December 17, 2020
Corridor-led economic development programmes are gaining momentum in Bangladesh, Bhutan, India and Nepal (BBIN); it is time for them to join the dots
“Given new and emerging infrastructure linkages, it is vital to advance, adapt and accelerate the use of big data and analytics to conceptualise corridor assessment and monitoring mechanisms to improve logistics quality for enhancing trade and competitiveness in the BBIN sub-region,” said Bipul Chatterjee, Executive Director, CUTS International.
He was speaking at a Webinar held on 16th December, 2020, based on a Discussion Paper: Transforming Logistics Performance in BBIN Countries. Towards creating lasting legacy, this has recently been published by CUTS under its project on multi-modal connectivity in the BBIN sub-region, which is supported by the Foreign, Commonwealth and Development Office of the United Kingdom with the Asian Development Bank as its knowledge partner.
Authored by Pritam Banerjee, an independent trade and logistics expert, it discusses the concept of freight fluidity and the fluidity of specific economic corridors that could be adopted for future research.
Delivering his presentation, Pritam Banerjee underlined that end-to-end analysis of a corridor using objective data is rare in the BBIN context. He made a case for this concept by arguing that while the current approaches used in the assessment of logistics quality in BBIN countries have added great value in identifying problems and get a much better visibility of issues, over-used methodologies have diminishing returns after a point in terms of providing more holistic or newer insights.
Some borders or corridors have been studied multiple times in the last decade or so, for example the Benapole-Petrapole border between India and Bangladesh, but substantial challenges are still evident that inhibits this corridor’s logistics quality.
He further stressed that the concept could potentially cover a large number of variables for parameters such as connectivity and transit time, resilience, reliability and costs that impact logistics quality and efficiency.
For that, partnership between logisticians in BBIN countries moderated by national or regional business associations could create the necessary network required on the ground linking devices with transport assets.
Reflecting on the presentation, Cecile Fruman, Director, Regional Integration and Engagement, South Asia, The World Bank Group, said that they are fully behind the concept of corridor-wide assessments by leveraging big data and new technologies.
The World Bank is now in the process of developing its Logistics Performance Index 2.0, which will leverage automated and big data to a much greater extent.
The approach adopted for LPI 2.0 is quite similar to the corridor fluidity approach suggested by the CUTS paper and these are complementary tools. LPI 2.0 will estimate quality of supply chain connectivity from tracking information and generate statistics of supply chains lead time.
However, she argued that there are challenges in corridor benchmarking and monitoring. A key issue to any corridor benchmarking approach is financial sustainability. “The World Bank supported the development of a GPS-based corridor monitoring platform and trucker monitoring system in Southern Africa. Though it entailed a low initial capital investment, operation and maintenance costs become too high to sustain,” she said.
“Implementing such a corridor monitoring mechanism requires careful identification of clear revenue streams, beyond initial support from governments. Designing value-added services those shippers would be willing to pay for will also be needed,” she added.
Another issue is institutional mechanisms for corridor monitoring. The Northern Corridor in Kenya and the Abidjan-Lagos Corridor Organisation are successful examples in corridor monitoring because they have benefited from strong institutional support and frameworks.
Agreement on regional data sharing is another challenge. Implementing a data driven corridor monitoring mechanism managed by regional bodies would require co-operation and potentially even formal agreements between the BBIN governments on data sharing.
Strong analytics and data are important to spur action. Corridor assessments are essential not only to improve logistics but also to assess and incentivise wider economic benefits: connecting rural areas, making trade and transport more accessible to women, supporting growth of SMEs, including women- led ones, she further elaborated.
Speaking on the occasion, Jan Hoffmann, Chief, Trade Logistics Branch, Division on Technology and Logistics of the United Nations Conference on Trade and Development, reflected on the present logistics conditions in the BBIN countries, and argued that the demand for digitisation and connectivity will only increase.
He noted that as the paper suggests the use of big data and various applications to transform the logistics sector in this sub-region, these countries are on a right track to achieving that. “We need to remember to lock-in the progress made during the lockdown by continuing to deepen automation and digitisation of trade in the region.”
“There is no trade-off between protecting the population and facilitating trade. This is a misconception. The Trade Facilitation Agreement of the World Trade Organisation has enough flexibilities and coupled with the ten-point action plan that has been prepared by UNCTAD, a good risk management system can be achieved. For that, there needs to be a proper mechanism to integrate the operations of the private and public sector agencies,” he added.
According to Kuancheng Huang, Senior Transport Specialist, Transport Sector Group, Sustainable Development and Climate Change Department of the Asian Development Bank, with multi-modal logistics parks private sector participation in transport connectivity will increase. End-to-end real data can be helpful to evaluate the performance of a corridor and to improve freight fluidity.
“Nowadays, tracing technologies as well as data analytics are relatively mature, such as that the ADB has for understanding the spread of the Covid-19 pandemic, by QR code, app, and cloud platform. Thus, a pilot test for corridor fluidity assessment will not cost much. The real challenge is how we coordinate the supply chain players to jointly identify the real bottlenecks and then take actions upon them,” he argued.
For years, ADB has been supporting the implementation of the Corridor Performance Measurement and Monitoring system and perform the analyses. Drawing from the experience of implementing this system in its Central Asia Regional Economic Cooperation (CAREC) programme, he said that the usefulness of economic corridor development projects have improved with road and rail infrastructure.
“They contributed to increased travel speed but, at the same time, some gains are lost due to slow border crossing. That is why border crossing issues are being regularly discussed and progress is now visible,” he added.
Concluding the programme, Bipul Chatterjee urged these multilateral agencies to consider implementing this new approach on a pilot basis in a couple of economic corridors in India, which are under development. They are the Delhi-Mumbai Freight Corridor and the East Coast Economic Corridor.
Drawing their attention to similar programmes in our neighbouring countries such as the Jamuna Waterway Corridor Development Programme in Bangladesh, he argued for joining the dots between and among the economic corridors of the BBIN countries by exploring multi-modal connectivity options.
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For more information, please contact:
Prashant Sharma, + 919887260170, psh@cuts.org
Apoorva Lalwani, +918619110291, apl@cuts.org
Jithin Sabu, +918606849057, jsb@cuts.org
Srijata Deb, +919999453920, srd@cuts.org