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Reliable Supply Chains: The Answer to Country Development and Growth

Monica Alina Mustra's picture

In today’s interconnected world economy, efficient, reliable and cost-effective supply chains have become necessities in global trade. Trading in a timely manner with minimal transaction costs allows a country to expand to overseas markets and improve its overall economic competitiveness. For many countries, however, identifying bottlenecks along a supply chain and then determining which logistics procedures and infrastructure to upgrade can be a challenging feat.

These concerns were at the forefront of a World Bank workshop held in Seoul, Korea this week that examined trade and transport facilitation assessments and explained some of the practical implemental guidelines. The World Bank workshop was part of the Asia Pacific Facilitation Forum (APTFF) annual conference, which attracted more than 200 policymakers and private sector representatives from 25 countries across Central Asia, East Asia, South Asia and Southeast Asia.

The workshop focused on two World Bank trade facilitation tools: the Logistics Performance Index (LPI), a global benchmarking indicator, and the Trade and Transport Facilitation Assessment (TTFA), a country-level diagnostic tool for logistics performance.

The LPI and TTFA are closely intertwined yet serve different objectives. The LPI measures a country’s trade logistics performance, while the TTFA translates a country’s trade facilitation goals into concrete implementation plans. Individual countries and regional economic groups can turn to the LPI to review the global competitiveness of their performance and use the TTFA for a more comprehensive assessment.

A prominent case of how World Bank clients use these tools is the recently adopted Mashreq Regional Cross-Border Program, for a regional group that includes Iraq, Jordan, Lebanon, Palestine and Syria.  The LPI was initially used to identify overall obstacles the Mashreq countries face in their supply chains, followed by a regional TTFA that pinpointed specific challenges in freight corridors, cross-border facilities and procedures, and coordination gaps such as a lack of a corridor management agency and regional logistics hub. By using the LPI and TTFA, the Mashreq countries have developed a detailed action plan to implement trade facilitation reforms. The plan led to a US$ 6.8 billion World Bank-funded Mashreq Corridor Program that will be implemented over 15 years.

Under its recently adopted Trade Strategy the World Bank plans to extend this type of trade facilitation assistance to other countries and regional economic groups across the developing world. A focus on supply chains will be critical if countries want to continue to increase their global competitiveness, expand trade and grow.

For more information about the World Bank’s trade facilitation initiatives, please visit www.worldbank.org/tradefacilitation.