Gérald Ollivier World Bank May 2003 Trade and Transport Facilitation: From Diagnostic to Implementation Our CIS7+2 and Southeast Europe Experience Gérald Ollivier World Bank May 2003

What is Trade and Transport Facilitation? Reducing long waiting times at borders and during clearance Transport & Telecom reforms: De-monopolization, Deregulation, Privatization Removing trade barriers to international transport What is Trade and Transport Facilitation? 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

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)

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 riskCreating 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 selectivity Lack of interagency cooperation Excessive turnover in key staff Need for comprehensive approach to corruption Multisectoral approach a must -> Yet significant results achieved over two years

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% Stara Gradiska 3.3 hours 0.4 hour 88% Romania Bacau 1.4 hours 53% Constanta 4.3 hours 31% 2 hours   Average: 4.0 hours 1.8 hours

Conclusions Political commitment essential Coordination around a clear action plan Use of existing tools Focus on manageable, progressive solutions Get private sector involved Cooperate globally on training (www.gfp-dli.org )

Thank You ! Gérald Ollivier (Golliver@worldbank.org) Resources GFP: http://wbln0018.worldbank.org/twu/gfp.nsf Complete TTFSE progress report available at www.seerecon.org/ttfse Distance learning: www.gfp-dli.org Europe and Central Asia Transport In the WB (CIS 7+2 report): http://www.worldbank.org/ECA/Transport