Sudan, Falend a Kuma ; Meh a, Balwan Singh
Wo king Pape
Impac o ade acili a ion indica o s on ade lows
in anspo co ido s o CAREC egion and policy
implica ions
ADBI Wo king Pape , No. 1435
P o ided in Coope a ion wi h:
Asian De elopmen Bank Ins i u e (ADBI), Tokyo
Sugges ed Ci a ion: Sudan, Falend a Kuma ; Meh a, Balwan Singh (2024) : Impac o ade
acili a ion indica o s on ade lows in anspo co ido s o CAREC egion and policy implica ions,
ADBI Wo king Pape , No. 1435, Asian De elopmen Bank Ins i u e (ADBI), Tokyo,
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ADBI Wo king Pape Se ies
IMPACT OF TRADE FACILITATION
INDICATORS ON TRADE FLOWS IN
TRANSPORT CORRIDORS OF CAREC
REGION AND POLICY IMPLICATIONS
Falend a Kuma and Balwan Singh Meh a
No. 1435
Ma ch 2024
Asian De elopmen Bank Ins i u e
The Wo king Pape se ies is a con inua ion o he o me ly named Discussion Pape se ies;
he numbe ing o he pape s con inued wi hou in e up ion o change. ADBI’s wo king
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Sugges ed ci a ion:
Kuma , F. and B. S. Meh a. 2024. Impac o T ade Facili a ion Indica o s on T ade Flows
in T anspo Co ido s o CAREC Region and Policy Implica ions. ADBI Wo king Pape 1435.
Tokyo: Asian De elopmen Bank Ins i u e. A ailable: h ps://doi.o g/10.56506/THJR6573
Please con ac he au ho s o in o ma ion abou his pape .
Email: [email p o ec ed], [email p o ec ed]
Falend a Kuma is a p o esso a he Depa men o Economics o he Uni e si y o
Jammu, India. Balwan Singh Meh a is a p o esso a he Ins i u e o Human
De elopmen , Delhi, India.
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ADBI Wo king Pape 1435 Kuma and Meh a
Abs ac
The de elopmen o anspo co ido s and be e ade acili a ion enhance c oss-bo de
ade lows and s imula e economic in eg a ion ia s onge egional coope a ion. Agains
his backd op, his pape in ends o analyze he e ec o ade acili a ion indica o s (TFIs) on
ade lows in he Cen al Asia Regional Economic Coope a ion (CAREC) anspo co ido s
and o e policy implica ions o s eng hening ade acili a ion. Using he Co ido
Pe o mance Measu emen and Moni o ing TFIs da abase, an augmen ed g a i y model has
been es ima ed o examine he e ec o TFIs on bila e al ade lows in he CAREC coun ies
along CAREC anspo co ido s. The s udy e eals ha he TFIs in CAREC co ido s ha e
gene a ed a conside able posi i e impac on bila e al ade lows o he CAREC economies
hough luc ua ed o e ime. T ade imes and longe ime delays can inc ease ade cos s
and lowe ade. T ansac ion delays and insu icien in o ma ion, longe physical inspec ions,
inadequa e coo dina ion, and leng hy cus oms p ocedu es can nega i ely impac inbound
ade lows. Longe cus oms clea ance hampe s he quali y and p ices o ag icul u al expo s.
The he e ogenei y in he TFIs along CAREC co ido s is conside able and likely o ha e a
signi ican posi i e impac on bila e al ade lows in he CAREC economies. Wi h s onge
TFIs, egional in eg a ion and coope a ion among CAREC co ido economies along he
ou es is being bols e ed. Wi h be e TFIs in CAREC co ido economies, inwa d ade lows
a e likely o decline compa a i ely highe han he su ge in ou wa d ade lows. The bila e al
ade in lows a e likely o boos ade olume and can be used o he de elopmen o
in as uc u e and na u al esou ces. The e o e, he e is a need o suppo he CAREC
co ido economies o igo ously con ibu e o he de elopmen o anspo co ido s and
imp o e he TFIs o obus ade pe o mance. S onge egional economic coope a ion
should p omo e he de elopmen o no el echnologies, skills, and knowledge in o de o
imp o e he TFIs u he o be e ade pe o mance.
Keywo ds: ade acili a ion indica o s, ade lows, anspo co ido s, CAREC egion,
policy implica ions
JEL Classi ica ion: F13, F14, M48, P25, R41
ADBI Wo king Pape 1435 Kuma and Meh a
Con en s
1. INTRODUCTION .......................................................................................................... 1
2. REVIEW OF LITERATURE .......................................................................................... 2
3. THEORETICAL FRAMEWORK ................................................................................... 3
4. OBJECTIVES AND METHODOLOGY ......................................................................... 7
5. RESULTS AND DISCUSSION ................................................................................... 10
6. CONCLUSION AND POLICY IMPLICATIONS .......................................................... 17
7. LIMITATIONS AND FUTURE RESEARCH DIRECTION ........................................... 20
REFERENCES ...................................................................................................................... 21
ADBI Wo king Pape 1435 Kuma and Meh a
1
1. INTRODUCTION
T anspo co ido s p o ide a ne wo k o link economic hubs domes ically and
ac oss bo de s (Kalyuzhno a and Holzhacke 2021). A anspo co ido accen ua es
he in as uc u e, ade, and in es men in eg a ion o egional economies o inclusi e
g ow h and imp o ed wel a e (Vicke man 2002). Upg ading anspo co ido s
a ac s in es men in po en ial sec o s ini ially, ollowed by o he la en sec o s. The
de elopmen o anspo co ido s and be e ade acili a ion inc ease c oss-bo de
ade lows (Samad, Masood, and Ahmed 2023) and s imula e economic in eg a ion
h ough s onge egional coope a ion (Lai d and Venables 2017). T ade acili a ion
e e s o e ec i e and anspa en in o ma ion, egula ions, and bo de clea ance
p ocedu es o c oss-bo de mobili y o p oduc s (Ande son 1979). In a o mal sense,
ade acili a ion e e s o inc easing he passage, discha ge, and au ho iza ion and
shipmen o p oduc s (WTO 2001). In a na ow sense, ade acili a ion implies
smoo he mobili y o p oduc s ac oss bo de s wi h a educ ion in ansac ion cos s
linked o cus oms p ocedu es (WTO 2014), while in a b oad sense, ade acili a ion
includes e icien and anspa en egula ions, o icial p ocedu es, and cus oms
clea ance a bo de s (Moïsé and So escu 2013). TFIs such as anspo a ion and
ins i u ional in as uc u e (F ancois and Manchin 2013) and o icial p ac ices, cus oms
clea ance, and coope a ion (Hummels and Schau 2013; Zaki 2015) signi ican ly
impac ade lows. T ade cos s c ea e mo e signi ican obliga o y obs acles o
c oss-bo de ade han a i s (Ande son and Van Wincoop 2003). Delays in ime a
bo de c ossing poin s (BCPs) inc ease ade cos s and ading ime su ges wi h he
inc ease in o icial p ocedu es, which lowe s he expo alue speci ically o pe ishable
goods and high- ech p oduc s (Djanko , F eund, and Pham 2010; Volpe, Ca ballo, and
G aziano 2015).
Ex an s udies used na ow aspec s o ade acili a ion o analyze i s impac on ade
lows. T ade acili a ion eases he ade p ocess, inc eases c oss-bo de ade, and
boos s ade olume by educing ansac ion cos s linked o o icial p ocedu es a
bo de s. T ade acili a ion os e s economic g ow h (Anjande e al. 2020) and egional
in eg a ion (Sa aeimanesh and Jenkins 2021) h ough echnology ans e (Sakyi e al.
2017). Longe imes spen in cus oms clea ance can inc ease illegal en -seeking and
ade-linked b ibe y, and discou age expo s. Upg ading all ea u es o ade acili a ion
imp o es ade pe o mance and suppo s expo di e si ica ion, while long ime o
impo s and leng hy pape p ocedu es o expo s ad e sely impac ade ou comes.
Delays in he anspo a ion o pe ishable and elec onics pa s nega i ely impac
hei expo s, while be e ade acili a ion leads o smoo he mobili y o pa s and
componen s. Mode n bo de p ocedu es and ade acili a ion e o ms lowe ade
cos s signi ican ly and inc ease ade lows (Sa aeimanesh and Jenkins 2021).
T anspo a ion ba ie -induced ade delays a e signi ican ly g ea e in landlocked
Cen al Asian coun ies (Baniya and Kiyoshi 2022), while e icien ade acili a ion
p omo es ade lows (Ch is and Fe an ino 2011). Agains his backd op, his pape
in ends o analyze he impac o TFIs on ade lows in he Cen al Asia Regional
Economic Coope a ion (CAREC) anspo co ido s and o e policy implica ions o
s eng hening ade acili a ion.
This pape con ibu es o he ex an li e a u e in he ollowing ways. Fi s , he pape
p o ides a heo e ical amewo k consis ing o p inciples and componen s o ade
acili a ion, ade acili a ion measu es, goals and ca ego ies o ade acili a ion
measu es, and ypes and bene i s o TFIs, and compa es TFIs ad anced by he Wo ld
Bank, Wo ld Economic Fo um, O ganisa ion o Economic Co-ope a ion and
De elopmen (OECD), and Asian De elopmen Bank (ADB). Second, i p o ides
ADBI Wo king Pape 1435 Kuma and Meh a
2
desc ip i e analysis o TFIs and expo olume in he CAREC anspo co ido
economies. Thi d, he s udy p o ides empi ical e idence on he e ec o TFIs on
bila e al ade lows along he anspo co ido s o CAREC economies using an
augmen ed g a i y model u ilizing he no el da abase on he Co ido Pe o mance
Measu emen and Moni o ing (CPMM) TFIs. Fou h, he s udy o e s signi ican insigh s
ega ding he compa a i e implica ions o inbound and ou bound BCPs in de e mining
bila e al ade lows among he CAREC coun ies. Fi h, he pape ad oca es he need
o be e ade acili a ion in he CAREC membe coun ies and p o ides coun y-
speci ic policy ecommenda ions. Las ly, he pape ou lines he limi a ions o he s udy
and u u e esea ch di ec ion.
2. REVIEW OF LITERATURE
T ade acili a ion e o ms bene i open economies mo e han less open economies
(Jacks, Meissne , and No y 2008). T ade cos s a e subs an ially highe in de eloping
coun ies han de eloped coun ies (A is e al. 2016). T ade acili a ion educes
anspo a ion cos s and bene i s mo e de eloping coun ies (WTO and OECD 2017),
in luencing ade pe o mance and economic g ow h in A ican economies (Sakyi e al.
2017) and Asian coun ies (Ali and Shakoo 2020). The e ec i eness o po s, bo de
clea ance, egula ions, and e- ade posi i ely impac s ade lows in he Asia and he
Paci ic egion (Wilson, Mann, and O suki 2003). Ine icien ade p ocedu es nega i ely
impac in a-A ican ade (Kou y 2021).
The CAREC egion’s ade depends on anspo co ido s ia bo de ing na ions
o use seapo se ices (Raballand, Kun h, and Au y 2005). The ac o being
landlocked signi ican ly lowe s ade alue in CAREC coun ies (Mazhikeye , Edwa ds,
and Rizo 2015).In landlocked CAREC economies, ade gains a e smalle han in
coas al coun ies (Raballand 2003) due o g ea e anspo a ion cos s (A is,
Raballand, and Ma eau 2010), inadequa e in as uc u e, and weak ins i u ions (A is
e al. 2011). T ade-linked a i cos s a e signi ican ly highe in CAREC economies han
in o he Asian coun ies (UNESCAP 2018). In a egional ade cos s ha e declined
conside ably in CAREC economies in ecen yea s bu ha e emained highe han
na ional ade cos s, which makes i necessa y o lowe non a i cos s (ADB and
UNESCAP 2013).
Inadequa e ade acili a ion measu es due o bu eauc a ic impedimen s a co ido
bo de s lead o mo e subs an ial ade cos s han he emo eness o he CAREC egion
(Pom e 2017). The epe i ion o documen a ion clea ance and ine icien handling a
bo de s delay consignmen s (A is, Raballand, and Ma eau 2010), which ad e sely
a ec s he ag icul u al expo s in he CAREC egion and o ces he CAREC coun ies
o ade hei a m goods wi hin he egion, which causes unde u iliza ion o ag icul u al
ade capaci y (Kim and Ma iano 2020). Imp o emen s in ade acili a ion (G igo iou
2007) and ansi in as uc u e (Shephe d and Wilson 2006) can signi ican ly lowe
ansi imes and boos in a egional ade in he CAREC egion (Kim, Ma iano, and
Abesamis 2022).
Felipe and Kuma (2012) used he Logis ics Pe o mance Index (LPI) and ound ha
ade acili a ion and upg ading co ido s’ in as uc u e led o subs an ial ade gains in
he CAREC egion wi h conside able coun y-le el a ia ions. Tanabe, Shibasaki, and
Ka o (2016) used he Co ido Pe o mance Measu emen and Moni o ing (CPMM)
TFIs and e ealed ha imp o emen s in ade ansi acili ies can signi ican ly lowe
cos s and boos ade lows in he CAREC egion. Based on pe cep ion-based ading
ac oss bo de indica o s, Sha a eye a (2020) ound an op imis ic linkage be ween
ADBI Wo king Pape 1435 Kuma and Meh a
3
expo olume and ime. To al expo s a e mo e suscep ible o ime han cos in he
CAREC egion (Kim and Ma iano 2020), while Sha a eye a (2023) e ealed ha
expo s a e mo e signi ican ly a ec ed by ele a ed expo cos s han mo e expo ime.
In ecen yea s, ade pa e ns ha e al e ed conside ably in he CAREC egion by
linking he People’s Republic o China (PRC) and Eu asian coun ies ia Kazakhs an
(Pom e 2021) due o subs an ial in es men in he Bel and Road Ini ia i e (Pom e
2017). This can subs an ially inc ease he o al eal income in he CAREC egion by
signi ican ly lowe ing bo de c ossing imes and ade cos s (De Soy es e al. 2018)
compa ed o no el in es men in anspo a ion in as uc u e. The e o e, he
signi icance o TFIs in inc easing ade lows canno be o e emphasized in he CAREC
egion (Kim, Ma iano, and Abesamis 2022). Despi e he su ge in ade acili a ion
s udies, scan quan i a i e esea ch has analyzed he impac s o TFIs on ade lows
along anspo co ido s using he CPMM TFIs in he CAREC egion, which his pape
in ends o s udy.
3. THEORETICAL FRAMEWORK
A landlocked coun y aces a unique h ea o ade acili a ion due o i s speci ic
ba ie s as well as he ade acili a ion policies o he neighbo ing coun ies. T ade
cos s a e high in landlocked coun ies, which sugges ha he bene i s o ade
acili a ion e o ms can be subs an ial in such coun ies. Landlocked coun ies ace
inadequa e ansi in as uc u e, which hinde s ade lows (Raballand 2003; Ch is and
Fe an ino 2011) due o de iciency in o icial p ocedu es and ime delays a bo de
c ossings (F eund and Rocha 2011).
Figu e 1 shows he p inciples and componen s o ade acili a ion. T anspa ency
encou ages ingenuousness and esponsibili y h ough he dissemina ion o clea
ins uc ions o seek ad ice be o e implemen a ion, while simpli ica ion emo es
supe luous cons i uen s and epe i ions o essen ial ade p ocedu es. Ha moniza ion
suppo s domes ic ade p ac ices, p ocedu es, and pape wo k among s akeholde s
and s anda diza ion a ge s o emb ace global bes p ac ices (UNECE 2012). T ade
acili a ion concen a es on dissemina ing and go e ning ade policies, ins i u ing
ade egula ions and p ocesses, gene a ing goods s anda ds, de eloping ade
in as uc u e o lowe ade cos s, and ensu ing speedy bo de clea ance and sa e y
(ADB and UNESCAP 2013).
Figu e 1: P inciples and Componen s o T ade Facili a ion
Sou ce: Au ho ’s c ea ion based on UNECE 2012; ADB and UNESCAP 2013.
ADBI Wo king Pape 1435 Kuma and Meh a
4
T ade acili a ion measu es aim o inc ease c oss-bo de ade by ackling he
obs acles o imp o ing egula ions, p ocedu es, o mali ies, and cus oms clea ance
(Moïsé and So escu 2013). Figu e 2 displays ade acili a ion measu es. Landlocked
de eloping economies expe ience g ea e execu ion o ade acili a ion measu es
han leas -de eloped economies due o high anspa ency and be e egula ions,
ins i u ions, and coope a ion. T ade acili a ion measu es can help achie e sus ainable
and inclusi e g ow h (UNESCAP 2019). Figu e 3 shows he goals and ca ego ies
o ade acili a ion measu es. T ade acili a ion measu es such as domes ic ade
guidelines and p inciples, ading chain logis ics a angemen s, po in as uc u e and
se ices, and ade p ac ices di ec ly in luence cus oms ope a ions by lowe ing c oss-
bo de ade cos s, enhancing c oss-bo de ade p ocedu es, and p o ec ing bo de
sa e y. The ca ego ies o ade acili a ion measu es include simple and mo e e icien
ade egula ions, p ocesses, and pape wo k; ins i u ing a single window sys em; policy
and consul a ion o suppo na ional and c oss-bo de coope a ion; scien i ic backing
and expe knowledge o imp o e he unc ioning o bo de clea ance bodies; he
de elopmen o dedica ed so wa e, ha dwa e, and in o ma ion, communica ion, and
echnology appa a us; and he es ablishmen o ma e ial in as uc u e like po s.
Figu e 2: Measu es o T ade Facili a ion
Sou ce: Au ho ’s c ea ion based on UNESCAP 2019.
ADBI Wo king Pape 1435 Kuma and Meh a
11
Figu e 7: A e age Time Taken o Clea Bo de C ossing Poin s (h s)
in Six CAREC Co ido s
Sou ce: Au ho ’s c ea ion based on he CAREC CPMM da abase.
Table 3: Time Taken o Clea Bo de C ossing Poin s (h s)
Co ido
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
12.7
6.2
12.1
8.3
2.7
1.8
1.8
5.9
3.5
6.9
9.5
2
6.5
8.8
11.7
7.2
6.1
6.3
6.2
6.4
8.5
7.6
10.6
3
7.7
5.5
7.3
3.2
4.4
5.3
4.6
4.9
5.1
5.2
7.1
4
4.0
4.9
5.3
5.5
7.9
2.8
2.4
2.9
2.8
3.9
6.3
5
1.8
6.8
8.1
3.0
28.9
26.2
28.4
50.2
28.2
28.0
40.2
6
7.6
5.5
7.6
6.5
9.6
7.4
10.2
15.4
15.0
14.0
13.5
Inbound
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
14.0
7.0
11.0
9.0
2.0
2.0
2.0
7.0
3.0
7.0
9.0
2
7.0
10.0
15.0
10.0
9.0
8.0
7.0
8.0
10.0
9.0
13.0
3
9.0
6.0
9.0
4.0
7.0
8.0
5.0
6.0
5.0
6.0
8.0
4
4.0
5.0
5.0
6.0
8.0
3.0
2.0
3.0
3.0
4.0
7.0
5
2.0
7.0
9.0
4.0
35.0
32.0
31.0
54.0
31.0
30.0
43.0
6
8.0
6.0
9.0
8.0
12.0
9.0
11.0
17.0
16.0
15.0
15.0
Ou bound
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
11.0
6.0
14.0
8.0
3.0
2.0
2.0
5.0
3.0
7.0
10.0
2
6.0
8.0
9.0
5.0
3.0
5.0
5.0
5.0
7.0
6.0
8.0
3
7.0
5.0
5.0
2.0
2.0
3.0
4.0
4.0
5.0
5.0
6.0
4
4.0
5.0
6.0
6.0
8.0
3.0
3.0
3.0
3.0
4.0
6.0
5
1.0
6.0
7.0
2.0
22.0
20.0
26.0
47.0
25.0
26.0
37.0
6
7.0
5.0
6.0
5.0
7.0
5.0
9.0
14.0
14.0
13.0
12.0
Sou ce: Au ho ’s compila ion based on he CAREC CPMM da abase.
ADBI Wo king Pape 1435 Kuma and Meh a
12
Simila ly, he a e age cos incu ed a BCPs was highes o co ido 5, ollowed by
co ido s 6 and 1, while he a e age cos a BCPs o o he co ido s was ela i ely
lowe , ho e ing a ound US$100 (see Figu e 8). O e ime, he a e age cos a BCPs
o co ido 6 consis en ly declined, and his end was pa icula ly p onounced o
co ido 4 a e 2014, while he a e age cos a BCPs inc eased o co ido 5. On
he o he hand, he a e age cos a BCPs o he emaining co ido s luc ua ed,
expe iencing an inc ease in he ini ial pe iod om 2010 o 2013–2014, ollowed by a
decline un il 2018, and a subsequen inc ease in 2019 and 2020. The ise in he
a e age cos a BCPs o co ido 5 also esul ed om cos s associa ed wi h longe
bo de c ossing imes, as discussed in he abo e pa ag aph. Addi ionally, he cus oms-
ela ed bo de c ossing ee showed sligh luc ua ions a mos inbound BCPs and was
e lec ed in he p ice mo emen o he a e age cos a BCPs. Speci ically, he a e age
cos a inbound BCPs was ela i ely highe han a ou bound BCPs. The high bo de
c ossing ee also led o en -seeking beha io , whe e p ocedu es we e in en ionally
made cumbe some, compelling p i a e ope a o s o make uno icial paymen s a police
checkpoin s and inspec ions o a oid he high ansac ion cos s. The ecen inc ease
was a ibu ed o p olonged delays o inbound a ic complying wi h heal h and
sani a ion con ols due o COVID-19 (see Table 4 and CAREC Annual Repo s, 2015
o 2020).
Figu e 8: A e age Cos Incu ed a Bo de C ossing Poin s (US$)
Sou ce: Au ho ’s c ea ion based on he CAREC CPMM da abase.
ADBI Wo king Pape 1435 Kuma and Meh a
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Table 4: Cos Incu ed a Bo de C ossing Poin s (US$)
Co ido
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
744
928
1,234
1,450
1,123
1,069
981
753
1,129
1,092
1,788
2
595
714
540
610
513
522
521
521
595
662
563
3
524
1,196
1,076
2,245
2,348
1,559
951
573
546
606
728
4
1,552
1,683
1,322
1,437
1,126
992
1,302
1,167
1,805
1,491
1,510
5
352
1,602
1,547
2,393
2,050
2,008
1,835
1,513
708
706
650
6
939
967
729
1,150
769
1,276
931
866
836
823
717
Inbound
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
158
145
142
226
117
109
159
225
147
194
581
2
242
224
239
268
236
202
242
280
141
166
149
3
131
135
240
83
157
119
139
140
87
108
119
4
342
223
268
709
399
162
110
148
140
147
96
5
170
207
162
139
188
201
276
307
249
303
279
6
356
182
125
159
179
183
215
184
155
167
153
Ou bound
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
1
191
149
137
163
103
88
92
123
152
153
696
2
190
133
92
82
101
144
103
108
100
90
82
3
95
75
90
26
67
60
59
54
64
63
65
4
102
63
76
158
136
139
99
79
101
85
121
5
125
197
135
106
154
167
196
202
296
290
320
6
278
106
57
74
97
108
121
103
121
108
95
Sou ce: Au ho ’s compila ion based on he CAREC CPMM da abase.
Mo eo e , he a e age annual expo olume be ween 2010 and 2020 h ough
oad anspo among CAREC coun ies exhibi ed a ia ions, wi h co ido 5
(US$1706 million) eco ding he highes , ollowed by co ido s 1, 6, 2, and 4, and he
lowes a co ido 3 (US$29 million). O e ime, he expo olume o only co ido 5
consis en ly inc eased, while he expo olume o o he co ido s eco ded
luc ua ions. Ini ially, he e was an upwa d end in expo olume o mos o hese
co ido s in 2010–2015, ollowed by a decline in 2015–2017, and a subsequen
inc ease in 2018–2019, wi h a u he decline in 2020 (see Figu e 9). In gene al, he
CAREC coun ies demons a ed posi i e de elopmen s in e ms o expo s h ough
hese co ido s. Co ido 2 wi nessed he highes annual g ow h in expo s a a 14%
annual a e age g ow h a e, closely ollowed by co ido 6 wi h a 13% annual a e age
g ow h a e, co ido 4 wi h a 10% annual a e age g ow h a e, and co ido 3 wi h a
9% annual a e age g ow h a e, while he lowes g ow h was obse ed in co ido 1 a
7% and co ido 1 wi h a 6% annual a e age g ow h a e (see Table 5). This indica es a
dynamic and e ol ing pa e n in he ade landscape in oad anspo ac oss he
CAREC coun ies, wi h a ying deg ees o g ow h and pe o mance among he
di e en co ido s.
ADBI Wo king Pape 1435 Kuma and Meh a
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Figu e 9: Expo (million US$) by Road T anspo
Sou ce: Au ho ’s c ea ion based on he CAREC CPMM da abase.
Table 5: Expo Value (million US$) by Road T anspo
Co ido
1
2
3
4
5
6
2010
428
75
14
62
978
182
2011
439
134
19
110
1,373
370
2012
534
194
21
107
1,411
330
2013
646
183
22
110
1,568
385
2014
673
182
34
106
1,710
354
2015
553
151
38
85
1,806
339
2016
470
158
57
82
1,826
325
2017
560
212
31
89
1,945
395
2018
665
217
30
110
2,222
648
2019
766
234
28
119
2,083
562
2020
661
217
21
134
1,851
356
A e age
581
178
29
101
1,706
386
Sou ce: Au ho ’s compila ion om CAREC CPMM da abase.
Reg ession Analysis (Augmen ed G a i y Model)
The pooled eg ession esul indica es ha bo h he a e age ime and o al ime aken
a inbound and ou bound BCPs a e nega i ely ela ed o expo by oad anspo and
s a is ically signi ican (see Table 6), a e con olling he o he explana o y a iables
such as g oss domes ic p oduc , con igui y, colonial ela ions, and common language.
Howe e , he a e age ime a inbound BCPs in luenced bila e al ade lows among
CAREC coun ies mo e han a he ou bound BCPs. The coe icien o a e age ime a
inbound BCPs depic s ha a 10% decline in he ime aken a inbound BCPs could
inc ease bila e al ade lows by 1.06%, which is signi ican ly highe han a ou bound
BCPs (i.e., a 0.87% inc ease in ade lows).
ADBI Wo king Pape 1435 Kuma and Meh a
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Table 6: Impac o A e age Time a BCPs on Bila e al T ade (Pooled Reg ession)
Dependen Va iable Ln(Expo )
(1)
(2)
(3)
Con igui y
0.191
0.225
0.216
(0.023)
(0.019)
(0.021)
Numbe o BCPs passed
–0.027***
–0.027***
–0.029***
(0.012)
(0.012)
(0.011)
Colonial ela ionship
2.738***
2.787***
2.758***
(0.147)
(0.134)
(0.141)
Common language
0.209
0.210
0.207
(0.399)
(0.395)
(0.402)
Ln(GDP)
0.207***
0.207***
0.210***
(0.054)
(0.054)
(0.054)
Ln(A e age ime a inbound BCPs, in hou s)
–0.106*
(0.048)
Ln(A e age ime a ou bound BCPs, in hou s)
–0.087**
(0.054)
Ln(A e age o al ime a BCPs, in hou s)
–0.099*
(0.057)
Cons an
5.051***
5.051***
5.034***
(0.506)
(0.507)
(0.508)
Co ido dummies
Yes
Yes
Yes
No. o obse a ions
1,058
1,055
1,060
R-squa ed
0.969
0.970
0.970
Adjus ed R-squa ed
0.966
0.966
0.966
S anda d e o s in pa en heses; * p<0.05, ** p<0.01, *** p<0.001.
No es: (i) Mongolia and he PRC emb ace a colonial his o y, and (ii) he Ky gyz Republic and Kazakhs an ha e Russian
as a common o icial language.
Sou ce: Au ho ’s compu a ion.
Simila ly, he eg ession esul s e eal ha he impac o ade cos s incu ed has he
expec ed s a is ically signi ican nega i e ela ionship wi h bila e al expo by oad
anspo (see Table 7) a e con olling he o he explana o y a iables such as g oss
domes ic p oduc , con igui y, colonial ela ions, and common language. The eg ession
esul s demons a e ha cos incu ed a inbound BCPs has a s a is ically signi ican
coe icien . Howe e , he coe icien s associa ed wi h ade cos s a ou bound BCPs
display a nega i e bu no s a is ically signi ican sign. In pa icula , he coe icien o
inbound BCPs’ a e age cos is highe - han-a e age ime, sugges ing ha he o me is
a mo e impo an ac o han he la e in impac ing he ade lows wi h he CAREC
economies. Fu he mo e, he o he independen a iables, such as dis ance and
numbe o BCPs, exhibi he an icipa ed nega i e coe icien s in ela ion o bila e al
expo s. Rema kably, he numbe o BCPs p esen s a s a is ically signi ican and
nega i e co ela ion wi h bila e al ade. This implies ha a highe p esence o BCPs
along he co ido s is less likely o con ibu e o a smoo h low o ca go mo emen ,
esul ing in inc eased ime and cos s, and subsequen ly leading o a lowe ade
olume. In e es ingly, he coun ies sha ing a common his o ical backg ound wi hin
he CAREC egion display highe bila e al ade lows han o he s. Ne e heless, he
p esence o a common o icial language and con igui y among coun ies does no
eme ge as a signi ican ac o in luencing he bila e al ade dynamics. In addi ion,
he coun ies wi h a highe GDP also eco ded highe bila e al ades among he
CAREC coun ies.
ADBI Wo king Pape 1435 Kuma and Meh a
16
Table 7: Impac o A e age Cos a BCPs on Bila e al T ade (Pooled Reg ession)
Dependen Va iable Ln(Expo )
(1)
(2)
(3)
Con igui y
1.011
1.021
1.041
(0.112)
(0.121)
(0.115)
Numbe o BCPs passed
–0.033**
–0.209***
–0.033**
(0.012)
(0.010)
(0.020)
Colonial ela ionship
0.608***
0.605***
0.645***
(0.167)
(0.169)
(0.166)
Common language
0.403
0.501
0.371
(0.401)
(0.600)
(0.431)
Ln(GDP)
0.227***
0.225***
0.227***
(0.054)
(0.053)
(0.054)
Ln(A e age cos a inbound BCPs, in US$)
–0.142**
(0.086)
Ln(A e age cos a ou bound BCPs, in US$)
–0.051
(0.086)
Ln(A e age o al cos a BCPs, in US$)
–0.024
(0.091)
Cons an
4.183***
6.093***
4.236***
0.627
0.729
0.634
Co ido dummies
Yes
Yes
Yes
No. o obse a ions
1,055
1,058
1,060
R-squa ed
0.969
0.969
0.969
Adjus ed R-squa ed
0.965
0.965
0.965
S anda d e o s in pa en heses; * p<0.05, ** p<0.01, *** p<0.001.
No es: (i) Mongolia and he PRC emb ace a colonial his o y, and (ii) he Ky gyz Republic and Kazakhs an ha e Russian
as a common o icial language.
Sou ce: Au ho ’s compu a ion.
The abo e-discussed eg ession esul s o e aluable insigh s abou he ela i e
signi icance o inbound and ou bound BCPs in shaping bila e al ade lows among he
CAREC economies. The impac o inbound BCPs appea s o ha e a g ea e in luence
han hei ou bound coun e pa s, pa icula ly he in luence o he a e age cos and
ime aken a inbound BCPs when conside ing impo ing na ions. This aspec has an
impo an ole in d i ing bila e al ade lows among he CAREC coun ies, as opposed
o he a e age cos and ime aken a ou bound BCPs, which pe ains o expo ing
na ions. This asymme y in signi icance is p ima ily unde pinned by he inhe en
cha ac e is ics o inbound BCPs. A hese en y poin s, delays esul in escala ed ade
cos s. I is impo an o poin ou ha inbound ca go ypically con ends wi h unique
dynamics, including la ge shipmen olumes, smalle ca go cha ges a ibu ed o
compe i i e p essu es, and educed ees on oad anspo a ion in compa ison o
ou bound ca go. As a esul o hese ac o s, he e exis s a p opensi y o inbound
ca go o adop an app oach o o e loading o compensa e o subs an ial cos s.
The ca go ope a o s a emp o e loading o maximize ope a ional e iciency and
e u ns and minimize ehicle ope a ion and main enance cos s (Te a anin ho n and
Raballand 2009). O e loading is e aded by making uno icial paymen s a police
checkpoin s and inspec ions o a oid he high ansac ion cos s (Pina d 2010).
Mo eo e , he penal ies o egula e ehicle o e loading seem inadequa e o es ain
he iola o s. This p ac ice o o e loading, hough d i en by economic incen i es,
in oduces a se ies o challenges. The p essu e exe ed on in as uc u e due o excess
ADBI Wo king Pape 1435 Kuma and Meh a
17
ca go weigh can gi e ise o de e io a ion in oad condi ions, he eby exace ba ing
oad sa e y isks. This conce n is echoed in a s udy by UNOHRLLS (2007), sugges ing
ha he in e play be ween o e loading p ac ices d i en by economic mo i es and
po en ial in as uc u e deg ada ion poses a no able challenge o oad sa e y. The
ope a ion and main enance cos s o anspo co ido s a e likely o su ge along he
ou es and jeopa dize sus ainabili y and e iciency. The op ion o cos eco e y om
he anspo ope a o s is expec ed o d i e up hei ope a ional cos s. The anspo
co ido au ho i ies can o load he o e loaded ucks. Howe e , o loading ca goes is
almos un easible and may inc ease he p ocedu al menace and delays. The e seems
o be ins i u ional laxi y and inadequa e egula o y capaci y o s ic ly adhe e o
o e loading ules and e icien moni o ing o weighing s a ions (Wo ld Bank 2007).
The e o e, domes ic egula ions on axle loads in he CAREC membe coun ies should
be igo ously en o ced o ge id o he menace o o e loading o ucks along he
CAREC anspo co ido ou es. O e loading can be checked by emb acing no el
digi al echnologies o en o ce an au oma ed weigh managemen sys em. The oll
cha ges should be le ied equi ably in acco dance wi h au hen ic anspo co ido use
(Bane jee and P ozzi 2015). O e loaded ucks should be le ied ees in e ms o hei
eal damage o co ido in as uc u e using he widely applied oll-by-weigh scheme
(Hang, Xie, and He 2013).
In summa y, he eg ession esul s emphasize he pi o al ole o inbound BCPs and
hei associa ed ime delays and cos in shaping ade lows among he CAREC
coun ies. The in ica e in e play be ween ade cos dynamics, ca go cha ac e is ics,
and in as uc u e in eg i y unde sco es he complexi y o managing hese ac o s
o op imize ade among CAREC economies, while sa egua ding oad sa e y and
sus ainable anspo a ion sys ems.
6. CONCLUSION AND POLICY IMPLICATIONS
TFIs in he CAREC co ido s ha e gene a ed a conside able posi i e impac on he
bila e al ade lows o he CAREC economies hough luc ua ed o e ime. T ade imes
and longe ime delays can inc ease ade cos s and lowe ade. T ansac ion delays
and insu icien in o ma ion, longe physical inspec ions, inadequa e coo dina ion, and
leng hy cus oms p ocedu es can nega i ely impac inbound ade lows. Longe
cus oms clea ances hampe he quali y and p ices o ag icul u al expo s. The
he e ogenei y in he TFIs along he CAREC co ido s is conside able and likely o ha e
a signi ican posi i e in luence on bila e al ade lows in he CAREC economies. Wi h
obus TFIs, egional in eg a ion and coope a ion be ween CAREC co ido economies
along he ou es is being bols e ed. Wi h be e TFIs in he CAREC co ido economies,
inwa d ade lows a e likely o decline compa a i ely mo e han su ges in ou wa d
ade lows. The bila e al ade in lows a e likely o boos ade olume and can be used
o he de elopmen o in as uc u e and na u al esou ces.
De eloping s onge TFIs along he CAREC co ido s can esul in a signi ican posi i e
impac on he bila e al ade pe o mance in he CAREC economies. The e o e, he
CAREC co ido economies should be igo ously suppo ed o bols e anspo
co ido de elopmen and imp o e TFIs o obus ade pe o mance. This can help
he CAREC co ido economies o spo ela i e bene i s in esou ces and ma ke s
along he ou es and imp o e poo in as uc u e h ough subs an ial in es men in
anspo co ido p ojec s. S onge egional economic coope a ion should p omo e he
de elopmen o no el echnologies, skills, and knowledge o imp o e he TFIs u he
o be e ade ou comes. Mo eo e , de eloping economies in he CAREC co ido s
expe ience mo e di e en ial in luence o he TFIs on ade lows han compa a i ely
ADBI Wo king Pape 1435 Kuma and Meh a
18
mo e de eloping economies along he ou es, which signi ies ha he CAREC co ido s
can ease dispa i y in he in e na ional di ision o labo be ween de eloping and mo e
de eloped economies. The e o e, egional economic coope a ion among he CAREC
co ido economies should also cen e on he he e ogenei y o he TFIs in de eloping
and mo e de eloped economies along he ou es.
T ade acili a ion e o ms a e necessa y o bols e he bo de clea ance mechanisms
and d as ically educe ade cos s, which en ail educing cus oms documen a ion, ime,
and eal cus oms clea ance cos s. Mo e anspa ency in o icial communica ions and
egula ions can lowe delays in ade lows. The ins i u ional and o ganiza ional
de elopmen o bo de agencies should be implemen ed o minimize ade imes and
acili a e smoo he c oss-bo de ade. The a ionalized cus oms p ocedu es and
physical e i ica ion o ade documen s acili a e as mobili y o p oduc s a bo de s.
The p e-a i al e i ica ion o cus oms documen s can smoo h goods mobili y a
bo de poin s. In o ma ion and da a sha ing among bo de agencies can acili a e
s onge coope a ion o cus oms adminis a ion. T ade acili a ion e o ms should
ocus on ec ui ing and e aining ained manpowe and boos eamwo k among
bo de bu eauc acy o bols e bo de agencies. The cus oms bu eauc acy should be
incen i ized o build anspa ency and accoun abili y o achie e in en ions o ade
acili a ion e o ms and o educe leakages.
Robus cus oms in as uc u e and logis ics, including digi aliza ion o cus oms
p ocedu es, can signi ican ly educe he cos s o ade and inc ease c oss-bo de ade.
The use o ICT appa a us o o icial cus oms p ocedu es can lowe ade delays
and imp o e he anspa ency o cus oms ope a ions. Building he capaci y o he
bo de adminis a ion is essen ial o implemen digi aliza ion o cus oms p ac ices. A
single window sys em can educe ime delays and ade cos s, and boos ade lows
conside ably. The Au ho ized Economic Ope a o (AEO) scheme can educe bo de
clea ance imes, inc ease expo s, and acili a e expo di e si ica ion.
T ade acili a ion e o ms a e essen ial o he en o cemen o cos -e ec i e cus oms
p ocedu es and coope a ion o bo de agencies o minimize en s. Expenses o
le e age au oma ed cus oms clea ance, da a, exchange, single windows, digi al
equipmen , and capaci y building should be cu ailed o lowe ade cos s using e icien
and anspa en s a egies. The sus ainabili y o ade acili a ion e o ms equi es
capaci y building o impel changes and iden i y and ackle no el p oblems ha may
eme ge in he u u e. This en ails he capaci y building o highe - anked o icials in
bo de agencies o esco and ca y ade acili a ion e o ms. T ade acili a ion e o ms
o bols e bo de agencies should be e alua ed o asce ain impac and o e co ec i e
measu es. T ade acili a ion measu es can en ail no el legisla ion o e ise a ailable
laws. This equi es ime and specialized o icials o e alua e a ailable egula ions,
gua an ee eliabili y and consis ency wi h exis ing na ional s a egy policies, and
analyze likely unplanned e ec s on di e en clien s.
Coun y-speci ic Recommenda ions
In he ollowing pa ag aphs, coun y-speci ic policy ecommenda ions a e p o ided:
A ghanis an: Clea ca go ules and ansi cha ges should be implemen ed o add ess
ague ansi and o icial p ac ices along co ido 2. The AEO scheme should be
implemen ed o educe he bo de clea ance ime o unlaw ul ca goes om A ghanis an
o neighbo ing coun ies. G een lanes should be ins i u ed o acili a e he i ms’
ca goes ope a ed h ough he AEO o smoo he bo de c ossing.
ADBI Wo king Pape 1435 Kuma and Meh a
19
Geo gia: A sys em o common cus oms managemen a BCPs along co ido 3 should
be de eloped o minimize delays o ca goes o bo de ing na ions. No el and apid
di ec oad anspo ou es equipped wi h obus ha d and so in as uc u es
should be cons uc ed o connec Geo gia wi h Tajikis an h ough Tu kmenis an a he
han Kazakhs an o ealize cos -e ec i eness and minimize delays a BCPs. New
ag eemen s on educed ca go ansi ees should be inked be ween Geo gia and
Tajikis an o equalize he ansi cha ges wi h he Ky gyz Republic and Uzbekis an a
simila BCPs.
Kazakhs an: In Kazakhs an, he compe ence o bo de clea ance o icials should be
enhanced o lowe he ansi in e up ion and wai ing ime a BCPs along co ido 1,
due o physical au hen ica ion o ca goes, which en ails ins i u ing uck scanne s o
e icien inspec ion. The oad anspo ees on he heigh ened- a ic U umqi–Alma y
ou e should be diminished and equalized wi h he lowe cha ges on he PRC-XUAR
ou e in co ido 4. Ins i u ional changes a e equi ed o implemen con aine iza ion
in a mul imodal anspo a ion sys em o achie ing highe unc ional e ec i eness.
No el laws and ins i u ions should be de eloped o execu e he p ac ical applica ion
o he e-Ca iage o Goods by Road sys em. The capaci y building o he echnical
and logis ics wo k o ce should be implemen ed in bols e ing bo h he ha d and
so in as uc u es.
Ky gyz Republic: The Ky gyz Republic should subs an ially inc ease no el in es men
in cold-chain in as uc u e along co ido 3 o os e pe pe ual expo s o ag icul u al
and ho icul u al p oduc s. The go e nmen should make subs an ial e o s o
p o oundly me ge ade and anspo aspec s in o he Eu asian Economic Union
ocusing on digi al pape s and ICT p ac ices o abolish excessi e pape wo k.
Mongolia: The o icial bo de clea ance p ac ices should be os e ed o speedie
ansi o pe ishable goods along he Mongolia-PRC ansi poin s in co ido 4. In he
case o high- alue and hea y machine y and equipmen , he ans e o oad eigh o
ail ca go including cus oms p ocedu es causes delays and inc eases he cos a
bo de c ossings. The e o e, subs an ial in es men should be made in ail anspo
de elopmen o cos -e icien ansi o hea y goods om Mongolia o he PRC.
Pakis an: A single window sys em should be implemen ed in Pakis an o smoo he
ansi o ca goes om A ghanis an along co ido 5 o educe s oppages a seapo s.
Pakis an should implemen he ecip ocal AEO scheme wi h economies along
co ido 5 o inc ease he e ec i eness o ansi ade. The In e na ional Road
T anspo (TIR) pa ks should be de eloped o ackle la ge a ic lows a BCPs and
minimize he ime o ca go o c oss bo de s. Rail anspo should be s eng hened o
educe anspo cos and enhance he quali y and alue o ag icul u al expo s.
Tajikis an: Tajikis an should eplace he cus oms guide o TIR ca goes by ins i u ing a
global posi ioning sys em o signi ican ly educe ade ansi cos s along co ido 6.
Illegal ca goes om A ghanis an should be supe ised using no el digi al echniques
like digi al s amping and sma scanne s o educe he ansi ime a BCPs. Tajikis an
should also implemen he AEO scheme as well as g een lanes o smoo he ansi o
ucks loaded wi h ag icul u al and ho icul u al goods.
Tu kmenis an: Tu kmenis an should os e he echnical and manage ial skills o
logis ics ope a o s in supply-chain and cold-chain managemen o achie e ade cos
e iciency along co ido 6. Tu kmenis an should upg ade he ha d in as uc u e and
mode nize he so in as uc u e a BCPs o educe delays. The AEO scheme should
also be p ac iced on a ecip ocal basis among bo de ing coun ies.
ADBI Wo king Pape 1435 Kuma and Meh a
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Uzbekis an: Uzbekis an should ins all digi al scanne s o as e ca go e i ica ion,
aise he numbe o access lanes o BCPs, and c ea e mo e g een lanes o educe
delays a BCPs along co ido 3. Uzbekis an should eno a e he ha d in as uc u e
and in eg a e digi al echnologies o upg ade so in as uc u e a cus om clea ance
poin s o educe he ime a bo de c ossings along co ido 6.
7. LIMITATIONS AND FUTURE RESEARCH DIRECTION
Da a inadequacy is one o he majo limi a ions con on ed by his s udy. Gene ally, he
CPMM TFIs da a a e a ailable o he CAREC coun ies. The TFIs o coun y pai s
can be cap u ed o complemen he bila e al ade lows along he CAREC co ido
coun ies. Regula da a a e a ailable only o ime and cos indica o s o ade
acili a ion a BCPs o e he pe iod. The equency o CPMM TFIs da a is a ailable on
a yea ly basis, and in some cases i is a ailable on a qua e ly basis, which es ic s he
analysis o pooled eg ession only. The da a on ail anspo a e a ailable o a ew
BCPs only, which is insu icien o pe o m a de ailed assessmen . E en da a on oad
anspo a e a ailable o 61 BCPs agains he sample o 76 BCPs o mos o he
yea s since 2010 and oad anspo is used o 70% o ade along he CAREC
co ido coun ies (ADB 2018). The e o e, analysis o TFIs has been done o oad
anspo only. The compa a i e da a on impo s a e sca ce; he e o e, his s udy has
ocused on expo s only. Keeping hese limi a ions in mind, u u e esea ch s udies can
aim o analyze he e ec s o TFIs on bila e al ade lows along bo h oad and ail
anspo a ion ou es as well as analyzing he impac o TFIs on bo h impo s and
expo s along he CAREC anspo co ido economies.
