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The Islamic Development Bank Group Together We Build a Better Future

6 th IRU Euro-Asian Road Transport conference Tbilisi, 16 June 2011 Transport facilitation to support growing trade Walid Abdelwahab Director, Infrastructure Department. The Islamic Development Bank Group Together We Build a Better Future. Outline. Introduction

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The Islamic Development Bank Group Together We Build a Better Future

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  1. 6th IRU Euro-Asian Road Transport conferenceTbilisi, 16 June 2011 Transport facilitation to support growing trade Walid Abdelwahab Director, Infrastructure Department The Islamic Development Bank Group Together We Build a Better Future

  2. Outline • Introduction • Trade and transport facilitation: filling the missing puzzle pieces • The different layers of trade and transport facilitation • IDB Group’s approach to trade and transport facilitation • IDB Approach for Euro-Asian trade and transport facilitation

  3. Introduction: (i) trade and development • International trade is an engine for development, UN Monterrey consensus • Poor countries hold 40 % of the world's population, but receive only 3 % of the world's income from trade. • Poorest 49 countries make up 10% of the world’s population, but account for only 0.4% of world trade, UNCTAD • Developing countries highly depend on trade: 81% of GDP for low income countries (vs. 57% for high income countries), WORLD BANK • Eighty-five developing countries depend on commodities for more than half their export earnings, UNCTAD • By increasing their share in global trade, developing countries are meeting their development goals UNCTAD

  4. Introduction: (ii) transport and trade • Trade and transport are inextricably linked. Transport costs are a key determinant of international trade competitiveness, UN Almaty declaration • A 10% drop in transport cost increases trade by 25%, Limao and Venables 2001 • Developing countries face much higher transport costs than developed countries • Landlocked developing countries suffer most from high transport costs which can be three times more than the tariffs imposed on goods, UNDP 2008

  5. Transport facilitation: filling the missing puzzle pieces… Infrastructure Transport services …to remove physical & non-physical barriers to cross-border trade Regulation Customs clearance Governance

  6. Transport facilitation: filling the missing puzzle pieces (2) 13 days + gap with developed countries 10 days + gap with developed countries Source: doing business

  7. IDB Group’s approach to transport facilitation (1): strategic IDBG Vision: Facilitate economic integration of IDB Member Countries Project based integration: Transportation Corridors Trade Facilitation Special Economic Zones Railway Road Border Gate Modernization

  8. IDB Group’s approach to transport facilitation (2): institutional • $6.4 Bn in 389 projects since inception • About 25% of IDB portfolio • 10 to15% growth every year • Finance infrastructure projects and technical assistance • Focus on regional transport projects • Transport projects through PPP • $2.5 billion every year • total approvals in excess of $ 36 Bn • unique trade finance institution • Trade Cooperation and Promotion Program • Cross-border investments • Special economic zones • Establishment of financial institutions • export insurance tools

  9. IDB Group’s approach to transport facilitation (3): partnership • With other IFIs • With regional and international l organizations (IO) • Joint IFI-IO agreements • IDB-UNECE-ECO • IDB-UNCTAD-ECO … • Flagship initiatives • Great Silk Road, CAREC, TRACECA, NELTI, Mashreq … …

  10. IDB Group’s approach to transport facilitation (4): Needs-based

  11. IDB approach to Euro-Asian trade and transport facilitation • (Central or Southern Route) • East Asia  EU • 1995 = $244 billion • 2008 = $795 billion • South Asia  EU • 1995 = $34 billion • 2008 =$117 billion • (through Turkey) • MENA  EU • 2008 = $238 billion • (through CIS countries) • East Asia  Middle East • 1995 = $57 billion • 2008 = $454 billion >> Integrate MENA in the increasingly globalized trade and transport sectors

  12. The way forward • Ensure balance between trade facilitation and transport facilitation efforts • Develop inclusive trade • Enhance collaboration mechanisms • Country level: IDB country programs • Regional level: IDB-ECO, IDB-LAS, IDB-ESCWA • Inter-regional level: IDB-(ECE-ESCWA-ESCAP)

  13. Thank you Walid Abdelwahab wabdelwahab@isdb.org

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