Jan.Hoffmann@UNCTAD.org Lahore, December 2013

Transport Connectivity for Landlocked Countries as a tool of development

2 brief comments upfront1) Bali2) UNCTAD’s Review of Maritime

Transport 2013 just released: – How long to implement Bali? – Which 4 countries register more than

50% of the world fleet? – How many tons of seaborne trade? – Who are the South Asian leaders in

shipping connectivity?– Which 2 countries build more than 2/3 of all

ships? – … see: http://unctad.org/rmt

• Transport

Connectivity

• for Landlocked

Countries

• as a tool of

development

More trade-> More transport

supply-> More

competition-> lower freights-> More trade

More income to finance trade facilitation

-> Better trade facilitation-> More Trade-> More income to finance

trade facilitation

Better services-> More trade-> More income to

finance infrastructure-> Better services

• Transport

Connectivity

• for Landlocked

Countries

• as a tool of

development

Sources for maps: http://www.ischool.drexel.edu/gissa/transport.html, http://www.mscgva.ch, Transport for London

Transport analysis:• Past: Port-to-port• Today: Door-to-door• Future: Network

Transport networks

Introducing containerizationleads to more trade

Bernhofen et al, 2013 The Economist 18 May 2013

Higher Container Shipping Connectivity leads to lower trade costs

(Arvis et al, 2013)

Better connectivity leads to lower freight rates

y = 1814.9e-0.0671x

R2 = 0.4348

0

500

1'000

1'500

2'000

2'500

3'000

3'500

0 2 4 6 8 10 12 14 16 18 20

Number of Carriers providing direct services

Frei

ght r

ate

(Wilmsmeier and Hoffmann, 2008)

… more so than distance

y = 0.6206x + 1019.9

R2 = 0.2058

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0 500 1,000 1,500 2,000 2,500

Distance

Frei

ght r

ate

(Wilmsmeier and Hoffmann, 2008)

Liner Shipping Connectivity

Trends

http://stats.unctad.org/LSCI

• Transport

Connectivity

• for Landlocked

Countries

• as a tool of

development

Trade and Transport Facilitation is needed not to so much to cover “distance”, but to overcome border crossings.

The number of RTAs with trade facilitation provisions has grown six-fold in the last decade. Among new RTAs, more than 80% include Customs and other trade facilitation measures.

Interest of transit countries

• Transit traffic requires provision of services. Opportunities for investment in warehouses, vehicles and ports.

• Transit generates induced economic activities: restaurants & hotels, repairs & workshops, trade of petroleum products

• Economies of scale and improved connectivity reduce costs of the transit country’s own trade

Bali TF agreement: on transit

• Article 11 Freedom of Transit• Article 1 (publication)

Article 2 (consultations)Article 6 (penalty prov.) Article 7.7 (AEO)Article 8 (border agency cooperation)Article 10 (formalities)Also cover transit!

Special chapter in UNCTAD’s 2013Review of Maritime Transport

Assurance of uninterrupted transit: Consignments between trusted transit operator traders through trusted transit operator logistics providers should not be interrupted by any agency for any reason except in the case of clear evidence of a threat or violation. Assurance of uninterrupted transit should be adopted as a basic feature of all trusted transit operator programmes.

• Transport

Connectivity

• for Landlocked

Countries

• as a tool of

development

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade, • save time and frustrations, • improve governance, • empower women entrepreneurs, • strengthen regional integration, • modernize public administrations, • foster IT capacities, and• increase revenue collection.

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade • save time and frustrations

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade• save time and frustrations, • improve governance

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade• save time and frustrations• improve governance• empower women entrepreneurs

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade• save time and frustrations• improve governance• empower women entrepreneurs• strengthen regional integration

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade • save time and frustrations• improve governance• empower women entrepreneurs• strengthen regional integration• modernize public administrations

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade • save time and frustrations • improve governance • empower women entrepreneurs • strengthen regional integration • modernize public administrations • foster IT capacities

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade • save time and frustrations • improve governance • empower women entrepreneurs • strengthen regional integration • modernize public administrations • foster IT capacities• Improve security

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade, • save time and frustrations, • improve governance,

• empower women entrepreneurs, • strengthen regional integration, • modernize public administrations, • foster IT capacities, and• increase revenue collection.

Beyond trade policies… TTF is good for development

Trade and Transport Facilitation reforms help to …• formalize trade, • save time and frustrations, • improve governance, • empower women entrepreneurs, • strengthen regional integration, • modernize public administrations, • foster IT capacities, • Improve security, and• increase revenue collection.

The introduction of ICTs by Customs encourages SMEs to also connect to the internet

Developing ICTs

Developing Transit

A framework for bank guarantees for transit trade helps improve the financial system

Developing trust Increased transparency is good for

good governance in general

Developing Single Windows

A single window experience for trade may help to introduce single windows elsewhere

Implementation is more difficult for LDCs

More trade-> More transport

supply-> More

competition-> lower freights-> More trade

More income to finance trade facilitation

-> Better trade facilitation-> More Trade-> More income to finance

trade facilitation

Better services-> More trade-> More income to

finance infrastructure-> Better services

• Transport Connectivity

• for Landlocked Countries

• as a tool of development

Lower Trade Costs-> More trade-> Economies of scale-> Lower Trade Costs

… for both: landlocked and transit countries

Jan.Hoffmann@UNCTAD.org Lahore, December 2013

Transport Connectivity for Landlocked Countries as a tool of development

Thank you