Facilitating cross-border trade in Central Asia

Project description

Project title: Regional Project “Trade Facilitation in Central Asia”
Commissioned by: German Federal Ministry for Economic Cooperation
and Development (BMZ)
Countries: Central Asia (Tajikistan, Kazakhstan, Kyrgyzstan and Uzbekistan)
Lead executing agencies: Ministry of Trade and Integration of the Republic of
Kazakhstan; Ministry of Economy of the Kyrgyz Republic; Ministry of Economic Development and Trade of the
Republic of Tajikistan; Ministry of Investments and Foreign Trade of the Republic of Uzbekistan
Overall term: 2020 to 2023

Context

Throughout history, Central Asia benefitted from being on the Silk Road, connecting East Asia to the Middle East and Europe. Today, with its young and educated population, natural resources and strategically advantageous location, the region has immense potential for economic development. Trade in agricultural goods, in particular, offers a great many opportunities for export to both regional and international markets.

This potential has remained unfulfilled to date, because Central Asian countries are still insufficiently integrated into the global economy. This has not changed despite the conclusion of various international and regional trade agreements and continuous efforts in these countries to modernise their control agencies and trade rules. Cross-border trade and transportation of goods in and from the region remain costly due to long queues of trucks and people, documents being checked repeatedly and delays in procedures.

The cooperation and exchange of information between customs and border control agencies is not yet efficient. The absence of risk management systems to assess the need for inspections means that safety checks are inadequate and the allocation of resources remains inefficient.

Information technologies are not systematically applied and have to be complemented by parallel manual procedures. All these challenges mean increased transaction costs for companies and contribute to the negative image of doing business in Central Asia.

Objective

Central Asian countries are successfully implementing trade facilitation measures that improve crossborder trade.

Approach

We collaborate closely with partner institutions in the area of economic development and trade, as well as customs authorities and other border control agencies. Working closely with business associations and companies is the key and principal element in our methodological approach.

Risk management and border cooperation.

In cooperation with our partners, we are improving the capacity of customs authorities and border control agencies to implement a risk management system and make use of prearrival information.

Using risk management systems can reduce the number of physical inspections, allowing authorities to focus instead on high risk goods. Furthermore, by harmonising and standardising procedures as well as encouraging close cooperation between the state agencies involved, customs clearance and cross-ing borders becomes faster and more efficient.

We support the further development of information systems and use of digital technologies for export, import and transit procedures. 

Public-private dialogue and pilot projects

In order to ensure transparency in the decision making process and to protect the interests of all the parties involved, the project promotes a public-private dialogue on trade facilitation issues.

Our experts conduct trainings and workshops to increase awareness among private sector stakeholders and to actively engage them in the reform process. We also carry out activities to enhance regional cooperation on reducing barriers to trade.

Any legal changes and decisions adopted should be more than just words on paper. Therefore, to move reforms towards implementation on the ground, we pilot innovative approaches in digitalisation, information exchange and cooperation at selected border crossing points. Regular feedback is welcomed from the private sector, as this plays an important role in spreading progressive solutions.

Results

Achieved results:

• Recommendations of the private sector have been taken up into the action plan of the National Trade Facilitation committees in Kyrgyzstan, Tajikistan and Uzbekistan.
• The Electronic Pre-Declaration (EPD) of the TIR Convention is applied and can be used by traders in Kazakhstan, Kyrgyztan and Uzbekistan for easy transit procedures.
• At the border crossing point Dostuk in Kyrgyzstan technical and administrative conditions were established that allow officers from different border agencies to share information on shipments and traders.

Last update: December 2022