This important report reviewed here was prepared by the World Bank which
we hope will receive the due consideration it deserves considerable
attention and study in the formulation of new development strategies in
the future.
However, approaches that focus on weak physical infrastructure alone as a barrier to connecting the poor to markets are unlikely to achieve their full potential. Addressing “soft infrastructure” constraints — including logistics services and border management is required to maximize the gains from infrastructure investments. This entails policy measures and regulatory reforms that often involve complex political economy dynamics. Freight costs in developing countries are on average 70 percent higher than in developed countries, with Africa being the region with highest cost, at twice the world average.
Lowering freight costs requires a mix of increased competition, simplified regulations, and other reforms to address the structure of the transport sector. A recent study shows that that the gains from trade in remote regions of Nigeria and Ethiopia tend to be captured by intermediaries, highlighting the role of high distribution costs in limiting the gains from trade enjoyed by the poor in remote areas.
Lowering trade costs through improvements to policy and procedures affecting border management is critical. The costs generated by inefficient border management can be addressed through trade facilitation reform programs. The measures contained in the WTO Trade Facilitation Agreement should form the “baseline” for any trade facilitation program to connect the poor to the opportunities presented by international trade. These measures also would complement existing national and regional trade facilitation initiatives, as well as other reforms, including those targeted at small-scale traders like Simplified Trade
Regimes or the Charter for Cross-Border Traders
Improvements in access to information and communications technologies (ICTs) can increase the gains from trade for the poor. The quality of ICT infrastructure in developing countries lags significantly behind high-income countries. At the global level the application of ICTs has significantly changed the transport sector. The freight industry, traditionally very fragmented, has become more integrated, and a multimodal transport system organized by logistics companies has developed. Sharing information among terminal operators, shippers and customs brokers can help manufacturers and logistics contractors to manage the supply chain and facilitate “just-in-time” delivery and material requirements planning. Inability to deliver on time significantly reduces access to new trade opportunities arising from supply chain production.
In addition, cross-border trade in services (GATS Mode 1) largely depends on telecommunications as the channel for transactions. For example, the use of ICT in the tourism sector renders the use of online reservation systems possible, thus providing local people working in the sector the possibility to bypass international agents in the tourism value chain. Technology has also enabled the rapid growth of business process outsourcing in developing countries like the Philippines and India, creating new and better-paying jobs for people. Online freelancing also provides workers access to larger and more global employment marketplaces. Workers can bid for tasks on platforms, such as Elance-oDesk and Freelancer.com, and deliver services digitally to their employer.
ICTs also can help to reduce information costs, foster trade, improve market efficiency and increase traders’ income. For example, the introduction of mobile phone services to coordinate sales between fishermen at sea and wholesale and retail traders in Kerala — a state in India with a large fishing industry — has reduced price dispersion across markets through increased opportunities for arbitrage. Fishermen’s profits increased by 8 percent, consumer prices fell by 4 percent, and fish waste was reduced. The Internet is improving access to information on markets and also on countries’ trade rules and regulations.
Additionally, the opportunities for lowering trade costs by connecting to buyers directly and using efficient distribution services established by large, specialized e-commerce firms can help create new export opportunities that can generate benefits for the poor. Export survival rates appear to be significantly higher for firms participating in e-commerce,
Improvements in access to information and communications technologies (ICTs) can increase the gains from trade for the poor. The quality of ICT infrastructure in developing countries lags significantly behind high-income countries. At the global level the application of ICTs has significantly changed the transport sector. The freight industry, traditionally very fragmented, has become more integrated, and a multimodal transport system organized by logistics companies has developed.
Sharing information among terminal operators, shippers and customs brokers can help manufacturers and logistics contractors to manage the supply chain and facilitate “just-in-time” delivery and material requirements planning.
Inability to deliver on time significantly reduces access to new trade opportunities arising from supply chain production. In addition, cross-border trade in services largely depends on telecommunications as the channel for transactions. For example, the use of ICT in the tourism sector renders the use of online reservation systems possible, thus providing local people working in the sector the possibility to bypass international agents in the tourism value chain. Technology has also enabled the rapid growth of business process outsourcing in developing countries like the Philippines and India, creating new and better-paying jobs for people.
Online freelancing also provides workers access to larger and more global employment marketplaces. Workers can bid for tasks on platforms, such as Elance-oDesk and Freelancer.com, and deliver services digitally to their employer.
ICTs also can help to reduce information costs, foster trade, improve market efficiency and increase traders’ income. For example, the introduction of mobile phone services to coordinate sales between fishermen at sea and wholesale and retail traders in Kerala — a state in India with a large fishing industry — has reduced price dispersion across markets through increased opportunities for arbitrage.
Fishermen’s profits increased by 8 percent, consumer prices fell by 4 percent, and fish waste was reduced. The Internet is improving access to information on markets and also on countries’ trade rules and regulations.
Additionally, the opportunities for lowering trade costs by connecting to buyers directly and using efficient distribution services established by large, specialized e-commerce firms can help create new export opportunities that can generate benefits for the poor. Export survival rates appear to be significantly higher for firms participating in e-commerce, and e-commerce appears to be facilitating the participation of a greater number of small firms in international trade.
However, approaches that focus on weak physical infrastructure alone as a barrier to connecting the poor to markets are unlikely to achieve their full potential. Addressing “soft infrastructure” constraints — including logistics services and border management is required to maximize the gains from infrastructure investments. This entails policy measures and regulatory reforms that often involve complex political economy dynamics. Freight costs in developing countries are on average 70 percent higher than in developed countries, with Africa being the region with highest cost, at twice the world average.
Lowering freight costs requires a mix of increased competition, simplified regulations, and other reforms to address the structure of the transport sector. A recent study shows that that the gains from trade in remote regions of Nigeria and Ethiopia tend to be captured by intermediaries, highlighting the role of high distribution costs in limiting the gains from trade enjoyed by the poor in remote areas.
Lowering trade costs through improvements to policy and procedures affecting border management is critical. The costs generated by inefficient border management can be addressed through trade facilitation reform programs. The measures contained in the WTO Trade Facilitation Agreement should form the “baseline” for any trade facilitation program to connect the poor to the opportunities presented by international trade. These measures also would complement existing national and regional trade facilitation initiatives, as well as other reforms, including those targeted at small-scale traders like Simplified Trade
Regimes or the Charter for Cross-Border Traders
Improvements in access to information and communications technologies (ICTs) can increase the gains from trade for the poor. The quality of ICT infrastructure in developing countries lags significantly behind high-income countries. At the global level the application of ICTs has significantly changed the transport sector. The freight industry, traditionally very fragmented, has become more integrated, and a multimodal transport system organized by logistics companies has developed. Sharing information among terminal operators, shippers and customs brokers can help manufacturers and logistics contractors to manage the supply chain and facilitate “just-in-time” delivery and material requirements planning. Inability to deliver on time significantly reduces access to new trade opportunities arising from supply chain production.
In addition, cross-border trade in services (GATS Mode 1) largely depends on telecommunications as the channel for transactions. For example, the use of ICT in the tourism sector renders the use of online reservation systems possible, thus providing local people working in the sector the possibility to bypass international agents in the tourism value chain. Technology has also enabled the rapid growth of business process outsourcing in developing countries like the Philippines and India, creating new and better-paying jobs for people. Online freelancing also provides workers access to larger and more global employment marketplaces. Workers can bid for tasks on platforms, such as Elance-oDesk and Freelancer.com, and deliver services digitally to their employer.
ICTs also can help to reduce information costs, foster trade, improve market efficiency and increase traders’ income. For example, the introduction of mobile phone services to coordinate sales between fishermen at sea and wholesale and retail traders in Kerala — a state in India with a large fishing industry — has reduced price dispersion across markets through increased opportunities for arbitrage. Fishermen’s profits increased by 8 percent, consumer prices fell by 4 percent, and fish waste was reduced. The Internet is improving access to information on markets and also on countries’ trade rules and regulations.
Additionally, the opportunities for lowering trade costs by connecting to buyers directly and using efficient distribution services established by large, specialized e-commerce firms can help create new export opportunities that can generate benefits for the poor. Export survival rates appear to be significantly higher for firms participating in e-commerce,
Improvements in access to information and communications technologies (ICTs) can increase the gains from trade for the poor. The quality of ICT infrastructure in developing countries lags significantly behind high-income countries. At the global level the application of ICTs has significantly changed the transport sector. The freight industry, traditionally very fragmented, has become more integrated, and a multimodal transport system organized by logistics companies has developed.
Sharing information among terminal operators, shippers and customs brokers can help manufacturers and logistics contractors to manage the supply chain and facilitate “just-in-time” delivery and material requirements planning.
Inability to deliver on time significantly reduces access to new trade opportunities arising from supply chain production. In addition, cross-border trade in services largely depends on telecommunications as the channel for transactions. For example, the use of ICT in the tourism sector renders the use of online reservation systems possible, thus providing local people working in the sector the possibility to bypass international agents in the tourism value chain. Technology has also enabled the rapid growth of business process outsourcing in developing countries like the Philippines and India, creating new and better-paying jobs for people.
Online freelancing also provides workers access to larger and more global employment marketplaces. Workers can bid for tasks on platforms, such as Elance-oDesk and Freelancer.com, and deliver services digitally to their employer.
ICTs also can help to reduce information costs, foster trade, improve market efficiency and increase traders’ income. For example, the introduction of mobile phone services to coordinate sales between fishermen at sea and wholesale and retail traders in Kerala — a state in India with a large fishing industry — has reduced price dispersion across markets through increased opportunities for arbitrage.
Fishermen’s profits increased by 8 percent, consumer prices fell by 4 percent, and fish waste was reduced. The Internet is improving access to information on markets and also on countries’ trade rules and regulations.
Additionally, the opportunities for lowering trade costs by connecting to buyers directly and using efficient distribution services established by large, specialized e-commerce firms can help create new export opportunities that can generate benefits for the poor. Export survival rates appear to be significantly higher for firms participating in e-commerce, and e-commerce appears to be facilitating the participation of a greater number of small firms in international trade.
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