3.4 The Challenges of Being a Landlocked Country
3.4.3 Costs incurred by Landlocked Countries
Landlocked countries face different challenges at different stages of the importing process.
There are different challenges that arise at different stages of the importing process. The initial challenges are costs. These costs are exclude the costs of importing goods from a different.
These costs include:
Transport costs – this is the price paid to the carrier for the transportation of goods and merchandise by sea, road or rail from one place to another.
Agents cost – An agent is a person authorised to transact business for and in the name of a buyer. The buyer then pays the agent for their services.
Duty and Tariffs – A publication setting forth the charges, rates and rules of transportation.
Insurance – this is paid so that there is a policy or certificate that normally covers the shipments of merchandise from the time they leave the warehouse at the shipping point until they reach the ultimate destination (Customs Valuation Encyclopedia, 2003:469).
3.4.3.1 Customs Procedures
Due to globalisation, the world economy had placed pressure on the world’s customs regulations. Customs works as a government agency because it is a primary source of revenue for them. Lane (1999) stated that the mission of customs is:
To ensure that all imports and exports are in compliance with the laws of the specific country
To expedite the entry of all valid products into the country
Traditionally customs practices were not favourable for trade purposes. The system then had stringent policies that made trade difficult. However, over the years due to the elimination of
49 borders through the introduction of SADC and EU, customs has reduced their work by mainly focusing on intelligence rather than profile policing. Table 3.6 shows a review of traditional customs operations contrasted with the more modern approach.
Table 3.6: Customs Procedures Customs Procedure or
Practice
Traditional Customs Modern Customs
International Standards of the World Customs Organisation (WCO) and World Trade Organisation (WTO)
Non-conformance or only partial conformance.
Full conformance with all international Customs standards for classification, value and procedure.
Customs Automation No or only partial Full automation Measures of Performance Limited output measures
and process measures and frequently the wrong measures.
Full measures of compliance and facilitation leading to improved performance.
Tariff System Complex and high duty rates Simplified and reduced duties
Revenue Collection Prior to entry of goods Entry and collection separate. Duties paid after entry
Enforcement and Compliance Approach
Characterised by manual inspections and nearing 100% and paper reviews
Minimal inspections and paper documentation
Information Provided at time of entry Advance and historical information prior to arrival of goods and conveyance
Personnel Poorly trained and low
skilled
Highly trained and professional Appeals of Customs
Decisions and Transparency
Limited and unknown appeal process, limited
Fully defined appeals process within and beyond
50 publication notice of rules
and practices
Customs, full transparency and co-operation with trade
Results: Low and unknown
compliance, high cost for government and industry and poor facilitation
High and measured
compliance, lower costs for government and industry, vastly improved facilitation and framework for
continued improvement.
Source: Compiled from http://www.wcoomd.org
Regardless of the fact that customs has loosened the regulations over the years, there are still documents required to ensure that there is uniformity when it comes to importing and exporting.
3.4.3.2 The UN Almaty Programme of Action
Africa has 15 landlocked countries that face specific challenges. Botswana, Burkina Faso, Burundi, Chad, Central Africa Republic, Ethiopia, Lesotho, Malawi, Mali, Niger, Rwanda, Swaziland, Uganda, Zambia, and Zimbabwe have no direct coastal access to the sea and thus also to maritime trade and therefore face very specific challenges. The lack of territorial access to the sea, remoteness and isolation from world markets and high transit costs continue to impose serious constraints on the overall socio-economic development of landlocked developing countries (ATPC, 2010:1).
Aiming to address the constraints facing landlocked countries, an International Ministerial Conference of Landlocked and Transit Developing Countries was held in Almaty, Kazakhstan, from 25-29 August 2003 (ATPC, 2010:1). It was the first venue that provided the international community the opportunity to organise international support and partnership to address the special needs of landlocked countries (ATPC, 2010:2). At its successful conclusions, the Ministerial Conference adopted The Almaty Ministerial Declaration and the Almaty Programme of Action: Addressing the Special Needs of Landlocked Developing countries within a New Global Framework for Transit Transport Cooperation for Landlocked and Transit Developing countries (ATPC, 2010:3). The Almaty Programme of Action, as is commonly referred to, was adopted as a global framework for action for developing efficient transit transport systems in landlocked and transit developing countries. The Programme aims to:
51 1. Secure access to and from the sea by all means of transport for landlocked developing
countries according to applicable rules of international laws;
2. Reduce costs and improve services so as to increase the comprehensiveness of their exports;
3. reduce the delivered costs of imports;
4. address problems of delay and uncertainties in trade routes;
5. develop adequate national networks;
6. reduce loss, damage and deterioration en route;
7. Open the way for export expansion; and
8. Improve safety of road transport and security of people along the transport corridors (ATPC, 2010:6).
In order to reach those objectives, the Almaty Programme of Action highlighted five priority policy areas for landlocked and transit countries to address:
Transit policy and regulatory frameworks: landlocked and transit countries to review their transport regulatory frameworks and establish regional transport corridors.
Infrastructure development: landlocked countries to develop multimodal networks (rail, road, air, and pipeline infrastructure projects).
Trade and transport facilitation: landlocked countries to implement the international conventions and instruments that facilitate transit trade (including the WTO).
Development assistance: the international community to assist by providing technical support, encouraging foreign direct investment, and increasing official development assistance.
Implementation and review: all parties to improve their monitoring the implementation of transit instruments and conducting a comprehensive review of their implementation in due course (ATPC, 2010:9).
The Almaty Programme of Action emphasizes that efficient transit transport systems can be strengthened through strong partnerships between landlocked and transit developing countries and their development partners at all levels including partnerships between public and private sectors. It is important that such partnerships are based on the mutual understanding that all stakeholders would undertake specific actions that have been agreed to in the Programme so as to establish efficient transit transport systems. Moreover the international community, including financial and development institutions and donor countries, are called upon to
52 provide financial and technical support to support landlocked and transit countries to address effectively transit transport challenges and requirements (ATPC, 2010:15).