The proposed TA will help address nonphysical barriers to the efficient cross-border movement of goods and people in the CAREC region, which relate to legal, regulatory, administrative, documentary, organizational, and other hindrances that adversely affect the efficiency, speed, and cost of cross-border transport operations. This initiative is in line with the CAREC TTF Strategy and the operational priorities of transport and trade facilitation under CAREC 2020 (see item 11 above). It would help maximize the benefits of improved regional transport infrastructure being developed along the CAREC corridors.
The proposed TA, which is the first phase of a planned series of TAs to help promote cross-border transport in the CAREC region, will help (i) identify key nonphysical barriers along priority CAREC transport corridors, (ii) formulate feasible approaches for addressing these key nonphysical barriers, and (iii) carry out important initial activities based on the agreed approaches. Subsequent phases will build on the results of the first phase, and, subject to satisfactory implementation of the first phase, will support other key activities in line with the agreed approaches, and provide similar support for other priority CAREC transport corridors.
The proposed TA will complement earlier ADB technical assistance to CAREC countries on transport facilitation, trade facilitation and customs modernization including: (i) the Regional Trade Facilitation and Cooperation Program (2002-2006) in KGZ and TAJ through Loans 1926-KGZ and 1927-TAJ ($15 million and $10 million, respectively); (ii) Regional Customs Modernization and Infrastructure Development Project (2005-present) KGZ and TAJ, through Loan 2113-KGZ and Loan 2114-TAJ ($7.5 million and $10.7 million, respectively). ; (iii) TA 6437-REG: Integrated Trade Facilitation Support for Central Asia Regional Economic Cooperation (2007-present; $3.0 million); (iv) TA 6203-REG: Regional Trade Facilitation and Customs Cooperation (Phase II, 2004-2009, $900,000); (v) TA 7775-REG: Preparing the CAREC Transport and Trade Facilitation Project: Border Crossing Point Improvement and Single Window Development (2011-2012; $2 million); and (vi) TA 6223-REG: Formulating and Implementing an Intergovernmental Agreement of the Shanghai Cooperation Organization Member States on Facilitation of International Road Transport (2005-2008; $500,000).
CAREC countries have been receiving assistance in transport facilitation and trade facilitation from development partners, including the Border Management Programme in Central Asia (BOMCA, financed by the European Commission, and executed by the United Nations Development Programme), the Organization for Security and Co-operation in Europe (OSCE), and the United States.
|Project Rationale and Linkage to Country/Regional Strategy
Better connectivity and progress toward energy efficiency, security and trade have always been key intended results of the CAREC Program. Improved transport linkages cuts the cost of doing business, creates good conditions for larger trade flows, brings people closer to markets and social services, and ultimately becomes a means to accelerate economic growth. This was underscored in the CAREC Transport and Trade Facilitation (TTF) Strategy endorsed by the CAREC member countries at the Sixth Ministerial Conference in Dushanbe, Tajikistan in 2007, with its action plan approved at the Seventh Ministerial Conference in Baku, Azerbaijan in 2008. An assessment of transport and trade indicators along CAREC corridors conducted from April 2009 to March 2010 revealed that the average time to clear at a border crossing point (BCP) was 21.3 hours; average cost at a BCP was $398.60; average speed for a 20-ton truck or twenty-foot equivalent unit (TEU) container to travel 500 kilometers (km) along a CAREC corridor section was 30 kilometers per hour (kph) without delay and 16 kph with delay; and the average cost to travel along a corridor section was $1,166.
Transport facilitation pursues a more efficient movement through borders by removing nonphysical barriers, which relate to legal, regulatory, administrative, documentary, organizational, and other hindrances that adversely affect the efficiency, speed, and cost of cross-border transport operations. These barriers needlessly increase transport costs, and consequently the price of raw materials and commodities. In extreme cases, these barriers prohibit cross-border transport of goods, people and services completely. The new 10-year strategic framework for CAREC (CAREC 2020), which was endorsed by the member countries in November 2011, emphasizes the importance of transport and trade facilitation in the achievement of its strategic objectives of expanded trade and improved competitiveness.
There are many cross-border transport facilitation agreements/arrangements involving CAREC member countries designed to mitigate the nonphysical barriers to the smooth transnational movement of goods and people between and among them. These include international transport facilitation conventions (to which many CAREC countries are contracting parties), plurilateral agreements (e.g., agreements under the Transport Corridor Europe Caucasus Asia [TRACECA] Program, Economic Cooperation Organization [ECO], Shanghai Cooperation Organization [SCO]), and bilateral agreements. Progress in finalizing and implementing these arrangements has been varied and generally slow. Considering CAREC's goal of establishing competitive transport corridors in the region, and given the slow progress on many of the cross-border transport agreements/arrangements, CAREC senior officials agreed at their meeting in Beijing in September 2011 that a pragmatic and step-by-step approach to implementing transport facilitation agreements for CAREC corridors could be considered.