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Lack of transport infrastructure in South and Southwest Asia

Lack of transport infrastructure in South and Southwest Asia . FIATA’s Perspective By Babar Badat. THE LACK OF LOGISTICS CONNECTIVITY IN MANY PARTS OF THE WORLD IS THE BIGGEST NON-TARIFF BARRIER TO THE GROWTH OF INTERNATIONAL TRADE . TRANSPORT GAP IN SOUTH ASIA.

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Lack of transport infrastructure in South and Southwest Asia

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  1. Lack of transport infrastructure in South and Southwest Asia FIATA’s Perspective By Babar Badat

  2. THE LACK OF LOGISTICS CONNECTIVITY IN MANY PARTS OF THE WORLD IS THE BIGGEST NON-TARIFF BARRIER TO THE GROWTH OF INTERNATIONAL TRADE

  3. TRANSPORT GAP IN SOUTH ASIA • Home to nearly 43% (about 596 million) of the world’s poor • Live on less than US$1.25 a day • Global Financial Crisis = Deceleration in real GDP growth in South Asia, from 8.7% in 2007 to 6% in 2009. Source: http://www.voxeu.org/article/poor-half-billion-pockets-poverty-south-asia http://www.worldbank.org/en/news/feature/2010/02/23/south-asia-escaped-worst-effects-global-economic-crisis

  4. INFRASTRUCTURE AND SERVICES • Lags behind other regions in creating a regional trade grouping • Lags behind in cross-border infrastructure investment • Intra-regional trade in South Asia accounts for a mere 5% of total trade (lowest out of all regions) • Lack of adequate access to basic social and economic services in rural areas

  5. Main Constraints in South Asia • Infrastructure gap is one of the main constraints to economic growth to attract foreign investments • Bottlenecks are encountered in all modes of transport infrastructure and services: • poor condition of roads • lack of intraregional connectivity between the national road networks • unreliable and overall costly road transport services • unrealized high potential for rail and inland water freight transport which has led to the excessive use of road transport • inadequate road and rail connectivity of ports with the hinterland, and others.

  6. Promoting Logistics Connectivity • Past research stresses the importance of international trade to boost economic prosperity. • World Bank - Movement of goods and services across borders has grown tremendously in recent years accounting for over 45% of world GDP in 1990 - up from 25% in 1970 • The Economist - Manufactured goods as a percentage of total world exports increased from 55% in 1980 to 75% in 1990. Export accounted for 22% of GDP in East and Southeast Asia, 11% for South Asia and 10% for Latin America. • Zhu (2011) discovered a positive impact of logistics investment on regional economic growth in China especially in undeveloped interior provinces.

  7. FIATA’s Work with the UN • FIATA’s Top priority – To impact Sustainable Development Goals (SDGs) in the 2015 UN Post Development Agenda. • FIATA urging the 30-Member States Open Working on Sustainable Development to realize the importance of international trade in boosting economic prosperity when designing SDGs. • Shedding light on the importance of logistics connectivity as a contributor to economic growth and necessary component to be included in SDG design

  8. FIATA’s next move • FIATA – Attending the 7th Session OWG at the UN Headquarters in New York • FIATA proposes that the UN dedicate more space to discuss the contribution that logistics can make to sustainable development • Implementing strong policy focussed on logistics development may prove to be a far more effective initiative towards achieving the United Nations’ Sustainable Development Goals.

  9. THE WAY FORWARD • Who decides where public money should be invested in developing the logistics infrastructure. • Does the logistics industry have a say in it. • Fiata’s role.

  10. Thank you

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