Could you imagine a world where online chat platforms become the primary source of information for truckers on how to get across borders? This blog follows the Subregional SDG Forum hosted in September 2020 by the ESCAP Sub regional Office for North and Central Asia. Its sixth session on resilient supply chains included Yelena Vassilevskaya, a project manager at Kazakhstan Freight Forwarders Association, who spoke about how private sector freight companies were forced to turn to WhatsApp and other messaging services to share the information they found with each other.
Since COVID-19 infection rates started to increase in Spring 2020, all countries in North and Central Asia (NCA) set up new restrictions on movement. This meant export bans and quotas for essential goods (food, medicine, and medical/protective equipment) and travel restrictions for people both inside and outside their countries.
As for the movement of goods, almost all temporary barriers related to COVID-19 had been lifted in NCA by November 2020. Instead, most countries have raised import tariffs for the same products. At the same time, restrictions on the movement of people vary in the sub region. As shown in Figure 1, Georgia, Kyrgyzstan, and Tajikistan have already changed restrictions on movement of people nine times between January and September 2020.
Figure 1: Number of notable changes in travel restrictions, NCA, Jan. – Sept. 2020
These rapid policy changes increase demand for updated restriction information. Many freight businesses in the subregion turned to informal platforms for sharing information within their networks, since the measures taken by countries changed so quickly and were often not available in official sources. Problematically, such information may prove unverifiable or false without clear responsible providers. Some may also find themselves outside such networks.
But why is the logistical situation in NCA especially difficult?
Countries in the sub region are more vulnerable due to location - far from oceans and their trade routes: seven of the nine NCA countries are landlocked developing countries (LLDCs), many close to Eurasia’s ‘pole of inaccessibility’ (point of land furthest away from Oceans).
The Vienna Programme of Action, adopted at the Second UN Conference on Landlocked Developing Countries, indicated key challenges for LLDCs as: border crossings with higher trade costs (in NCA up to double that of coastal countries), uncertainty of delivery time, dependency on neighbors, weak infrastructure, and cumbersome border bureaucracy. These factors already impeded their development prior to COVID-19. Informal expenses such as unofficial payments to speed up border processes, roadblocks, agents’ fees, etc. also create challenges for border formality: for instance, a Kyrgyz truck entering Uzbekistan in 2005 had to pay approximately 700 USD to cross the border, 25 per cent of which piled up from unofficial costs. Formal procedures addressing such challenges and others are thus important.
The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific indicates better practices. Supporting digitalization of trade with measures such as single window systems for easier trade and access to information, the Agreement reduces trade costs, informality, and transit times.
According to ESCAP readiness assessments for paperless trade, general obstacles to implementation include limited relevant legal rules, lack of electronic systems, inadequate inter-agency coordination, and insufficient human resource capacity. Given NCA countries’ space for improvement these are likely relevant obstacles to them too, to varying extents. Only Armenia and Azerbaijan have formally acceded to the framework agreement in NCA. NCA’s implementation average is, however, slightly higher than that of the entire Asia and the Pacific region (65.5 per cent vs 59.7 per cent).
Figure 2: Implementation of trade facilitation measures in NCA, 2019
Some countries have however taken subregional leadership in digitalisation. Innovations like Kazakhstan’s Single Window approach to public services and Azerbaijan’s governmental portals with 450+ digitalised public services make it easier for private sector actors to find updated formal information, while getting e.g. entry/transit permits is made easier for better traffic.
But COVID-19 has widened the digital gaps.
Those more digitalised before the pandemic progressed even further during the pandemic, broadening digital gaps. One can think the above obstacles to paperless trade also weaken pandemic measures and information flows. Growing information asymmetry between neighbouring countries likely contributes to difficulty of navigation for the private sector.
Thus, formal solutions are needed in NCA, particularly information should be better accessible, and informality should be mitigated. Accelerating digitalisation of borders and capacity building of relevant human resources and inter-agency cooperation within and between neighbouring countries is key to this in the long-term. Furthermore, there is potential for new Framework Agreements, to provide more COVID-19 response symmetry across NCA. International COVID-19 test recognition and provision of proper border waiting/testing areas for drivers were some of the short-term measures called for at the session. In conclusion: obstacles to movement of goods were lifted safely; obstacles to movement of people should follow.