Building competitive trade logistics
Global trade could increase by trillions of dollars if transactions costs in developing countries are reduced to OECD levels. But what’s the most effective ways to achieve such reductions?
A group of high-level policy makers, academics, and World Bank Group staff met in Washington last week to strategize as part of a conference organized by the FIAS' Trade Logistics Advisory Program. Presenters discussed case studies from twelve developing and industrialized economies and state-of–the-art approaches to building efficient trade logistics services. Some governments are making progress in simplifying their trade-related regulatory procedures. Pakistan, for example, managed to reduce the number of trade transactions from 26 clearance steps, 34 signatures, and 64 verifications to one declaration form. And it increased the proportion of cargo that is cleared from in less than one day from 4% to 70%.
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Did the group determine that Pakistan has been the most successful at building efficient trade logistics services, or are there others doing just as well?
Posted by: jsavage | May 16, 2008 4:34:58 PM
Interesting stuff. Reminds me of Hernado de Soto's work on barriers to opening a business or owning a home in many developing countries.
Posted by: Brendan | May 17, 2008 6:19:45 AM
Some of the lessons shared and views expressed during the conference challenged widely held views about reform. For example, in remarks on prioritizing reforms, John Brockwell of JP Morgen said that if governments had to choose between reducing the time it takes to clear goods at the border and reducing the variability in clearance times, they should target variability arguing that it is inconsistenc "that really damage the company.”
Similalry, in discussing country experience in automating border control procedures, presenters from Senegal, Guatemala and Singapore agreed that technology was the easiest part of the reform process. The toughest challenges they faced usually stemmed from institutional and human resource aspects of reform.
Posted by: Mirvat Sewadeh | May 19, 2008 11:50:20 AM
Regarding the question on Pakistan, Pakistan wasn't necessarily the most successful. It was highlighted as an example. Other cases that were discussed at the conference showed that many countries have managed to achieve impressive reductions in the time and costs to trade. For example, in Singapore, about 99% of all trade declarations are processed within 5 minutes, thanks to the Single Window system which was implemented in the 1990s and has since become a model for border control automation. Senegal and Guatemala were also able to reduce trade transaction time after automating their border control systems. Still, Pakistan's reforms are noteworthy because of the country's size and its large volume of trade.
Posted by: Mirvat Sewadeh | May 20, 2008 10:12:35 AM