Transport and Trade Linkages:Central Asia & Eastern Europe

Henry KeraliSenior Transport Specialist The World Bank

Presentation Outline

Central Asia Transport & TradeStatus reviewMain trade corridors & linkagesTrade & transport trends Impediments & suggested reforms

Transport & Trade Facilitation in Southeast Europe (TTFSE)

Current issues, project objectives & key actionsProject components & achievementsRecommendations & Scaling-up

Exports from Central Asia

To: From:

Russia – Asia /

Europe

Europe – West and

South

Asia – Southeast

and Fareast

North America

China

Kazakhstan 44,822,516 8,211,831 574,525 14,191,597 4,113,412

Kyrgyzstan 111,648 7,006 877 530 90,675

Tajikistan Not specified; total export figure is: 736,119

Turkmenistan 12,309 123,062 4,207 5,214 27,470

Uzbekistan 845,247 532,729 83,882 27,316 46,227

Source: TRACECA (Tons/Year) 2001

Imports to Central Asia

Source: TRACECA (Tons/Year) 2001

From: To:

Russia – Asia /

Europe

Europe – West and

South

Asia – Southeast

and Fareast

North America

China

Kazakhstan 9,848,318 290,906 74,756 280,874 262,702

Kyrgyzstan 251,825 20,666 6,312 111,338 61,913

Tajikistan Not specified, total import figure is: 766,180

Turkmenistan 235,633 68 5,209 0 8,000

Uzbekistan 563,866 137,623 71,967 152,217 84,205

Main International Corridors

Southern linkages for Central Asia

Central Asia Corridor Performance

Rail Road Corridors Km Days USD Km Days USD North – Russia (Almaty-Moscow) 4,050 17 1,100 4,391 10 3,350 West – Caucasus (Almaty – Baku) 3,934 18 1,800 4,090 13 5,300 South – Iran (Almaty – Tehran) 3,250 16 1,200 3,120 16 4,650 East – China (Almaty – Urumqi) 1,338 8 1,016 1,330 5 2,150

Rail Road Corridors km/$ $/km km/day km/$ $/km km/day North – Russia (Almaty-Moscow) 3.7 0.26 238.2 1.3 0.76 439.1 West – Caucasus (Almaty – Baku) 2.2 0.46 218.5 0.8 1.30 314.6 South – Iran (Almaty – Tehran) 2.7 0.37 203.1 0.7 1.49 195.0 East – China (Almaty – Urumqi) 1.3 0.76 167.3 0.5 1.90 226.0

Impediments to Trade & Transport

High transportation and handling costs Poor transport infrastructure and transport performanceTrade barriers of neighbouring countries Long and costly customs procedures and other inspectionsLack of coordination between countries in the regionImpediments amount to between 10 – 15% for roads and 2 – 10% for rail Transportation costs amount up to 50%

Suggested Reforms

Need for regional trade and transport policy Diversification of the transport industry including forwarding, handling, containerization, etc Regional harmonization and implementation of customs procedures Promotion of trade and transport standards Common and transparent transit fees Development of rail shuttle services Implementation of international freight handling standards, e.g. TIR, ASYCUDA, etc.

Trade and Transport Facilitation in Southeast Europe(TTFSE)

World Bank supported project

The Issues

The high cost and uncertainties of trade and transport in Southeast Europe are major constraints on economic recovery and development in the region Complicated, opaque and non-standardized border procedures affect the business environment and deter foreign investment (the Paper Curtain) Countries concerned with high level of corruption, smuggling, organized crimeCustoms administrations do not have aligned legislation and procedures with EU standards

Project Objectives

Reduce non-tariff costs to trade and transportReduce smuggling and corruption at border crossings

Actions (1)

Getting donors on board to complement / coordinate / provide assistanceRegional approach/mechanisms:

Regional Forum: Steering Committee Public – Private Partnerships (PPP) Training programs for transport operators, freight-forwarders, importers, exporters TTFSE website Survey of users

Actions (2)

Focus on Customs procedural reformsBorder Inter-agency awareness and cooperation Pilot approach: 27 selected border crossing points and in-land stationsNational Coordinator Performance monitoring: overall Customs and pilot indicators Local Project Teams

Country & Regional Program

Regional Investment Program: US$120 m

WB $78 million US Government (grant) $13 million; Others: France, Austria

Each project was designed to be country specific, but supported the development objectives by the selection of elements under similar components

Common Components

Supporting customs reformStrengthening mechanisms of interaction and cooperation between private and public parties at regional, national, and local levelsDisseminating information and providing training to the private sector

Achievements in 2 ½ years …

Significant reduction of waiting time at the border and inland pilot points (50% and more) leading to US$8million savings annuallyImproved dialogue among Customs administrations through regional consultation and information sharing (8 RSC meetings)“Institutional awareness”: the facilitation role of border agencies vs. revenue collection & control classic rolesTransparent and public Customs performance monitoring system in place

Achievements in 2 ½ years ..

User participation in the evaluation of border agencies’ performance A collaborative culture of partnership between the public and the private sectorsCertified learning opportunities in road transport operations (85 locations and on-line)Detailed information available to the public at: www.TTFSE.org

Achievements in 2 ½ years.

Revenue collected by Customs doubled through risk management and selectivity approachHigher than estimated trade volumes increase (e.g almost doubled in Romania)EC – WB Policy Notes from lessons learned

Scaling-up TTF

REPLICATE the program to other/all borders, and cross-border projects in SEEEXPAND the approach and methods to railways, inland water-ways, ports, airportsSTREAMLINE international transport documentation & linkagesREPLICATE the program to other regions, e.g. Caucasus, Central Asia, South Asia, East Asia, etc.