to become “an agent of change”, the Bank was promoting
trade and transport facilitation measures at border crossings and transit
interfaces. The programme was aimed
at: customs reform; streamlining
administrative procedures; regional cooperation through transit agreements and
harmonization of administrative monitoring; and promoting integrity.
One of the session’s co-Chairs, O.I. Djama, Minister of Equipment and
Transportation of Djibouti, said that his Government was encouraging the private sector to
invest in major equipment to make up for public sector shortfalls. Management of the Djibouti Port had, thus,
been delegated to a strategic partner.
The same would be done with the railway. In order to upgrade its human resources, the Government was
working on a diversified programme to train professionals for both the public
and private sectors.
In
a lively interactive dialogue that followed the panel presentations, speakers
discussed the a number of measures proposed in a working paper by the United
Nations Conference on Trade and Development (UNCTAD), which included
recommendations on institutional capacity-building and regulatory reform, and
introducing sustainable technology applications through the transfer of knowledge. Also raised in the discussion were such
issues as equipment upgrades; local roads infrastructure; a possible “renaissance”
in the railroad system in Africa; tourism; the port system; bank lending
policies; and human resources and training policies.
Luis
Filipe Marques Amado, Secretary of State for Foreign Affairs and Cooperation of
Portugal, co-chaired the session. Other
panellists were:
H. Maldonado, Universidad
Simón Bolivar, Venezuela; P. Jourdan, Chief Executive Officer (CEO), Mintek,
South Africa; H. Boyd, CEO, Safmarine, South Africa; R.B. Rauniar, Interstate
Multi-Modal Transport, Nepal; and F.L. Perret, Vice-President, EPFL, Lausanne,
Switzerland.
The Secretary-General of UNCTAD, Rubens Ricupero, made a
closing statement.
At
9:30 a.m. tomorrow, the last of the Conference’s thematic sessions will be
held, on “Financing Growth and Development”.
Thematic Session
Issues Note
An issues
note on Transport and Development (document A/CONF.191/BP/1), which
began “transport is central to development”, contains two sections: transport
and development of least developed countries (LDCs); and strategies to improve
transport efficiency.
The first section addresses such
issues as globalization, foreign direct investment (FDI), electronic commerce,
private/public partnerships, transport policy, legal framework, and
infrastructure requirements. The second
section describes such things as reform measures, information technology
solutions to transit/transport management and administration, regional integration,
establishing and strengthening of professional associations, and human
resources development and training.
The note points out that
there is a cause-and-effect relationship between the availability of adequate
transport services, the access thereto, and the scope for trade-based
development processes. Trade success or
failure in LDCs trading low-value goods is largely determined by transport
availability and cost. The share of
freight cost in import values can serve as an indication of the impact of
transport cost on the ability of countries to effectively participate in global
trade. Landlocked LDCs face freight
costs of up to 40 per cent of import value, compared to the world average of 6
per cent.
The note goes on to
describe a number of activities that could have a direct impact on the
transport situation of LDCs, which largely relate to improvements in the
working of institutions, regional agreements, management assistance
(particularly through the application of information technology), and the
transfer of knowledge.
Opening
Statements
LUIS FILIPE MARQUES AMADO,
Secretary of State for Foreign Affairs and Cooperation of Portugal and a
co-Chair of the session, said it was important to identify strategic areas to
mobilize support for the LDCs. In
contrast to the LDCs development potential were their handicaps, in view of
which transport infrastructures and equipment acquired particular
importance. To achieve progress, it was
important to identify the best policies and programmes. Institutional management should be aimed at
adapting the structural conditions in the LDCs to their particular needs. Specific strategic issues needed to be
addressed to facilitate the LDCs’ integration in the global markets. Promotion of good governance and improved
regulatory functions was of particular importance, especially in the
liberalization and privatization of transportation.
Continuing, he stressed
the importance of regional efforts, which could complement the measures at the
national level. It was necessary to
create regional information systems to improve the efficiency of the transport
sector. International transactions
required an integrated approach, which would be important not only in time of
peace, but also in emergency situations, which required fast delivery of
medicines, food and supplies. Joint
efforts could be contemplated with development partners and international
institutions in training of personnel for transport services.
Market operation and
social protection were among the most important factors in the LDCs, he
added. Urban and rural transport
systems in the developing countries should ensure access to work, education and
services. The international community
could play an important role in developing the LDCs’ transport capability.
O.I. Djama, Minister of Equipment
and Transportation of Djibouti, also a
co-Chair, said transport was a key tool for his country’s sustainable
social and economic development. Due to
its geo-political position, and in light of trade flows through that part of
world, Djibouti’s transport systems had to be adapted in terms of capacity,
performance, and international standards.
In short, it had to become an engine of high performance, so that it
could be an engine of development in the Horn of Africa, while turning Djibouti
into an international site.
He said his Government was encouraging the private
sector to invest in major equipment to make up for public sector
shortfalls. Management of the Djibouti
Port had, thus, been delegated to a strategic partner. The same would be done with the
railway. Also, human resources must be
upgraded. The Government wanted a
diversified programme to train professionals for both the public and private
sectors. An additional pressing issue
was regional integration and, by extension, the need to take full advantage of
trade opportunities in the global marketplace.
A subregional framework must be created to rationalize the transport of
goods and optimize physical and information flows.
In his
keynote speech, TOMAZ AUGUSTO SALOMAO, Minister of Transport and Communications
of Mozambique, said that it was important to improve the transport
infrastructure in terms of coverage, quality and safety, as well as operational
efficiency of transport-related enterprises.
The countries of the Southern African Development Community (SADC) were
convinced that transport and communications infrastructure was important for
their domestic human capacity; poverty alleviation; removal of barriers; and
good governance. He went on to describe
the SADC regional transportation infrastructure and added that if its general
condition could be considered fair to good, there were areas where the network
was in a very poor condition, due to outdated design or poor maintenance. Estimates indicated that an alarming 30 to
35 per cent of the value of goods in the region was due to transport costs, and
the countries were committed to addressing that problem.
Regional
cooperation was deepening, reforms were accelerating, and prospects for the
region looker brighter than ever, he said.
However, in the face of globalization, it was no longer enough to
perform well. Transportation systems
had to perform to global standards, if the region was to remain
competitive. It was necessary to create
in southern Africa a seamless, integrated, cost-effective and responsive
transport and communications system, based on partnerships between the public
and private sectors. The countries had
embarked on coordinated legislative reforms in order to achieve that goal. Customs documentation and information
systems were being harmonized, and regional private associations were being
encouraged.
Continuing,
he said that his country had completed the “concessioning” of the Maputo port
to an international consortium. The
Nacal railway and port had previously undergone a similar transformation. The country had also embarked on
telecommunications reform. The ultimate
goal was to modernize the entire sector, with the aim of cutting costs and
expanding the services to the rural areas.
The SADC countries believed that it was strategically important to
secure greater involvement of the private sector. The public/private
partnership offered important financial and non-financial benefits, including
private-style management and the means to bridge the financing gap. An example of what could be achieved through
political good will, regional cooperation and public and private partnership
was the Maputo Development Corridor.
Panellists
P.
Jourdan, Chief
Executive Officer (CEO), Mintek, South Africa, said the private sector was
needed to help the transport sector infrastructure, but they needed immediate
returns and security of investment. A
synchronous position was needed, but that was difficult. A private company would not put in an
investment until there was an operational structure, but then one could not put
the latter in place without the former.
It was a classic case of the problem of what came first –- the chicken
or the egg? The only way of overcoming
that hurdle was by having integrated investments. Therefore, cargos needed to be in place at same time as
money. While it was not the easiest
thing in the world to do, it had to be attempted.
He said the danger was that public and private
sector partnerships were by nature problematic. Infrastructure by nature lent itself to being monopolized.
Another unrelated challenge that needed to be addressed was the natural
advantage given to coastal centres and the disadvantages faced by inland
countries. On way forward was to
identify natural development zones, which were inevitably cross-border and
integrated the economic infrastructures.
H. BOYD, CEO of
Safmarine, South Africa, said that he strongly believed that the transport
sector needed to be developed in order to build national capacity and
international competitiveness. Handling
the ocean leg of trade operations, he could say that, without an effective cost
base, marketing strategies and quality control, it was impossible to be
internationally competitive. Companies
could lose customers by being a week late in the delivery of materials, and it
was important to be efficient. With 10
per cent of the world population in the LDCs versus 0.4 per cent of world
trade, it was important to develop the potential of those countries. It was not only the trade itself; it was
also the services that accompanied it that needed to be developed.
Transport
needed to be considered along with other components of development, in a
measurable way, he said. For LDCs,
ocean freight was cost effective and it did not provide competitive
disadvantages. The costs of land
transport needed to be considered, along with ocean transportation, and the
inefficiencies of the land transportation system needed to be addressed. Ports needed to be efficient, with good
management and equipment. Port charges
should be standardized, for exaggerated charges represented hidden
taxation. Standardized procedures and
documentation needed to be worked out, as countries moved away from State
monopolies. It was also of the utmost
importance to take measures against corruption. When looking for sources of taxation, governments needed to tax
proceeds and not goods. Securing access
to markets was a key element of development, and in that transportation could
play a leading role.
R.B.
Rauniar,
Managing Director, Interstate Multi-Modal Transport, Nepal, said gross domestic
product (GDP) per capita in his country was less than $1 per day. It was landlocked and transport to the sea
was, thus, a problem. The current
session was being held to examine how to improve the transport costs of LDCs
through enhanced efficiency and management.
The common shortfalls of LDCs when it came to the transport sector were: geography; the effects of natural
catastrophes; poor infrastructure; poor implementation due to poor governance;
lack of political commitments; weak government; and corruption.
He said efficient
transport combined with low costs was no doubt a very important factor for
LDCs. If progress were slowed by high
costs, it would have a direct effect on the economy of the country.
Unfortunately, many LDCs produced low-value goods. Profits depended on the value of goods, distance to the nearest
port, transport costs and volume of goods.
Many inland LDCs had to rely on road or rail transport. Also, the high investment costs made it
impossible for some countries to put down good surface transport routes. Nepal, however, had the potential for
hydroelectricity, which meant it could produce cheaper fuel than that generated
by hydrocarbons. That source of fuel,
coupled with the potential use of electric rail, would have to be explored.
GEORGE MPUNDU KANJA,
Senior State Advocate, Attorney-General’s Chambers, Ministry of Legal Affairs, Zambia,
said poor transport infrastructure and the high cost of production hampered the
competitiveness of exports from LDCs in regional and international
markets. There was often a lack of
adequate government financial resources to maintain appropriate levels of
investment, both in the maintenance and modernization of infrastructure. That situation was made worse by the decline
in concessional aid for infrastructure development, and the demand for
efficient and sophisticated logistical services by customers. All those factors had created an urgent need
for private sector capital and management expertise.
He said creating a
conducive and enabling environment for the private sector and having efficient
transport and transit systems required continued support for policy,
legislative and institutional reforms at both the national and regional
levels. It was imperative to state
right from the outset that a number of LDCs’ policy, legal and regulatory
frameworks in the transport sector were not adequate. They neither attracted the private sector to transport nor
brought efficiency to the transport sector.
He said Zambia, like many
other LDCs, realizing the need to reduce transportation and transaction costs,
as well as improving the transit system at all levels, had entered into
regional trade and transportation agreements.
The LDCs were committed to undertaking legal and regulatory reforms and
to implementing trade and transport agreements. They were, however, hindered by a lack of financial
resources. Furthermore, most of the
reforms were new and so were the institutions set up to administer and
implement them. Thus, the institutions
themselves needed strengthening. The
countries concerned had neither the experience nor the expertise for that. That was where the international community’s
cooperating partners could play an important role -- providing targeted
financial support and expertise.
MARK J.
JUHEL, Lead Transport Specialist, World Bank, said that competitiveness was one
of the important points which could help LDCs increase their market share. Among the most prominent obstacles to LDCs’
participation in the increasingly globalized economy was the prohibitive cost
of transport and logistical services. Striving
to become “an agent of change”, the Bank was continuing to address that
issue. The Bank’s “Border Agenda” dealt
with trade and transport facilitation measures at border crossings. The programme was aimed at: customs reform;
streamlining administrative procedures; regional cooperation through transit
agreements and harmonizing administrative monitoring; and promoting
integrity. Since the end of the 1970s,
the Bank had been involved in those measures, in close cooperation with the
United Nations Conference on Trade and Development (UNCTAD). Less than a month ago, the latest trade
facilitation project had been completed.
Inland transport networks
and services were another area of interest to the Bank, he said, encompassing
policy and regulatory measures to enhance competition in the delivery of
transport services through more open access to markets, unbiased modal
competition and the removal of legal impediments to the development of
multi-modal transport. Those efforts
required better information on particular countries’ preferences, costs and
conditions. Sustainable arrangements
needed to be in place to maintain the infrastructure, and the Bank was paying
particular attention to that area. The
Bank’s ongoing road maintenance scheme had brought some interesting results. Community involvement in road maintenance
was also important.
Through regional and global
initiatives, the Bank had launched the global facilitation partnership for
transportation and trade, in cooperation with the International Chamber of
Commerce. That was an attempt to bring
together various players on that specific topic. A document had been just posted on the World Bank’s Web site on
port reform, which he hoped would be easy to use. The Bank’s other initiatives included the Sub-Saharan Africa
Transport Policy Programme, which was focusing on enhancing regional
integration prospects by reducing bottlenecks in the region.
F.L.
PERRET, Vice-President of EPFL, Lausanne, Switzerland, said that when it came
to providing training in the transportation sector, there were as many
approaches as there were professors.
Some programmes had sought to address some of the basic questions raised
in today’s debate. Transport was not an
end in itself; it was designed to improve human mobility. It was also important to remember that good
governance could not just be transposed to all countries, like a carbon
copy. For that reason, the rationale of
training had to be multicultural.
The question of
transportation could not be considered from a sectoral point of view, he
said. It needed to be considered in the
global context. Quality service was
expected from modern transportation, but even a slight improvement could be
very costly. Information technology
could provide for proper tracking and tracing of goods, leading to increased
customer satisfaction. An ever larger
number of global transportation companies were operating under their own rules
and procedures. They played an
increasingly important role in the competitive markets. In training young professionals, it was
important to take those aspects into consideration. Several higher education institutions, including his own, were
incorporating them into their programmes.
H.
MALDONADO, Universidad Simón Bolivar, Venezuela, and moderator, said it was
quite clear from the presentations that there was a definite relationship
between transport and development. The
question, again, was, what came first? That link had to be taken into account
whenever there was a discussion on development.
He
said another point raised was the need for governmental agendas in LDCs to
include transport as an important factor.
If that was not done, the situation could deteriorate. Another important issue was the question of
a comprehensive approach to transport, which would integrate all factors. Approaches should be looked at regionally,
globally and nationally. Any weak point
in that chain would weaken the whole system.
Any approach also had to be systemic.
He
said good governance and good management had also been highlighted. There had to be efficiency between the work
of the private and public sectors. If
that were not the case, business structures would collapse. The link between the two sectors was a
golden rule. Panellists had also
expressed the need for an integrated global approach to human resources. Bolivia, a landlocked country in South
America, had benefited from being the central link that connected the Pacific
side of the continent to the Atlantic.
He asked panellists if that success story could be used elsewhere, as a
solution.
Interactive
Session
One speaker noted that the
issue of local roads, which was very critical, had been neglected in today’s
discussion. It was stressed that local
roads were just as important as the big ones.
There were some industries that were not dependent on big industries for
their development. Local and rural
roads served those enterprises. In that
context, the question was raised as to why there were not as many bicycles in
Africa as there were in Asia. The Ho
Chi Minh trail, for example, was successful because of the bicycle.
In response to that,
another speaker noted that many rural African roads were made of either sand or
dust, which made them hazardous for travel by bicycle, especially during the
rainy season, when they turned to mud.
A renaissance in the
railroad in Africa was perhaps something that had to be looked at, a speaker
said. There were no easy solutions. It was also not attractive for sponsors to
upgrade and modernize a railroad only to make it viable for a private investor. Modernization of the railroad required
strategic,
in-depth discussions, so that the vital steps to
revitalize the railways could be taken.
Now was the time to start a debate on that. Another speaker added that tourism, which was the topic of
discussion earlier this week, required efficient transport systems.
Addressing the issue of
the development of landlocked countries, the concept of a dry port system was
supported. With such a system, a
country could be traversed, as persons or cargo moved from one coast to another. Speakers also called for the reduction of
transport costs for goods from LDCs.
It was
also proposed that UNCTAD, the International Union of Railways, and the World
Bank publish on the Internet indicators of best and worst rail practices and
information on rail traffic, among other things. The benefits from such a venture could affect rail management and
railroad efficiency. Seminars could
also be organized under the auspices of the three organizations to discuss
methods to achieve best practices with rail managers.
Other questions raised
concerned what could be done to improve the flow of funds to railway
infrastructure development and what was the World Bank’s lending policy
vis-à-vis loans for private or public sector investment in transport. Addressing the issue of human resources and
training policies, it was stressed that training had to be active and the agent
of change -- not a process that followed change.
Mr. JOURDAN reiterated
that there was a big risk in investment in the transport sector, which was why
there was so much reticence by the private sector. The biggest risk was that
there would be no cargo after the investment had been made. Least developed countries had to be
flexible, while the risk must be positioned where it could be most reduced. In other words, the cargo should be located
with either the producer or generator of the cargo. Transcontinental corridors could help landlocked States and would
open up a country like Botswana in the SADC.
The ultimate problem, however, was that landlocked countries had high
costs, whether they went east or west to the coast. They were far away from ports, and they would always have higher
costs.
Mr. JUHEL, responding a
question on World Bank loans to private or public sector investors in the transport
sector, said Bank lending for that area had remained very steady over the last
10 years or so. What was changing was
the way in which projects were looked at.
There was a more global and holistic approach. The Bank would be quite
ready to undertake financing for transport financing and even help countries to
prepare the ground to attract finances from other sources.
Mr. Amado said the session underlined the
importance of transport services to the development process. The session also identified a number of
areas
