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WORLD BANK GROUP
UNESCAP Regional Forum and Chief Executives Meeting
June 23 –24, 2011
LOGISTICS PERFORMANCE INDEX CONNECTING TO COMPETE 2010
Monica Alina MustraTrade Facilitation and Logistics Specialist
INTERNATIONAL TRADE DEPARTMENT
6/29/2011 2
Early Bank Projects
hydroelectric in Chile
bullet train in Japan
Where We Work
Fiscal Year HighlightsFiscal Year Highlights
4
THE WORLD BANK ANNUAL REPORT 2010
Focus Areas for the World Bank
Border management
Improvement in border management in a broad sense: integration of customs, product standards, tax, rules of origin, etc.
TradeInfrastructure
Improvement in the management of key trade related infrastructure, especially gateways and multimodal facilities
Logisticsservices
Improvement of the quality/professionalism of private logistics services, through technical/economic regulation and capacity building
Regional Regional trade facilitation including transit systems
Indicators Performance monitoring and indicators: e.g., data on time, cost,and reliability along corridors
Action plan Development and implementation of comprehensive action plan addressing all of the above
Partnerships
Strategic Strategic AlliancesAlliances
UN
WCO
WTO
WEF
FIATA
GEA
MNCs
ACADEMIA
Regional Banks
A Changing TF Agenda
Cross-cutting issues:
• Making transit work
• Collaborative border management
Quality and efficiency of service providers
•Freight forwarders• Customs brokers• Truckers
Trade Related infrastructure
• Roads• Ports• Railways
Old agenda
New agenda
Customs reform and modernization
• Fiscal focus• IT orientation
Both the old and new agendas needed Both the old and new agendas needed 7
A Changing TF Agenda
Historically trade facilitation reform focused on Customs reform and infrastructure development – Reflected in donor supportCustoms reform increasingly seen as only one element of the problem – Customs only responsible for a third of delays New data available – time, cost and reliability all important for competitivenessIncreased focus on performance measurementDriving a new and more comprehensive agenda Much demand for Single Window, One Stop Border Posts, and wider trade and transport logistics improvementRegional integration high on the new agenda
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Agenda
3. Want to learn more?3. Want to learn more?
1. LPI 20101. LPI 2010
2. LPI Data – EAP countries2. LPI Data – EAP countries
Data.worldbank.org
1. LPI 20101. LPI 2010
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Key messages
• Trade logistics is an important element of national competitiveness
• A country’s performance is only as good as its weakest link
• The LPI dataset can be used to identify key bottlenecks in your own country and therefore
• Help frame your needs and priorities in the trade facilitation and logistics area reform
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LPI 2010
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www.worldbank.org/lpi
Broad indication of where problems areAwareness raising to stimulate public-private dialogue on priorities for reformTrigger fresh impetus for reforms Monitor progress over time
Most comprehensive data on country performance
Built on:
more than 5,000 country assessments by over 1000 logistics professionals worldwide
Primary data gathered for 155 countries
Partnership with the private sector
Role of LPI
Most comprehensive data on country performanceBroad indication of where problems areAwareness raising to stimulate public-private dialogue on priorities for reformTrigger fresh impetus for reforms Monitor progress over time
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Logistics broadly defined matters most
Effects of convergence by low income countries to middle income averageIndicator/policy area Increase in trade
(%)Logistics Performance Index 15.2
Doing Business, cost of trading 7.4
Tariffs for low income countries reduced to 5%
5.7
All trade barriers for low income countries reduced to 10%
8.4
Note: LPI = Logistics Performance Index; Tariffs = TTRI = Trade Restrictiveness Index; All barriers = OTRI = Overall Trade Restrictiveness Index.
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LPI Questionnaire Structure
Generalmodule
InternationalQualitative
Performance
Anonymous, web-based questionnaire, in 5 languages with input from logistics professionals
DomesticQualitative
Performance
DomesticQuantitativePerformance
International LPI Domestic LPIEvaluate 8 overseas markets Evaluate Country of work
Questionnaire available from worldbank.org/lpi
Country A
Country 1
Country 2
Country 4
Country 3
Country 5
Country 6
Country 8
Country 7
How it works?
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International LPIInternational LPI Evaluate 8 overseas markets
Efficiency of the clearance processQuality of trade and transport infrastructureEase of arranging competitively priced shipmentsLogistics competence and quality of logistics servicesAbility to track and trace consignmentsTimeliness of shipment delivery
The LPI measures six dimensions of country performance:
What are efficient logistics?
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LPI 2010 – performance varies around the world
Countries are improving around the worldNo dataLogistics friendly
Logistics unfriendlyPartial performersConsistent performers
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Customs ahead of other border agencies
0%
10%
20%
30%
40%
50%
60%
70%
Logistics friendly Consistent performers
Partial performers Logistics unfriendly
Customs Other border agencies
Percentage of respondents indicating the quality and competence of customs and other border agencies is high or very high
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More than income: the “logistics gap”
With the right investment and policies, lower income countries can also be high performers
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Overperformers and underperformers
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Country LPI Rank
South Africa 28Malaysia 29Poland 30Lebanon 33Latvia 37Turkey 39Brazil 41Lithuania 45Argentina 48Chile 49
TOP 10 COUNTRIESLOWER MIDDLE INCOME
Country LPI Rank
China 27Thailand 35Philippines 44India 47Tunisia 61Honduras 70Ecuador 71Indonesia 75Paraguay 76Syrian Arab Republic 80
TOP 10 COUNTRIESLOW INCOME
Country LPI Rank
Vietnam 53Senegal 58Uganda 66Uzbekistan 68Benin 69Bangladesh 79Congo, Dem. Rep. 85Madagascar 88Kyrgyz Republic 91Tanzania 95
TOP 10 COUNTRIESUPPER MIDDLE INCOME
LPI 2010 Ranks
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25 countries achieved significant improvement in LPI
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25 countries achieved significant improvement in LPI
LICs: Afghanistan, Chad, Haiti, Myanmar, Niger, Tajikistan, Tanzania, and UzbekistanLMICs: China, Djibouti, Honduras, Philippines, and SyriaUMICs: Brazil, Colombia, Costa Rica, Dominican Republic, Kazakhstan, Lebanon, Mexico, Poland, Russian Federation, and UruguayHICs: Saudi Arabia and the Czech Republic
Source: Logistics performance survey data, 2010 and 2007
25 countries improved between 2007 and 2010
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LPI DataLPI 2010 LPI 2007
Rank Score % of highest performer Rank Score % of highest
performer
Singapore 2 4.09 99.2 1 4.19 100.0
Japan 7 3.97 95.2 6 4.02 94.8Korea, Rep. 23 3.64 84.7 25 3.52 79.0
China 27 3.49 79.9 30 3.32 72.8
Malaysia 29 3.44 78.4 27 3.48 77.7
Thailand 35 3.29 73.6 31 3.31 72.5
Philippines 44 3.14 68.8 65 2.69 52.9
Vietnam 53 2.96 63.1 53 2.89 59.2
Indonesia 75 2.76 56.5 43 3.01 63.0
Lao PDR 118 2.46 47.0 117 2.25 39.3
Cambodia 129 2.37 44.0 81 2.50 47.0
Myanmar 133 2.33 42.7 147 1.86 27.0
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% of the highest performer
LPI 2010
Highest performer Germany 100%
Lowest performer Somalia 11%
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East Asia & Pacific
APEC & ASEAN
ASEAN Average
32
6 LPI International Components
33
Key Policy Implications
Expand the traditional reform agenda beyond customs reform and infrastructure developmentImprove the quality of logistics services and increase border agency coordination Embark on comprehensive reform—processes, services, and infrastructure—with broad public and private supportTransit corridors: regional coordination and cooperation is vital for landlocked developing countriesInfrastructure remains high on the agendaTailor reform to each country’s circumstances
34
35
Domestic LPIDomestic LPI Evaluate Country of work
Logistics environmentTrade infrastructureService providers and Processes
Core logistics processes Customs and border management institutionsBorder procedures
Time and cost data for import and export transactions
Domestic LPI measures
36
In-country logistics: main findings
Broadly positive trends in customs, ICTs, and private logistics servicesOther border agencies often lag behind customs in terms of efficiencyImporters in low performing countries face nearly twice as many border agencies and documents as in high performing countriesUncertainty of clearance procedures and quality problems impact supply chain reliability and performance
Inefficient regulation of core logistics services increases prices and reduces qualityPhysical infrastructure remains a major constraint in many countries
37
Positive trends in logistics performance since 2005
38
Clearance Times
Infrastructure quality
40
Services Quality
41
Efficiency of processes
42
Time and Cost Indicators
43
Lead Times
APEC ASEAN High income
Export
Best lead time 1.9 2 1.7
Median lead time 2.8 2.8 2.7
Cost $849 $651 $980
Import
Best lead time 1.9 6.9 2.3
Median lead time 2.9 8.3 3.3
Cost $884 $858 $1,024
Typology of countries
LPI 2010 Products
Connecting to Compete 2010World Bank website
Logistics Performance Index 2010: The Asia-Pacific Region
Electronic copies availableLogistics Performance Index 2010:
IndonesiaWorld Bank website
Additional Contacts
Web site with data www.worldbank.org/lpiAvailability of Trade Department for regional presentations, and discussions.For further questions, please contact main authors:
Jean Francois Arvis; [email protected] Alina Mustra; [email protected]
48
3. Want to learn more?3. Want to learn more?
Contact Us
www.worldbank.org/tradewww.worldbank.org/tradefacilitationwww.worldbank.org/tradelogisticswww.worldbank.org/lpiwww.worldbank.org/tradestrategy
Washington Office1818 H Street NW
Washington DC 20433
Contact: [email protected]
The World Bank GroupInternational Trade Department
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Additional slides
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Forthcoming
Flagship products Transit and Land-Locked Developing Countries
New knowledge and approaches to deal with the critically important area of transit
New TTFA toolkitHelps assess the inefficiencies of supply chains and identify competitiveness constraints
Corridor Management Toolkit: Trade and Transit Facilitation on Trade Corridors Border Management Modernization: A Practical Guide for Reformers
New knowledge products Trade Facilitation in Lagging Regions Logistics servicesLogistics costs and competitiveness (assessments at country level)Performance Metrics (e.g. port facilitation performance)
51
TTFA 2010
52A toolkit for policy makers and remedial action
Our next contribution ….
54
Upcoming:
Corridor Management
toolkit
©This page is promotional material
55
Respondents Demographics
Nearly 1,000 logistics professionals from international logistics companies in 130 countries55 percent of the respondents are located in middle-income (45%) and low-income (10%) countriesLarge corporations account for 45% of the responses: multinational freight forwarders (34%) and global express carriers (11%). Survey responses come from senior executives (35%), area or country managers (25%) and department managers (24%).The majority are located in country branch offices (39%) or corporate or regional headquarters (36%).54% of the respondents typically provide all or most logistics services. Others provide full-container or full-trailer load transport (15%) or customer-tailored logistics solutions (12%).50% typically deal with multimodal transport, maritime (19%) or air (12%). Half of respondents usually oversee both domestic and int’l operations.Almost 40% works in most of the regions. Others are mainly involved with operations in Europe (21%), Asia (19%) and the Americas (13%).
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Complementarities LPI/DB
LPI DBSource of data As many respondents as
possible Few by country
Concept Performance outcomes Analytic breakdown in component procedures
Questionnaire Short online Detailed
Significance Several indices of performance
Metric of red tape applicable to trade operations (time export, import
Comparisons and overlaps• Limited correlation (at least with stringent tests: rank, partial) of main indicators (LPI
and DB time X/M) • Different concepts of time to import and export, with huge discrepancies 57