Embed Size (px)
Citation preview
Massimiliano Riva
UNDP Bratislava Regional Center
18 November, 2008
Trade and Human DevelopmentTrade facilitation in Central Asia*
*Based on the findings of Richard Pomfret feasibility study on trade facilitation in Central Asia commissioned by UNDP in 2008
TRADE FACILITATION
… traditionally defined as the simplification and harmonization of international trade procedures, including the activities, practices… required for the movement of goods in international trade…
Poverty reduction and human development focus
Reduce the “costs of exporting and importing goods” for
small and micro entrepreneurs, farmers and associations
of farmers… inclusive access to markets
SOME ASSUMPTIONS
• Recognize the continuity of trade as being not just something that happens at the national border
• The gains from trade arise from specialization in response to price signals and market information
• There are risks involved with specialization, there is a need to sensitize to the mechanisms for risk management and develop appropriate insurance markets
impediments to trade
We can divide impediments to trade into 5 components, from central to local:
1. Trade policy
2. Transport infrastructure
3. Logistic performance
4. Administrative delays and high trade costs
5. Information and institutional constraints on identifying market opportunities
1. TRADE POLICY
Nearly all countries in the region have
fairly liberal external trade policies, and
a high level of trade/GDP Ratio. Kyrgyzstan
is a WTO member and all other countries,
except Turkmenistan, had applied to the WTO
Uncertainty over tariff levels, use of quantitative
restrictions and other barriers has been declining. This
trend is expected to continue in the process of WTO
accession. The proliferation of permissions / different
treatment is still a problem in Central Asia.
Transit arrangements continue to be a serious
problem, but there are commitment to free transit, and
use of TIR is increasing.
1. TRADE POLICY
Afghanistan
Turkmenistan
Russia
Kazakhstan
Tajikistan
Uzbekistan
Pakistan
Kyrgyzstan
Ukraine
Moldova
Turkey
Armenia
Belarus
Georgia
Azerbaijan
Iran
UESCIS
EAEC
ECO
GUAM
1. TRADE POLICY: A SPAGHETTI BOWL of AGREEMENTS …
SPECA
CAREC
SCO
Are they all implemented and respected?
Country Capital Distance (km)
Kazakhstan Astana 2800
Kyrgyzstan Bishkek 2300
Tajikistan Dushanbe 1700
Turkmenistan Ashgabat 1100
Uzbekistan Tashkent 1900
Chad N’djamena 1200
Niger Niamey 900
2. TRANSPORT INFRASTRUCTURE
The distance to the seaports in the Arabian Sea and the
Persian Gulf is between 2,000 - 3,400 km, 3,000 to
the Black Sea, and to the EU about 4,000 km.
The spatial continuity of trade costs
is recognized in the recent adoption
of a corridors approach to trade
facilitation by BOMCA, CAREC and
EurAsEc
Tashkent-Volgograd-Europe corridor
3. LOGISTIC PERFORMANCE
Country LPI Customs Infrastructure InternationalShipments
Logisticcompetence
Tracking & tracing
Domestic logistics costs
Timeliness
Singapore 4.19 3.9 4.27 4.04 4.21 4.25 2.7 4.53
United States 3.84 3.52 4.07 3.58 3.85 4.01 2.2 4.11
Czech Republic 3.13 2.95 3 3.06 3 3.27 3.4 3.56
Russian Federation 2.37 1.94 2.23 2.48 2.46 2.17 2.4 2.94
Azerbaijan 2.29 2.23 2 2.50 2 2.38 2.88 2.63
Kyrgyz Republic 2.35 2.2 2.06 2.35 2.35 2.38 2.8 2.76
Uzbekistan 2.16 1.94 2 2.07 2.15 2.08 2.91 2.73
Kazakhstan 2.12 1.91 1.86 2.1 2.05 2.19 2.81 2.65
Tajikistan 1.93 1.91 2 2 1.9 1.67 2.33 2.11
The Logistics Performance Index is based on a survey of operators (freight forwarders and express carriers), providing feedback on the “friendliness” of the countries where they operate/ trade.
4. Administrative delays (and high trade costs)
SOURCE WB BDI 2009
Documents for export (number)
Time for export (days)
Cost to export
(US$ per container)
Documents for import (number)
Time for import (days)
Cost to import
(US$ per container)
Singapore 4 5 456 4 3 439
United States 4 6 990 5 5 1245
Hong Kong, China 4 6 625 4 5 633
Thailand 4 14 625 3 13 795
Georgia 8 12 1380 7 14 1340
Azerbaijan 9 48 3075 14 56 3420
Kyrgyz Republic 13 64 3000 13 75 3250
Kazakhstan 11 89 3005 13 76 3055
Russian Federation 8 36 2150 13 36 2150
Morocco 7 14 700 10 18 1000
Uzbekistan 7 80 3100 11 104 4600
Tajikistan 10 82 3150 10 83 4550
5. Information and institutional constraints
Information and institutional constraints on producers identifying the best market opportunities and lack ofknowledge of potential and existing value chains; these grassroots problems are especially severe forfarmers or other small and medium-sized enterprises
There are pockets of subsistence where trade has almost
disappeared are in a vicious circle of no trade - low
incomes – no trade. This is not necessarily international
trade, but trade with the next province or market town.
SUMMARY: HIGH TRADE COSTS
… trade is good for growth, and at the local level integrating producers and consumers intowider markets These links are feeble in CentralAsia
• Still weak market mechanisms
• Unnecessary high costs of doing trade
• Uneasy geographical position
Costs include delays and impede the export ofperishable goods (e.g. fruits). Uncertain delivery force buyers to hold inventories and limitthe establishment of supply chains. A day’s delayin transport adds on average 0.8% to the value of amanufactured good, equivalent to a 16% tariff
Behind-the-border trade costs are especially onerous to geographically dispersed sectors of the economy, such as agriculture. Reducing these costs will be pro-poor because it will benefitfarmers and small enterprises
SUMMARY: HIGH TRADE COSTS
SUMMARY: CONCENTRATION AND PRIMARY COMMODITIES
• Central Asian became linked to the global economy, pursuing comparative advantage in a few natural resources
• Trade is below its potential and the returns to integration (in terms of higher living standards) are disappointing
• The suboptimal level of trade and the concentration on primary products are inter-related
high trade costs discourage trade in manufactures orprocessed foods, more than they discourage export ofoil, gas, minerals, cotton or grains.
What can be Done? (1)
Facilitate access to markets - promotion of behindthe-border trade facilitation, including- rural infrastructure and markets- accessible and affordable business services- guarantee fair access to inputs
Promotion of broader trade facilitation efforts- Reduced administrative barriers: simplification and
special exceptions guaranteed to SMEs and individual entrepreneurs
- public administration efficiency (e.g. customs)- regional integration and reduced export costs
Identify the principal obstacles to trade for individual producers and small and medium-sizedenterprises outside the main cities. Encouragingproducers to think beyond their current selling channels
What can be Done? (2)
Mainstream trade facilitation in existing public
Infrastructure and business support programmes and
donor interventions
Set up alliances for business and export
promotion/facilitation at the local level by strengthening
existing institutions (e.g. chambers of commerce, associations,
local authorities etc)
