Towards An ‘Electronic Trading Platform’

1. Towards An‘Electronic Trading Platform’ Pakistan Electronic Trading (PAKET) Network March 18, 2006 Mohammed Imani Executive Director Sidat Hyder Morshed Associates (Pvt) Ltd.

2. Outline • Pakistan Trade Statistics • Significance of Trade and Transport Facilitation • Single Window – Concept and Benefits • PAKET Study Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

3. Pakistan’s Trade Statistics • Trend Analysis 4.3 Rupees (Trillions) 4.0 3.0 15% 2.1 2.0 1.2 1.0 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 Source: Federal Bureau of Statistics. Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

4. Trade GDP % of Trade to GDP Pakistan’s Trade Statistics • Trade to GDP Analysis 7.0 35 34 6.0 33 5.0 32 4.0 31 Rupees (Trillions) % 30 3.0 29 2.0 28 1.0 27 26 Source: Federal Bureau of Statistics. ‘01 ‘02 ‘04 ‘05 ‘03 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

5. Trade and Transport Facilitation Definition “The simplification and harmonization of international trade procedures” with trade procedures being “the activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade” Source: WTO Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

6. Cost – Benefit Analysis • Based on Results of Swedish Study (2002) • Cost of cumbersome procedures 2.5 to 15 percent of trade value • Using 2.5 percent this works out to at least 50 billion rupees A modest improvement of 2 percent can yield cost savings of at least One Billion Rupees per annum Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

7. Single Window Concept • Single Window (SW) is defined as a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements. • If information is electronic, then individual data elements should only be submitted once. Source: UN/CEFACT Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

8. Single Window • Benefits • Be a single source, integrated and standardized platform for meeting the requirements of all members of community • Function as an e-commerce platform for the members of the community. • Provide adequate, accurate and timely information • Improve the response time of stakeholders to their customers • Improve track and trace efficiency • Provide shipment/ service visibility • Generate alerts about delays or problems • Enable moving towards similar procedures across all communities • Provide for opportunities for re-engineering, adopting best practices • Be easily accessible and secure • Be easy to learn, operate and support Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

9. Potential Stakeholders Commercial Banks Insurance Companies Traders Pakistan Customs Transporters Freight Stations Port Authorities Weighbridge Operators PAKET State Bank of Pakistan Stevedores Ministry of Commerce Terminal Operators Shipping Agents Ministry of Ports and Shipping Clearing Agents Other Government Agencies Freight Forwarders International Trading Partners Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

10. Commercial Invoices DG Declarations Insurance 95% data repetition 70% data repetition 40% data repetition Customs Declarations Export Permits Space Booking 70% data repetition 30% data repetition 90% data repetition Request For Delivery Manifest 30% data repetition 70% data repetition Integrated Export Documents Data Repetition in Trade Documentation Source: Presentation on Capacity Building Workshop By Dagang Net Technologies. Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

11. PAKET Feasibility Study Scope of Phase I • Study existing requirements, procedures, and processes for the submission of import, export and transit documents and information to government • Identify/ascertain existing personnel resources within the relevant stakeholder organizations for project development, implementation, and operation • Identify and describe at least three ports with systems for electronic exchange of data Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

12. PAKET Feasibility Study Phase I Progress • Pakistan Customs • Karachi Port Trust • Port Qasim Authority • Karachi International Container Terminal • Qasim International Container Terminal • State Bank of Pakistan • Trade Associations, etc. Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

13. PAKET Feasibility Study Scope of Phase II • Assess overall organizational aspects of implementing PAKET • Examine legal issues, privacy legislation and data protection laws associated with Single Window • Assess potential impact of PAKET on existing systems, procedures, human resources • Consider “best practice” methods in existing electronic platforms in other countries where such systems have already been successfully implemented and recommend possible options for Pakistan Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

14. Critical Success Factors • Strong political will • Sponsorship at highest level • Legislative framework • Clear strategic plan • Close cooperation between government and business community • Streamlining and simplification of supply chain processes and procedures • Rationalization and harmonization of trade laws and regulations • Standardization of data definitions and use of standard protocols for connectivity and data sharing Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

15. Food for Thought • Single Window - source for revenue generation and technological excellence • Single Window is about economic development NOT technology implementation • Single Window is about implementing CHANGE • Tough but prudent decisions will have to be made Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants

16. Thank You Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants