By ,
Executive Director, International Trade Centre (ITC)
Although it may not be obvious at first glance, Mongolia, Paraguay, Switzerland, and Zambia share more than the colour red in their flags: They have all dealt with – or are still dealing with – red tape and trade bottlenecks as landlocked countries. Bordered by countries on all sides with no direct access to an ocean or sea, landlocked countries deal with unique challenges to trade, especially when it comes to transport and logistics. With these challenges, however, come opportunities to innovate.
As they say, necessity is the mother of invention.
For example, Switzerland – headquarters of the International Trade Centre (ITC) – has topped innovation lists and is well known for its strong research and development culture, well-connected transport system and tradition of entrepreneurship, including support of small businesses.
This is not the case for most landlocked countries, in particular for developing countries.
The logistics performance of landlocked developing countries on average last year was 17% lower than the global average, according to the World Bank. Beyond limited physical infrastructure – such as roads and railways – other reasons for this lower performance include disjointed national reforms along trade routes, lack of tech-enabled border procedures and lack of coordination along trade corridors, to name a few.
In response, we at ITC have been working with landlocked developing countries on trade facilitation through customized interventions. Let me share a few examples of best practices we’ve learned through our 60 years in operation:
As countries, border agencies and international organizations strengthen collaboration to make cross-border trade faster, easier and less costly – especially for small businesses – landlocked-ness can be turned into landlinked-ness, setting countries on a path towards sustainable and inclusive development.
- Invest in trade procedures before investing in hard infrastructure: Fact is, the usefulness of hard infrastructure depends on efficient processes and procedures along trade corridors. Coordinating border and logistics reforms along trade corridors reduces transit times, lowers transportation costs and ensures the smooth flow of goods across borders. Simultaneously, improved logistics infrastructure enhances connectivity, further supporting economic development. These reforms not only enhance trade efficiency but also promote regional integration and attract investment, strengthening these countries’ participation in the global economy.
- Make decisions based on data: We’ve developed an online platform called the Central Asia Gateway with partners in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, which allows for comparing of trade formalities along regional corridors, making it easier for policymakers and businesses to develop solutions. This platform – which won the 2023 “Best Trade Information Portal” award at the World Investment Forum in Abu Dhabi – enhances transparency throughout supply chains, saving businesses time and money.
- Introduce digital solutions to accelerate trade connectivity: Going paperless makes trade faster, cheaper and more environmentally friendly. Countries can more easily share data with border agencies, at domestic and regional levels, using digital customs declarations, e-licensing, electronic certificates of origin or by acceding to the UNESCAP paperless trade conventions. These solutions are being developed with the support of ITC and other international partners. We also work with landlocked developing countries on the implementation of digital solutions like electronic queuing systems, digitalization of certificates of origin and electronic single windows for cross-border data exchanges.
- Get small businesses ready to comply with cross-border requirements: Small businesses make up the backbone of most – if not all – of the 32 landlocked developing countries worldwide. They face many challenges to going global, including lack of market intelligence, relevant skills, technology and finance. They face burdens related to high transportation and logistics costs and dependence on neighbouring countries, as well, and so they need customized training to comply with requirements.
- Be deliberate about fostering women’s participation in cross-border trade: Women face particular challenges in trade. Women often face harassment, bribe requests and long queues while carrying children, and in many cases take informal routes to avoid complicated cross-border requirements. These women lose out on the opportunity to grow their businesses, which in turn affects national economic growth. Trade facilitation measures that target gender-specific challenges will help ensure economies reap the benefits of women’s participation in cross-border trade.
As countries, border agencies and international organizations strengthen collaboration to make cross-border trade faster, easier and less costly – especially for small businesses – landlocked-ness can be turned into landlinked-ness, setting countries on a path towards sustainable and inclusive development.
