Mr. Jan Hoffman, Chief, Trade Facilitation Section UNCTAD 25. Mr. Sandeep Raj Jain, Economic Affairs Officer, Transport Facilitation and Logistics Section, Transport Division, UNESCAP made presentation of various tools developed by the UNESCAP that help facilitating road transport. He mentioned that ESCAP s Facilitation Toolkit contains Secure Cross-Border Transport Model; Efficient Cross-Border Transport Models; Model on Integrated Controls at Border Crossings; and Time/Cost-Distance Methodology. The Secure Cross-Border Transport Model of the UNESCAP uses various technical devices such as tracking unit, e-seal, e-lock, monitoring platform, and PDAs. Application of these technical solutions requires close cooperation between the control authorities of the countries formalized by bilateral agreement or a mutual recognition agreement. These systems offer benefits to control authorities in terms of increased safety and security, real time enforcement and enhanced capacity to handle traffic. For transport operators the benefits are in terms of reduced transport time, less transaction cost, increase predictability of consignment, optimal fleet management and asset utilization. These technologies are widely available and being extensively used in transport sector in various parts of the world. The model gives an idea about how a vehicle tracking system can be developed, which can address the cross-border needs. Many of the software are available on-line and the systems are becoming more interconnected. It is possible to share information in different domains, different functional departments and in different kinds of operating systems. 26. Ms. Heini Suominen, Associate Economic Affairs Officer, TD, UNESCAP described the ingredients of Efficient Cross-Border Transport Models. Efficient Cross-Border Transport Models provide analytical framework to compare various options to address a comprehensive list of non-physical barriers. Solutions are then ranked in terms of difficulties and costs. She then described another UNESCAP model, the Model of Integrated Controls at Border Crossings. Various control agencies operate at borders, with differing but overlapping data needs. The model provides concept of integrated use of ICT-based systems and modern equipment at land border crossings on the basis of sharing of information. Benefits of the application of this model Page 13

14 derive from more efficient flow of information, minimized interventions in the process of crossing borders, inter-agency sharing of the results of the inspections, etc. She then went on to present the UNESCAP s Time/Cost Distance Methodology. The purpose of this model is to identify inefficiencies and isolate bottlenecks along a particular route by looking at the cost and time characteristics of every section along a route. The methodology can be useful in three ways. It can compare, over a period of time, the changes of cost and/or time required for transportation on a certain route; compare and evaluate competing modes of transport operating on the same route; and compare alternative transport routes. It is simple to use and flexible and can be applied in different contexts; uses minimum information. 27. Mr. Sandeep Raj Jain, Economic Affairs Officer, Transport Facilitation and Logistics Section, Transport Division, UNESCAP said that these models will be used to support the Master Plan. He mentioned that the UNESCAP s Regional Strategic Framework for Facilitation of International Road Transport identified fundamental issues in road transport. The ESCAP has suggested how to resolve these issues. These can be through international regulations, bilateral or subregional agreements. Key modalities to resolve this problem will include: building an effective legal regime; wider application of new technologies; development of professional training for drivers; establishment and strengthening of national coordination mechanisms; promotion of joint controls at border crossings; promotion of economic zones at border crossings; and application of facilitation tools. For effective legal regime ESCAP has developed Regional Network of Legal and Technical Experts. He mentioned about the principle of Joint Customs Control, which implied control and regulation in only one place. 28. Open floor discussion. It was reported that the ECO is facing difficulties in using common VISA stickers for the drivers; some of the countries were not even ready to discuss such arrangements. ESCAP s Regional Framework has recommended simplification of VISA procedure for the drivers. The suggested way was for the transport operators to send the list of drivers to the embassies so that the drivers can get one-year VISA with multiple entries. This can be incorporated as a part of bilateral or multilateral agreement. However, doubts were expressed about likely effectiveness of the approach suggested by the ESCAP s Framework. It was also reported that the ECO was facing problems on Third Party Liability Insurance. Responding to a question it was clarified that Joint Control could take various forms. There could be dedicated common controlling office at the border where officers of one country could go and inspect the goods. Examples were given that there was a provision in the CBTA in the GMS countries for such joint controls. There was a joint control in Turkey-Georgia border crossing. China and Tajikistan had a common manifest. Pakistan and India have joint manifest at Wagah border. Responding to a question on actual example of the UNESCAP s Time/Cost-Distance Methodology in South Asia it was clarified that no such instance of application of the method in South Asia was known. ADB in Central Asia monitors corridors through this methodology. In response to a question raised it was clarified that the Time/Cost-Distance Methodology was not being used for ranking countries. Page 14

15 SESSION 5: Transit, Regional Connectivity and Integrated Border Management Chair: Mr. Lutfullah Virk, Chief Collector Customs, Pakistan 29. Dr. Manzoor Ahmad, Regional Trade Adviser, USAID mentioned that Pakistan has several regional agreements focussed on trade and transit transportation, but Pakistan was not making use of these agreements; and in terms of transit it is isolated. He mentioned that the number of containers moving through Pakistan has declined after the signing of APTTA with Afghanistan in He mentioned that despite approval by the Pakistan Cabinet in 2002, Pakistan has not implemented TIR Conventions whereas all the other nine member countries of the ECO have implemented it. As a way forward he suggested that Pakistan s granting MFN status to India will enhance Pakistan s exports and revenues. He gave examples of how Pakistan s trade and revenue had increased through Wagah border. He also advocated implementation of TIR. He suggested that Wagah border should be made operational 24 hours and four or five more routes could be opened subject to political decisions. Speaking about trade facilitation stressed the need for risk management, information availability, expediting the new WTO agreement on trade facilitation built on the Revised Kyoto Convention, introducing integrated border management, developing supply chain and suggested that cargo should move straight to dry ports rather than getting trans-loaded manually at the border. 30. Syed Tanveer Ahmed, Director (Reforms and Automation), Pakistan Customs explained the Web Based One Custom (WeBOC) system introduced by Pakistan Customs for processing the trade documents, under which all custom processes are performed on-line by customs staff. It includes risk management system under which inspection/examination of goods is already reduced from 100% to 30%. To implement the system training has been provided to staff of all the concerned organization. It is planned to progress automation of customs in stages to achieve: Paperless Customs; Port Community Information Exchange; linkage of other government agencies for paperless permits and certificates; National Single Window; and Regional Single Window. The system comprises the following components: ACCESS (Automated Customs Clearance System) to deal with all Customs clearance procedures TARIP (Tariff and Integrated Policy) to give complete picture of regulations for import or export ECHO (Enhanced cargo handling and port optimization) to connect port authorities, carriers (shipping agents and co-loaders), Customs agents etc. INTRA (Integrated Regulatory Authorities) to connect the regulatory authorities involved in imports/exports. Federal Board of Revenue, all VAT and direct tax commissionerates, Central Bank and National Bank have been connected. Ministry of Commerce, Ministry of Production, Plant and Animal quarantine have been given links. Registered transport sector is on line Page 15

16 He had suggested that for effective implementation of these ideas customs should be declared a lead agency with support and monitoring at the highest level, at the level of the Prime Minister. For Single Window, there is a need for a legal framework to bind all the ministries and departments, he said. 31. Dr. Jawwad Uwais Agha, Collector Customs, Pakistan spoke about the potential for regional connectivity and stated that it involves transfer of relevant customs data in a structured format, by agreed message standards, in a secure environment, from one country s customs system to another without human intervention. It was necessary to follow international standards and best practices. Customs administrations of the countries to be connected have to take the initiative by establishing joint technical working arrangements, enter into necessary agreements and take stakeholders along. He informed that Pakistan, in the recent past, has taken a few regional initiatives with its neighbours. Data exchange is taking place between Afghanistan (ASYCUDA) and Pakistan (WeBOC). On the cards there is an initiative to have EDI with India at Wagah; the CAREC initiative; and the EDI and connectivity with China. There is a good potential for sharing expertise in the region. Regional connectivity platform is a must happen for connectivity. 32. Dr. Shaheen Afroze, Research Director of Bangladesh Institute of International and Strategic Studies mentioned that South Asia provides huge opportunities for trade, investment, and economic growth but mistrust and historical hangover restrict such opportunities. As a result South Asia continues to remain as the least integrated regions in the world today but there exists tremendous potential to enhance intra-regional trade up to USD 40 billion once challenges to connectivity are addressed. She informed that Bangladesh and India signed a Framework of Agreement in 2011 for the use of Chittagong and Mongla sea ports by India, Nepal and Bhutan through road and rail and it was agreed to develop Ashuganj in Bangladesh and Silghat in India as new ports of call. Construction of rail link between Akhaura (Bangladesh) and Agartala (India) to be financed by a grant from India was also agreed upon. The project is under implementation. The Government formed a core committee to analyse the various transit related issues and their implications and make recommendations to the government. According to the core committee report, Bangladesh roads are unfit for heavily loaded trucks to ply unless express ways of higher loading standards are built. With regard to rail routes, major constraints include weight restrictions on Jamuna Bridge where there is also a restriction on the number of trains that can cross the bridge per day. She indicated that Bangladesh, in the meantime, is addressing the challenges with regard to the software side of connectivity. Custom procedures are being modernized and improved; ASYCUDA (Automated System for Customs Data) is in process. Chittagong port is under several reforms; and the Government and the private sector have been working very closely. Page 16