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ADB Backing High-Tech Systems in Maldives to Promote Trade

News from Country Offices | 31 May 2019

MANILA, PHILIPPINES (31 May 2019) — The Asian Development Bank (ADB) has approved a financial package totaling $11 million to bring in a single electronic platform in Maldives to improve the speed and efficiency of cross-border control procedures employing the latest in high-tech systems.

 “The project will establish a national single window that can reduce delays and lower costs associated with the clearance of goods, while maintaining the needed controls over fees and duties on imports or exports,” said ADB Senior Economist Mr. Masato Nakane. “The project will improve the trade environment of Maldives and help expand trade with major trading partners such as India and Sri Lanka.”

Like many small island economies, Maldives relies heavily on imports for food, fuel, and other goods, while exports—primarily of fresh fish and fish products—have been on the increase, rising from $50 million in 1995 to $140 million in 2016. But despite progress in recent years, Maldives lags on several trade facilitation indicators. For example, the cost of documentary compliance per export transaction is $300, among the highest in South Asia, where the average is $180. The cost of import transactions is $180, which is almost half the South Asia average but much higher in comparison with Singapore ($40).

The flow of trade in Maldives is hampered by various bottlenecks that cause delays and increase the costs of doing business for traders. These include a reliance on paper-based processing, overlapping and redundant document requirements, lengthy cargo procedures including limited screening capability, and underutilization of information and communications technology (ICT) systems.

Through a presidential decree issued in September 2015, the government formed the National Trade Facilitation Committee to promote international trade, including the introduction of a national single window.

The national single window will lodge standardized information and documents at a single-entry point to fulfil all import- and export-related statutory requirements. It will include a set of labor-saving international trade procedures, enhanced border control, and more readily available data on trade flows.

The project’s estimated total cost is $11.99 million of which the government will provide $1.99 million. The estimated completion date is the end of June 2023. The ADB funding includes a concessional loan of $5 million, a grant from ADB’s Asian Development Fund for $5 million, and $1 million in technical assistance, to be funded in equal parts by the Technical Assistance Special Fund and the High-Level Technology Fund, administered by ADB.

The technical assistance will finalize the legal framework for the national single window for operating the system. It will also pilot test the application of blockchain, a high-tech system with potential to be adopted as the future operating system. The planned blockchain system will enable users to track shipping items and record all related documentation history on its distribution ledger without any chance of falsification.

Under the technical assistance, the project will disseminate the pilot testing results, raise awareness, and build knowledge and capacity of the officials in all agencies related to the national single window system.

In fostering regional cooperation and integration, strengthening governance, and institutional capacity, and promoting the use of advanced technologies, the establishment of the national single window is in line with the operational priorities for trade facilitation under the South Asia Subregional Economic Cooperation (SASEC) program (grouping Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka). It is also aligned with ADB’s Strategy 2030, which promotes the use of innovating technology and delivering integrated solutions.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.