{"id":716,"date":"2008-07-17T19:11:50","date_gmt":"2008-07-18T00:11:50","guid":{"rendered":"http:\/\/blog.minaret.org\/?p=716"},"modified":"2008-07-20T16:44:30","modified_gmt":"2008-07-20T21:44:30","slug":"trade-facilitation-ideas-aim-to-help-those-who-need-trade-most-but-will-it-work-in-the-very-worst-of-scenarios","status":"publish","type":"post","link":"https:\/\/blog.minaret.org\/?p=716","title":{"rendered":"Trade Facilitation Ideas Aim to Help Those Who Need Trade Most&#8211;But will it work in the very worst of scenarios?"},"content":{"rendered":"<p><meta http-equiv=\"Content-Type\" content=\"text\/html; charset=utf-8\" \/><meta name=\"ProgId\" content=\"Word.Document\" \/><meta name=\"Generator\" content=\"Microsoft Word 10\" \/><meta name=\"Originator\" content=\"Microsoft Word 10\" \/>\n<link rel=\"File-List\" \/><!--[if gte mso 9]><xml>  <w:WordDocument>   <w:View>Normal<\/w:View>   <w:Zoom>0<\/w:Zoom>   <w:Compatibility>    <w:BreakWrappedTables\/>    <w:SnapToGridInCell\/>    <w:WrapTextWithPunct\/>    <w:UseAsianBreakRules\/>   <\/w:Compatibility>   <w:BrowserLevel>MicrosoftInternetExplorer4<\/w:BrowserLevel>  <\/w:WordDocument> <\/xml><![endif]--><!--[if !mso]><object  classid=\"clsid:38481807-CA0E-42D2-BF39-B33AF135CC4D\" id=ieooui><\/object> \n\n<style> st1\\:*{behavior:url(#ieooui) } <\/style>\n\n <![endif]--><\/p>\n<style> <!--  \/* Font Definitions *\/  @font-face \t{font-family:Calibri; \tmso-font-alt:\"Century Gothic\"; \tmso-font-charset:0; \tmso-generic-font-family:swiss; \tmso-font-pitch:variable; \tmso-font-signature:-1610611985 1073750139 0 0 159 0;}  \/* Style Definitions *\/  p.MsoNormal, li.MsoNormal, div.MsoNormal \t{mso-style-parent:\"\"; \tmargin-top:0in; \tmargin-right:0in; \tmargin-bottom:10.0pt; \tmargin-left:0in; \tline-height:115%; \tmso-pagination:widow-orphan; \tfont-size:11.0pt; \tfont-family:Calibri; \tmso-fareast-font-family:Calibri; \tmso-bidi-font-family:\"Times New Roman\";} a:link, span.MsoHyperlink \t{color:blue; \ttext-decoration:underline; \ttext-underline:single;} a:visited, span.MsoHyperlinkFollowed \t{color:purple; \ttext-decoration:underline; \ttext-underline:single;} @page Section1 \t{size:8.5in 11.0in; \tmargin:1.0in 1.25in 1.0in 1.25in; \tmso-header-margin:.5in; \tmso-footer-margin:.5in; \tmso-paper-source:0;} div.Section1 \t{page:Section1;} --> <\/style>\n<p><!--[if gte mso 10]> \n\n<style>  \/* Style Definitions *\/  table.MsoNormalTable \t{mso-style-name:\"Table Normal\"; \tmso-tstyle-rowband-size:0; \tmso-tstyle-colband-size:0; \tmso-style-noshow:yes; \tmso-style-parent:\"\"; \tmso-padding-alt:0in 5.4pt 0in 5.4pt; \tmso-para-margin:0in; \tmso-para-margin-bottom:.0001pt; \tmso-pagination:widow-orphan; \tfont-size:10.0pt; \tfont-family:Calibri; \tmso-fareast-font-family:Calibri;} <\/style>\n\n <![endif]--><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">On July 11<sup>th<\/sup> I had the privilege of attending CATO\u00e2\u20ac\u2122s Capitol Hill briefing on the merits of <a href=\"http:\/\/www.freetrade.org\/files\/pubs\/pas\/tpa-037.pdf\">trade facilitation for encouraging economic growth<\/a>. on behalf of the Minaret of Freedom Institute. Cato trade policy analyst Daniel Ikenson and World Bank economist Simeon Djankov touted trade facilitation (TF) policies\u00e2\u20ac\u201dincluding streamlined administrative procedures and infrastructure\u00e2\u20ac\u201das beneficial for both industrialized countries as well as developing ones. The benefits of trade for developing countries <a href=\"http:\/\/www.imf.org\/external\/np\/exr\/ib\/2001\/110801.htm\">are unquestionable<\/a>. I agree, it would therefore make sense to pursue trade facilitation policies geared at making the most of that beneficial trade. <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\" \/><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">However, from what I gathered from Friday\u00e2\u20ac\u2122s presentation, Ikenson and Djankov consider trade facilitation the decisive factor in a country\u00e2\u20ac\u2122s ability to develop, and I wonder how well the argument for trade facilitation stands when the very countries needing the benefits of trade most lack in the first place those policies and infrastructures Ikenson and Djankov suggest they amend. Take, for example, <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">: years of ongoing war and instability have certainly mutilated structures of both trade and government. <\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">First, the administrative structure, where it exists at all, is fractious at best. Charged with the assisting the reconstruction of a new Afghan government, the <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">U.S.<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> has <a href=\"http:\/\/muse.jhu.edu\/demo\/washington_quarterly\/v023\/23.1khalilzad.html\">stressed security issues<\/a> and thus promoted a strong, Kabul-centered government. In an ethnically divided country where <a href=\"http:\/\/www.cacianalyst.org\/?q=node\/109\">regional rule<\/a> has historically prevailed, it comes as no surprise years later to see the <a href=\"http:\/\/www.iht.com\/articles\/2006\/08\/22\/news\/karzai.php\">lack of affinity<\/a> afforded a central government that has too often resorted to corruption and <a href=\"http:\/\/www.eurasianet.org\/departments\/insight\/articles\/eav051103.shtml\">favoritism<\/a>. With such little confidence in a national government, how can one expect any liberal internal trade policies pursued to be uniform and, more importantly, respected? <\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Second, after years of war, there exists little infrastructure at all to speak of, and any improvements would quite literally be made from the ground up. Furthermore, the geography of the country itself creates additional challenges to a policy of development. The <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Hindu Kush<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> mountain range, located in the very middle of the country, is the main geographic feature inhibiting transportation of goods. An <a href=\"http:\/\/www.usaid.gov\/stories\/afghanistan\/cs_afghan_road.html\">internal road system is lacking<\/a>. <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> does have a highway network encircling the mountain range. However, much of the so dubbed the \u00e2\u20ac\u0153Ring Road\u00e2\u20ac\u009d passes through <a href=\"http:\/\/www.longwarjournal.org\/images\/Afgh-NATO-Map-2008-thumb-thumb.JPG\">Taliban territory<\/a>, and after years of war and neglect conditions have deteriorated so much that one can only drive <a href=\"http:\/\/www.gpsworld.com\/gpsworld\/Application+Challenge\/LiDAR-on-the-Level-in-Afghanistan\/ArticleStandard\/Article\/detail\/173966\">10 km\/hour<\/a> in some sections. <\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Simply speaking, the geographic and political situation of <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> is a trading nightmare. <\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">While the <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">U.S.<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> has contributed <a href=\"http:\/\/news.bbc.co.uk\/2\/hi\/asia-pacific\/6964429.stm\">$37 million<\/a> toward a bridge spanning the <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Panj<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">River<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> to facilitate trade between <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> and <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Tajikistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">, ease of trade between <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">\u00e2\u20ac\u2122s North and South areas has yet to be addressed. While top-down security operations <a href=\"http:\/\/news.bbc.co.uk\/2\/hi\/south_asia\/7460556.stm\">are underway<\/a> to counter the rebirth of Taliban forces, <a href=\"http:\/\/afp.google.com\/article\/ALeqM5iZMOLb3IXyqT-nz7CAQhI-UNFreQ\">resistance is still growing<\/a> and conditions are still not friendly for trade. While public\/private partnerships might help build new infrastructure, it is hard to imagine that the average Afghan with a $1000 GDP per capita can afford to contribute their income to the massive government expenditures required by Ikenson and Djankov\u00e2\u20ac\u2122s recommendations. While foreign investment, as an alternative, might contribute to the construction needed, it is hard to imagine still that any company in its right mind would invest in a nation plagued by instability, or that any foreign government would find reason to voluntarily abet easier shipment of Afghanistan\u00e2\u20ac\u2122s <a href=\"http:\/\/www.adb.org\/Documents\/Periodicals\/ADB_Review\/2005\/vol37-6\/opium-economy.asp\">opium exports<\/a>.<\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">So how would one even begin to consider trade facilitation policies? Citing Robert Guest\u00e2\u20ac\u2122s experience following a beer truck that was horrendously stalled in <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Cameroon<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> due to inefficient checkpoints and corrupt officers, Ikenson obviously read <em><a href=\"http:\/\/www.futurecasts.com\/Book%20review%208-4.htm\">The Shackled Continent<\/a><\/em>. However, he must have forgotten the take-home message: a country needs good governance. <\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">The opium poppy <a href=\"http:\/\/www.economist.com\/world\/asia\/displaystory.cfm?story_id=11591396\">is not a safe crop<\/a> option for the Afghan farmer. Cultivation of it continues, however, because it is simply <a href=\"http:\/\/chayes.blogs.nytimes.com\/2006\/07\/20\/why-farmers-grow-poppies\/\">more profitable than grapes<\/a> in the current market. Bad government is the same way. It, too, continues because someone along the line profits. In the case of <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">, it is the <a href=\"http:\/\/www.antiwar.com\/orig\/lohdi.php?articleid=12074\">American-installed group<\/a> ruling <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Kabul<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> that stands to gain. In my conversation with Djankov after the lecture, he insisted that <\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Afghanistan<\/span><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\"> has untapped opportunities in <a href=\"http:\/\/www.rootsofpeace.org\/press\/2004\/2004\/05\/press-2004-may-12.html\">dried fruits and vineyards<\/a>, as well as <a href=\"http:\/\/afp.google.com\/article\/ALeqM5iFrOtnNs42obPsi8ul_AHEXmOGzQ\">natural resources<\/a> in marble and gold. If anyone should ever expect those to be viable economic activities, they should first consider a government with a federalist-style configuration and <a href=\"http:\/\/www.junbish.org\/afghanistan_can_learn_from_its_p.htm\">strong local autonomy<\/a> to answer questions of security and government accountability.<\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Trade facilitation is important but it is by no means a comprehensive solution to developmental challenges. Rather, a base of infrastructure and governance must first exist before one can expect TF policies to be implemented fruitfully.<\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-size: 10pt; line-height: 115%; font-family: Arial\">Kasia Rada<br \/>\nMinaret of Freedom Institute Intern<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On July 11th I had the privilege of attending CATO\u00e2\u20ac\u2122s Capitol Hill briefing on the merits of trade facilitation for encouraging economic growth. on behalf of the Minaret of Freedom Institute. Cato trade policy analyst Daniel Ikenson and World Bank economist Simeon Djankov touted trade facilitation (TF) policies\u00e2\u20ac\u201dincluding streamlined administrative procedures and infrastructure\u00e2\u20ac\u201das beneficial for [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-716","post","type-post","status-publish","format-standard","hentry","category-intern"],"_links":{"self":[{"href":"https:\/\/blog.minaret.org\/index.php?rest_route=\/wp\/v2\/posts\/716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.minaret.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.minaret.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.minaret.org\/index.php?rest_route=\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.minaret.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=716"}],"version-history":[{"count":0,"href":"https:\/\/blog.minaret.org\/index.php?rest_route=\/wp\/v2\/posts\/716\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.minaret.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.minaret.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.minaret.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}