Expert Meeting on REGIONAL COOPERATION IN TRANSIT TRANSPORT: SOLUTIONS FOR LANDLOCKED AND TRANSIT DEVELOPING COUNTRIES 27 28 September 2007 Transit Transport in Afghanistan by Hedayatullah Watanyar Head of the Directorate of Transit and Trade Facilitation Ministry of Commerce and Industry This expert paper is reproduced by the UNCTAD secretariat in the form and language in which it has been received. The views expressed are those of the author and do not necessarily reflect the view of the United Nations.
جمهوری اسلامی افغانستان وزارت تجارت و صنايع دافغانستان اسلامی جمهوريت دسوداگری او صنايعو وزارت Islamic Republic of Afghanistan Ministry of Commerce and Industry Directorate of Transit and Trade Faciliation ***************************************************************************** Presentation for the UNCTAD Expert Meeting on Regional Cooperation in Transit Transport Solutions for Landlocked and Transit Developing Countries On 27-28 September 2007, Palais des Nations, Geneva Introduction Transit Transport in Afghanistan In the Midst of Central Asian Crossroads by Mr. Hedayatullah Watanyar Head of the Directorate of Transit and Trade Facilitation Ministry of Commerce and Industry, Islamic Republic of Afghanistan Excellencies, distinguished experts, ladies and gentlemen, I feel honoured to address this expert meeting on the subject of regional cooperation in transit transport, such a crucial and timely subject for my country. I would like to thank UNCTAD, and in particular the trade facilitation project it executes in the Ministry of Commerce and Industry as part of a larger World Bank project on customs modernisation, for enabling me to participate in its proceedings. Afghanistan is a least developed, landlocked country whose international trade and transit capability was practically destroyed during 30 years of war, economic and social disruption and endemic security problems. The strengthening and modernisation of transit transport is essential for ensuring Afghanistan s development. Over the past six years with the technical and financial support of the international donor community great strides have been made in strengthening the institutional and policy base and fostering market mechanisms that will gradually lift the country s economic and trade performance and afford its population a better standard of living. By virtue of its strategic geographic location, Afghanistan is in a position to leverage its ability to facilitate vital transit for its neighbours with its own needs for gaining access to international markets through efficient and cost effect means and routes via its neighbours. This can best be achieved through equitably negotiated bilateral agreements on transit and transport and regional arrangements. But for their implementation a government needs to have political strength and determination as well as the required human and physical resources. In my short presentation I would like to outline the government strategy and the role of the Directorate of Transit and Trade Facilitation in harnessing the realisation of these multifaceted objectives. 1
Regional Cooperation The case for regional cooperation to boost trade and transit is evident: almost 50 per cent of Afghanistan s trade is with its five neighbours Pakistan, Iran Tajikistan, Turkmenistan and Uzbekistan. Pakistan accounts for 98 per cent of intraregional exports and 44 per cent of intraregional imports; Iran accounts for 37 per cent of Afghanistan s intraregional imports, and Uzbekistan for 14 per cent. Afghanistan s intraregional exports are still negligible but trade with Pakistan and Iran is growing. While overall intraregional trade accounts for 4 per cent of total trade, it indicates its future potential provided Afghanistan builds up its production and export capacity and continues to improve its transit transport conditions. The main transit routes and products going through Afghanistan s various border points are: from Turkmenistan to Pakistan (scrap metal); from Iran to Pakistan (vehicle spare parts); from Uzbekistan to Pakistan (cotton, scrap metal and iron rods); from Tajikistan to Pakistan (scrap metal); from Pakistan to Iran (wheat); and from Pakistan to Uzbekistan (cement). The border points of Torkham and Spin Spoldak are important for Afghan imports from and through Pakistan (consumer-, intermediate and capital investment goods), and Islam Qala and Zaranj for diverse goods and from and through Iran. Regional economic cooperation is becoming an integral part of the globalisation strategies of most of Afghanistan s neighbouring countries, and trade and transit are among the top agenda items in successive regional economic cooperation conferences on Afghanistan. Through a series of agreements and conferences since 2002 (the Good Neighbourly Relations Declaration of 2002, the Dubai Declaration of 2003, the Berlin Agreements of 2003, The Bishkek Conference of 2004, the Kabul Conference of 2005, the Delhi Conference of 2006, and the upcoming Third Regional Economic Cooperation Conference on Afghanistan in 2008 in Islamabad), the core importance of Afghanistan in fostering cooperation and regional integration has been acknowledged. It can therefore seize the opportunity of serving as a land bridge between energy-rich Central Asia, energy-deficient South Asia and its high potential for manufactured exports, and the West Asian region. National and Ministry Strategy The Afghan National Development Strategy until 2010 foresees the promotion of Afghanistan as the centre of a regional transit network by virtue of its strategic geographic position to gain access to international markets and to link major trading powers by affording them the shortest access to the sea. These objectives are pursued through the North-South Transport Corridor, which connects Tajikistan, Uzbekistan and Turkmenistan with the Pakistani ports of Karachi, Qasim and Gawada and further (through Wagah) with India and South Asia the East-West Transport Corridor, which connects Tajikistan, Uzbekistan and Turkmenistan with the Iranian ports of Cha Bahar and Bandar Abbas. These and the reconstruction of Afghanistan s 2,237 km ring road and connecting roads to the provinces of 1,000 km are nearing completion. However, while infrastructure is important for ensuring direct and safe transit transport, other elements vital to transit transport needed to be addressed. The Ministry of Commerce and Industry s Directorate of Transit and Trade Facilitation is addressing at moment the most serious bottlenecks in Afghanistan s transit transport: 2
inadequate border facilities and management reluctance and sometimes interdiction of foreign truckers to operate in Afghanistan leading to transhipment, high handling costs, long transit times, and cargo damage and loss trucking cartels, pushing up costs sub-standard vehicle conditions arbitrary check posts, discriminatory collection of fees and unofficial charges resulting in long waiting times. The Directorate was mandated inter alia with the following specific tasks: reduce the trade logistics costs by promoting competitive transit routes and operations monitor the simplification of administrative and commercial transit formalities; devise benchmarking methods to track improvements in cross border and transit corridor operations;. negotiate transit and trade facilitation-related agreements and monitor their implementation; establish the Afghan Trade and Transport Facilitation Committee (AFPRO) to engage the private sector (traders and transit services providers) in an effective dialogue with the Government; establish Border Transit Facilitation (BTF) Bureaus at each border port to oversee cross-border operations, ensure transparency and monitor their activities; issue, in close cooperation with professional organizations (such as FIATA), the licensing of freight forwarders, international carriers, operators of borders ports facilities based on Minimum Qualification Standards and to ensure that they comply with regulations and Standard Trading Conditions; encourage public/private partnerships in the establishment and operation of inland terminal depots, freight and logistics centers; promote Information and Communication Technology (ICT) applications in the transit transport system; Building Blocks - Progress Domestic transit: There has been encouraging progress. With the help of the World Bank and UNCTAD through the Emergency Customs Modernisation and Trade Facilitation Project, ASYCUDA ++ was implemented in the main Kabul Customs house and rolled out to main border points with Pakistan, bringing substantial improvement to national transit operations. Before Afghanistan can implement international transit procedures in accordance with TIR requirements, its 3
domestic transit operations must be in place at all major border points. This will be the case once ASYCUDA is implemented country-wide. Equally, bonded warehouses and a national insurance scheme are essential for the security of national, regional and international transit transport operations. This has to await the consolidation of the banking sector and the establishment of insurance companies. Private sector development Under the UNCTAD trade facilitation project, TIR reactivation is under way; the freight forwarders are being trained and organised under the aegis of FIATA, and related legislation has been drafted for incorporation into the new transport law. A trade facilitation committee has been established and (AFPRO) and the Afghan Chamber of Commerce is being vetted for the issuance of TIR Carnets. Public/private partnerships are encouraged for constructing and operating transhipment facilities and the traditional role of MoCI in handling transhipment through the northern border, dating back to the Soviet era, is being phased out. To date, MoCI still controls five official border crossings (Thorgundi, Aqina, Hairatan, Shir Khan Bandar and Ay Khanum. An analysis of the transport sector is next on the agenda. The legitimate responsibilities of the various agencies present at the border have been delineated to streamline border management in cooperation with the private sector and eliminate unwarranted fee collection. Bilateral Transit Agreements In the last few years several agreements have been tackled. A revised 1965 transit agreement with Pakistan is ready for negotiations. In 2002, and Agreement on International Transport of Goods and Passengers by Road was signed with Iran. A cooperation agreement with Uzbekistan was signed in 2003 on railway transport, and in 2004 on transit and transport. agreements on traffic in transit were signed with Tajikistan and Iran in 2003. Implementation of these agreements has been halting, however, given the various shortcomings mentioned above relating to border operations, lacking guarantees for customs duties in case of diversion of goods and vehicles, and security factors that prevent foreign operators from entering into Afghan territory. To remedy these shortcomings until regional or multilateral agreements come into existence, the Directorate is prioritising the following elements when renegotiating transit agreements: standards for road vehicles (inspection, roadworthy certificates and third-party insurance schemes) transit guarantees to national customs administrations to cover duties and taxes due visa arrangements for drivers establishment of an authority to monitor the application of the agreement Solutions There are no ready-made solutions to the transit transport problems of a landlocked, least developed country like Afghanistan. The vestiges of obsolete and non-market system need to be removed, infrastructure needs to be built, institutions need to be strengthened, policies formulated and a weak and alienated private sector needs to be brought into the decision 4
making process. International conventions like the TIR, professional organizations like FIATA, or multilateral agreements like the WTO can provide valuable guidance on how to develop customs, transit and transport systems and related laws and regulations. Bilateral agreements can be stepping stones for regional arrangements. But political factors and diversity of interests coupled with inexperience in negotiating among equals remain stumbling blocks to functioning bilateral and regional agreements. Afghanistan is committed to pursuing policies that will make it an effective partner to solving transit transport problems in its region. Its observer status in the WTO since 2004 and its earnest efforts to reactive TIR are testimony to its desire to integrate into the international trading system. 5