According to the IFC/ World Bank Trading
on Time study:
Each day of delay reduces a country’s
export volumes by 1 percent
Washington D.C, 26 January 2006
—Delaying exports hurts the economies of developing countries, according
to a new study from the World Bank and the International Finance Corporation
(IFC) entitled Trading
on Time. An export
container requires 116 days to move from the factory or farm in Bangui
(Central African Republic) to the nearest port and to fulfill all the customs,
administrative, and port requirements to load the cargo onto a ship. Similar
delays affect many other countries: it takes 71 days to do so from Ouagadougou
(Burkina Faso), 87 days from N’djamena (Chad), and 93 from Almaty (Kazakhstan).
In contrast, it takes only 20 days in China or Malaysia or Chile. Long
delays also make it impossible to export perishable agricultural products
such as meat, fruits, and vegetables, the study finds. Released today,
the study determines how time delays affect international trade, comparing
newly-collected data on the days it takes to move standard cargo from the
factory gate to the ship in 126 countries.
The study introduces new trade research based on the data provided from
the Doing
Business in 2006: Creating Jobs report
– an annual report cosponsored by the IFC and the World Bank. The new
study concludes that each day of delays reduces a country’s export volumes
by about 1 percent. For example, if Burkina Faso reduced its factory-to-ship
time from 71 days to 27 days (the median for the sample), exports may increase
by nearly 45 percent. Similarly, if the Central African Republic reduced
its median factory-to-ship time from 116 days to 27 days, exports would
nearly double.
Delays have a great impact on a developing country’s exports, especially
perishable agricultural products. A day’s delay reduces exports of highly
perishable agricultural goods, such as corn, apricots, and cucumbers, by
7 percent, as compared to agricultural goods with a longer storage life,
such as potatoes or apples. This makes it unlikely that many countries,
particularly in Africa, will be able to benefit significantly from existing
duty-free access provisions or from future trade liberalization in OECD
agricultural markets under a WTO agreement -- unless export procedures
are simplified.
Most delays are due to administrative hurdles, ranging from numerous customs
and tax procedures to clearances and cargo inspections. Such hurdles often
occur well before the containers reach the port. The study concludes that
infrastructure problems are especially large for landlocked African countries,
where poor transport infrastructure can lead to excessive delays and where
exporters need to comply with different requirements at each border. Harmonizing
transport and customs procedures is the main way to increase efficiency.
Such reforms are successfully taking place in southern Africa, and momentum
is building in West Africa.
Trading on Time highlights the need to focus aid for trade in developing
countries on improving trade facilitation; removing obstacles to exporting
will broaden market opportunities for the private sector. The study also
illustrates the potential gains from addressing the trade facilitation
agenda in trade agreements, including through the WTO.
For access to the full study: Trading
on Time, please visit: www.doingbusiness.org/trade
For more information on the Doing Business
report series, please visit: www.doingbusiness.org