CloseUp
From landlocked to landlinked, with transport reform
Meeting the landlocked challenge
Of
landlocked countries...
are developing countries...
...with only
share in global trade
Investing in ‘connected services’ can change this. Countries that invest in ICT, transport and logistics, business and professional services and financial services leapfrog ahead in trade. For landlocked countries, transport and logistics is a top priority.
Why invest in transport and logistics?
Landlocked developing countries have a logistics performance index that is generally
lower than the global average.
Major supply chain disruptions have hit hard in recent years. this is likely to happen again. Major supply chain disruptions are likely every
years, according to McKinsey.
More than
of exports depend on commodities in 80% of landlocked developing countries.
The combination of declining demand and disrupted logistics has led to a drop in some commodity prices, lower foreign exchange earnings and less scope for governments to source essential foods and medicines and provide social safety nets.
While digital transformation offers new opportunities, such as through e-commerce marketplaces, landlocked developing they’re limited in their ability to track and trace consignments, or move goods quickly through transport corridors and border controls.
Landlinked: Where to focus?
Reform border administration
Go electronic
Boost transport corridors
Here are suggestions on how to do that.
Share border information online, by region. The first step for companies in trade is often across borders, due to cultural similarities and logistics. Quick and transparent access to trade related information is essential.
Example: The Central Asia Gateway for Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan was launched in May 2023. Created by the International Trade Centre, with financial support of the European Union, it offers free information on export, import and transit formalities for 277 trade flows of the most traded goods and services among these countries. There are already more than 160,000 users.
In Africa, similar platforms in Burkina Faso, Burundi, Mali, Rwanda and Uganda feature 246 trade flows and help more than 335,000 users to trade across borders.
There are already more than
users
Implement the World Trade Organization’s Trade Facilitation Agreement. It boosted trade, especially in agricultural goods, by $231 billion in 2017–19.
Example: Trade facilitation reforms for five Central Asian countries can cut export times by an average of 45%. These are listed in the Central Asia Gateway and reforms are under way.
Go digital, cut traffic, reduce pollution. Digital, paperless procedures make trade faster, cheaper, and safer. Reduce emissions up to 65% by avoiding peak traffic.
Electronic logistics solutions can stagger arrival times of trucks at border checkpoints. In Kyrgyzstan and Uzbekistan, the International Trade Centre is putting this into practice with technical specifications for an electronic queue management system, now being piloted on selected border posts.
Introduce traffic incentives to move outside of peak hours. Following ITC recommendations, slashed surcharges on customs fees over weekends generated $1 million in annual savings for Tajik businesses in 2022.
Shift trade architecture to online formats. Digital customs declarations, e-licensing, electronic certificates of origin are examples. Single windows are also at the core of fast and green trade.
Examples: Kyrgyzstan – a Single Window platform supports digital clearance and e-accreditations. Uzbekistan – lowered its export time threefold thanks to a new risk management system.
Digital reforms support the United Nations Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, which has the potential to lower transaction costs by 10–30%, and significantly reduce carbon dioxide emissions.
Coordinate reforms across borders
Disjointed national trade facilitation and logistics reforms along trade routes will not bridge the connectivity gap. Trade corridor reforms that focus on specific trade flows will reduce transit times, lower transport costs, and improve the flow of goods across borders.
These reforms also promote regional integration and attract investment, so that landlocked developing countries can boost trade.
Peer-to-peer learning initiatives, joint study tours and multiple coordination meetings help coordinate reforms. ITC’s support in this area led countries in the Central Asian Gateway to discuss Single Windows at the regional level, and sign a cooperation agreement among Associations of Customs Brokers. In an example of another outcome, in Kyrgyzstan and Uzbekistan, they are harmonizing logistics at border checkpoints of key intraregional trade corridors.
Finance smart, sustainable reforms
Clear communication on affordable and accessible financing options for landlocked developing countries is important. Trade finance facilities, credit guarantee schemes, and capacity-building programmes enhance financial literacy and enable businesses in landlocked countries to access finance.
Modernizing payment systems, promoting digital banking solutions and strengthening the regulatory framework for cross-border financial transactions is key.
Green infrastructure financing and other grants from development agencies and international assistance are an important source of funding.
The European Union Global Gateway is mobilizing up to €300 billion of investments between 2021 and 2027 to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world. This is an important mechanism for landlocked countries to consider for development projects.
Public-private partnerships are instrumental. According to the World Bank, public-private partnerships accounted for some 40% of infrastructure investment in emerging markets and developing economies in 2019. These partnerships attract private sector capital, enabling governments to bridge financing gaps and enhance trade infrastructure.
Include gender-responsive reforms
It’s a great economic opportunity to include women in trade.
But women in business have many challenges:
in landlocked Central Asian countries report difficulties in accessing and understanding trade-related information.
of women emphasize that training government officials can improve their cross-border experience.
ITC trained more than 600 border officials across all five Central Asian landlocked countries to create gender-responsive border operations. Within a year, 60% of them adopted gender-responsive changes.
One-on-one coaching sessions in Central Asia and Afghanistan built the capacity of 300 small firms – including 110 led by women – to export and to comply with international trade requirements. More than 350 women in Central Asia were trained on trade procedures, to handle negotiations with partners and address complicated border situations. This has made trade more inclusive for women and small businesses.
Let’s ensure a level-playing field for women, youth and vulnerable communities – migrants and refugees – to leverage trade and secure a decent income, employment, fair working conditions, and a voice in shaping their economic futures.
*This Close Up feature on landlocked developing countries was prepared with ITC's Trade Facilitation section, on the occasion of business talks with landlocked countries at the 2023 World Export Development Forum.*
ABOUT US
The International Trade Centre is the joint agency of the World Trade Organization and the United Nations. We promote trade-led growth in developing countries.
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Copyright: International Trade Center, unless otherwise indicated.
Created by the International Trade Centre and financed by the EU it offers free information on export, import and transit formalities for 277 trade flows of the most traded goods and services among these countries.
Projects featured in this publication are implemented with financial support of the European Union.
ABOUT US
The International Trade Centre is the joint agency of the World Trade Organization and the United Nations. We promote trade-led growth in developing countries.
SHARE THIS PAGE