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Landlocked. The balance of interests Sources of the problem, or the long road to Almaty
Ilyas Omarov
Sources of the problem, or the long road to Almaty
From time immemorial, sea transport has been the cheapest method of transportation. The sea harbors are the main source of income for some countries. No country can easily change its geographical position. The opinion that the countries which are unlucky in this respect need some support is true. Today there are 30 countries, identified as developing by the UN, that are landlocked.
Note that the landlocked countries pay a high price for their geographical position. The remoteness from the main international markets, complicated transit procedures and a less developed transportation infrastructure increase the transaction costs of external trade; the costs sometimes are higher than the value of the product. The internal markets of such countries are small and are not capable of solving these problems. The landlocked developing countries (12,5% share of the world’s land and 4% of the worldwide population) have a share of only 0,3% of the world GDP and 0.34% of world FDI (foreign direct investment). The geographical factor is the reason for this. This factor puts the landlocked developing countries into especially unfavorable conditions for development. Being landlocked they might be cut off from many potential markets, and face significant obstacles if the transportation infrastructure to the sea shore is undeveloped. Moreover, because the produce has to cross boarders and the transit procedures are often complicated, the transportation services become very expensive for these countries. This influences the competitiveness of their exports and the accessibility to the required imports. Creation of an effective transit system is vitally important for the integration of these countries into the world economy. Experts’ assessments show that, on average, the transportation and insurance costs of landlocked developing countries are twice as large as other developing countries, and three times larger than developed countries. Even those landlocked countries that have large reserves of oil face the problems that imply big costs. These countries depend on cooperation with the countries of transit to ensure the most direct and efficient routes of exporting the oil to markets. According to the research by the UN, if a country is landlocked, it decreases its economic growth by 0,7%. During the last decade, the growth in real GDP per capita of the landlocked developing countries, on average, was less than the growth in the less developed countries. In this respect, the following conclusion of the experts, who studied the problems of transportation of such landlocked countries as Mongolia, Laos, Nepal and Kazakhstan, is typical. The condition of roads and railroads tends to provide some access to the sea shore. However, there are significant problems in the so called institutional policy. According to the experts, the situation with the transits can be assessed comparing the criteria given by the UN Economic and Social Commission for Asia and Pacific (ESCAP). For example, on average it takes 2 to 4 days for products to cross the border between Kazakhstan and Russia, and it takes 4 to 10 days between Turkmenistan and Uzbekistan, while in some countries of the ESCAP, which are not landlocked, it only takes several hours. This factor alone is evidence of the necessity to develop the uniform procedures for cross boarder transit. The following is another example about our country. About 2000 trucks are involved in international transit in Kazakhstan; almost all of them are owned by private companies. Foreign companies don’t work in Kazakhstan, because of the undeveloped taxation system and bad roads. The roads will improve in time; partially because the interest in our transit possibilities is growing. The UN has long recognized the specific problems of the landlocked developing countries and is dedicated to assisting in overcoming the problems. The whole system of the UN makes efforts to ensure that the requests of such countries are taken into account in the decision making process. The General Assembly has established the Office of the High Commissioner for ensuring the supervision of fulfillment of the international agreements on assisting the landlocked developing countries.
Approaches to the solutionThe first of the unique forums of the landlocked countries was held by the UN in Almaty in 2003. Kazakhstan initiated this forum by submitting the suggestion to the UN in 1998. After 4 years, the General Assembly decided to organize the unique activity. The decision of the General Assembly to organize this international conference shows the will of the world society to assign a higher priority to the specific problems of the landlocked developing countries. And the choice of the place to hold the conference shows the growing status of our country on the international stage. Kazakhstan is the biggest landlocked country in the world. Anvarula Choudhuri, the Deputy to the Secretary General of the UN, was the chairman of the conference in Almaty in 2003. He said “Being the largest landlocked developing country, Kazakhstan is uniquely located. On multiple occasions at UN events, your country emphasized the need to assist in solving the important problems of the landlocked developing countries. This allows Kazakhstan to host such a conference. In my opinion, it is a good choice”. At the conference, attention was paid to ensuring ease of accessing the sea shore, efficiency of transit operations and international support to the landlocked countries. The international conference of ministers, within the limits of its resources, will consider the current situation of the transit systems, and develop the necessary actions and practical programs aimed at creating efficient transit systems. Nursultan Nazarbaev, the President of Kazakhstan, at the conference, emphasized that the our country, which is located in the middle of Eurasia and has a huge transit potential, feels the need to cooperate in the transportation system more than anyone else; and our country is ready for partnership in this sphere. He emphasized that, currently, in accordance with the global concept of sustainable development, there is a possibility to ensure fairer international trade and efficient use of the modern transit potential for the welfare of the whole world society. The information on the volumes of the international commodity circulation is very important for the landlocked and transit countries. Providing them with the information requires the creation of a coordination body, which would consist of the representatives from the interested countries. Discrepancy between the current condition of the roads included into the international corridors and the international standards for their condition increases the delivery time of the products. There is an important problem of attracting investments into the transit infrastructure, primarily because it takes a long time before such investments pay off. Therefore, it is important to have a joint dialog among the member-states and joint search for solutions. Kazakhstan actively participates in the projects, which increase the transit potential of Asian countries international trade. Our country cooperates with the UN on the ALTID (Asian Land Transportation Infrastructure Development) and SPECA (Special Program for the Economies of Central Asia) programs; also the regional project of the UNDP “Silk Way Region Development” is being developed. Significant actions have been taken in order to improve the cooperation among the member-states of the EEC (Eurasian Economic Community) and SCO (Shanghai Cooperation Organization). About four thousand kilometers of highway are under construction or reconstruction. This work will be finished in 2005. During the concluding part of the conference, they noted that everything started at the General Assembly in New York and finished in Almaty by adoption of the concluding documents. This is an example of multi-directional diplomacy on the highest level. Delegates from 83 countries and 23 international organizations agreed with the appraisal. The program adopted at the conference in Almaty identified the following priorities for the landlocked developing countries; ensuring ease of access to the sea shores for all types of transport, cost reduction and quality improvement of the transportation in order to improve competitiveness of exports, creation of new national transit systems, etc. The priorities of the further work by the developed countries are participation in designing the transit policy, development of transit infrastructure, assisting the growth of international trade and supervision over the fulfillment of the agreements. The new global program of the UN adopted in Almaty is an important step in improving cooperation among member-states on transit. In addition, this document is evidence of Kazakhstan’s role in solving the global problems. This initiative is one of the unique features of our country in the UN.
