Gérald OllivierWorld Bank

May 2003

Trade and Transport Facilitation: From Diagnostic to Implementation

Our CIS7+2 and Southeast Europe Experience

Removing trade barriers

to international

transport

Reducing long waiting times at borders and

during clearance

Reforming customs and other border agencies by introducing modern MIS, new procedures

and new Human Resource Management, better inter-agency and

cross-border cooperation

Increasing availability of high quality training in logistics, transport, customs

brokerage, telecom and IT

Transport & Telecom reforms:

De-monopolization,Deregulation, Privatization

What is Trade and Transport Facilitation?

Why TTF matters?

Economic growth through SMEs Trade and TTF : growth drivers

In 90s less globalized GDP –1%; more globalized +5% 70% in variation in per capita income explained by

market proximity (Redding/Venable)

Frequently Customs tariffs < transport cost Logistics drive firm/country competitiveness Need for integrated transport infrastructure and

services, in cooperation with border agencies to deliver predictably (day cost 0.8% of value)

Diagnostic Tools

Diagnostic Tools and Recommendations for actions UNECE/UNCTAD Recommendations Trade and Transport Facilitation Toolkit (GFP) WCO Diagnostic Study Process Customs Reform (WCO, World Bank Handbook..) ICC Customs Guidelines, Explanatory Notes, Integrity

toolkit Performance Measurements (TTFSE, WCO, ICC)

-> A multi-disciplinary/cross border approach is needed

TTF Issues in CIS 7+2

9 Countries/similar TTF constraints Distant markets/few commodities High transport costs (up to 50% of goods value)

Small fragmented transport market (not in KZ and TK) Mostly landlocked countries Insufficient market access rights Under-developed logistics/multi-modal transport

Significant informal costs Frequent facilitation payments (up to 50% of transport

cost) Unclear and changing requirements/procedures

-> About $1 billion of potential savings (UN)

0500

100015002000250030003500400045005000

0 5 10 15 20 25 30 35

Cumulative time in days

Cum

ulat

ive

cost

in U

SD

Pre

par

atio

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Inla

nd

tra

nsp

ort

Container ship from Poti to N. Europe

Poti Port and Customs

Inla

nd

tra

nsp

ort

Port 2

Recommended Actions

Prepare National TTF Reform Plan TIR for transit/remove escort of regular cargo Exchange transit/market access rights for transport Harmonize transit fees Harmonize/simplify border procedures (rail/road) Measure performance Strengthen public private dialogue (PRO

Committees/TRACECA TF WG) Publish under a common platform rules/procedures Participate in ECMT multilateral road quota system

(CAR) Share widely this Plan to secure support

(nationally/regionally/donors/public/private)

Diagnostic Lessons

Duplication riskCreating an open coordination platform (potentially through new GFP website)

Wide range of issues mixing local and international experts

Identification of key driving forces (public/private)

Partial data availability Relatively, the easiest part of the TTF process

Caucasus : Formulating Action Plan

Preparation of three policy notes (action plan) Inclusion of these plans into broader WB

products (Trade Diagnostic Studies with comprehensive action plans, SAC)

Proposed Georgian Transit Strategy Active cooperation with other players

(TRACECA..) Performance measurements Creation of Public-Private Committees

Action Plan Formulation: Lessons

Need for coordination to avoid contradictory priorities (national/regional/donors)

Sustained dialogue (workshops/meeting) to tailor solutions to local evolving realities

Building up public-private dialogue takes time and local presence/momentum (TRACECA)

Eager private sector : the need for TTF is there While formulating an implementation plan is

complex, implementation is the difficult part

TTFSE: Implementation Example

Trade and Transport Facilitation in Southeast Europe Vision and political commitment (EU) Massive external support/good coordination 8 countries, US$123 million (TA, IT, Civil works) Measuring results: Manual and database Focused approach: pilot sites Increased transparency (www.ttfse.org) Local/international Training (www.gfp-dli.org) Active PRO Committees involvement Peer pressure (Regional Steering Committee)

Implementation Issues

Resistance to introduce selectivityLack of interagency cooperationExcessive turnover in key staffNeed for comprehensive approach to

corruptionMultisectoral approach a must-> Yet significant results achieved over

two years

Bulgaria, Plovdiv Clearance Times

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Clearance actual time (minutes)Target timeLinear (Clearance actual time (minutes))

BOSNIA AND HERZEGOVINA FED. - GRUDE CLEARANCE TIMES

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Bulgaria, Rousse Entry Time

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Actual Target Linear (Actual)

CROATIA, JANKOMIR CLEARANCE TIMES

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Clearance actual time (minutes)

Target time

Linear (Clearance actual time (minutes))

Country Pilot site WT 2001 WT 2002 Reduction (%)

Final target

Albania Tirana 4.5 hours

1.7 hours

62% 1 hour

Bulgaria Plovdiv 3.7 hours

1.5 hours

60% < 1 hour

Croatia Jankomir 5.3 hours

3.0 hours

43% < 1 hour

Croatia Stara Gradiska

3.3 hours

0.4 hour 88% < 1 hour

Romania Bacau 3.0 hours

1.4 hours

53% 1 hour

Romania Constanta 4.3 hours

3.0 hours

31% 2 hours

  Average: 4.0 hours

1.8 hours

   

Conclusions

Political commitment essentialCoordination around a clear action planUse of existing toolsFocus on manageable, progressive

solutionsGet private sector involvedCooperate globally on training (

www.gfp-dli.org )

Thank You !

Gérald Ollivier (Golliver@worldbank.org)

Resources GFP: http://wbln0018.worldbank.org/twu/gfp.nsfComplete TTFSE progress report available at

www.seerecon.org/ttfseDistance learning: www.gfp-dli.org Europe and Central Asia Transport In the

WB (CIS 7+2 report):http://www.worldbank.org/ECA/Transport