GROWING INTERREGIONAL TRADE BY INLAND WATERWAYS

NATIONAL TRADE CORRIDOR IMPROVEMENT PROGRAMME LOOKS SUBSTITUTES

TARIQ AHMED SAEEDI (tariqsaeedi@hotmail.com)
June 1 - 7, 2009

Waterways are considered cost effective conduits of transporting goods across the border. A country having seaport has a clear competitive advantage over others without the facility because of its ability to keep cost of logistics in overall cost of production low. Seldom landlocked countries rubbish the vital relationship with their neighbouring nations to connect to the world through this natural channel on seas. Inland waterways are yet another added advantage that can be a blessing for any nation's economy with adequate web of rivers and canals since they provide economical and eco-friendly substitutes of on-air and on-ground media of transportation.

The water-supported transportation is widely used in several developed countries which are utilizing the facility to not only carry forward the cargoes from one place to another within the national border, but also to facilitate public commuting. President Zardari says inland waterways are needed to relieve the burden of roads and railways. During a meeting to discuss the workings of the National Trade Corridor and Improvement programme, he proposed inland waterways for building trade competitiveness of the country. He timely states that Pakistan's strategic location 'at the cross-road of Central Asian Republics' holds benefits for promoting inter-regional trade, adding this asset should be fully exploited through improving infrastructure, roads and railways networks.

Pakistan's importance in world trade logistics is built up due to the country's three established sea ports-two among them are deep-sea, giving outreach to many resources-rich markets. This would further be armoured if trade passages continue to be expansionary and provide unhindered middle ways to international trade. President's emphasize on rejuvenating trade corridors is seen as exhilarating addendum to tripartite moot attended by Afghanistan, Iran, and Pakistan in which it was decided that development of infrastructure connectivity among three countries would be revitalized and enhanced.

Be that as it may, proposed improving connectivity through highways and railways networks would not reconcile in the proposal inland waterways as workable transportation route, though the meeting was told that a task force had been made in this regard. With the efforts of limiting expenditures at par with existing financial resources, government of Pakistan may have been careful in initiating capital-intensive project. It has enshrined private sector participation in national trade corridor improvement programme aimed at to revamp all trade and logistics facilities from highways and railways to customs and cargoes handling at ports. The purpose is to boost quality of goods by mitigating flaws in delivery system and reducing travelling time.

Due to the requirement of continuous funding in the improvement and institutional advisory services for resolving the technical problems, government ought not to circumvent cooperation of other stakeholders including private sector, which is the main beneficiary of appropriate logistics services. Having had longstanding infrastructure weaknesses of roads and railways systems and insufficient highways, Pakistan needs coherent policy and regular funds to shape in valuable trade corridor that opens up new ways to global trade. As far as Pakistan is concerned, additional outlays for establishing thoroughfare are tantamount to increased budget deficit. In the face of financial stiffness, government can expedite the improvement works with the external financial backup. Funding by international financial institutions is sizeable but is customary with an obligation of repayment that bulge government debt-servicing account. Therefore, government seeks private sector participation.

According to the Planning Commission, National Trade Corridor Improvement programme has become a medium term transport master plan for the country since the programme was conceived in 2005. Pakistan has been sanctioned a soft loan of $25 million for simplification and modernization of trade practices and procedures by the World Bank. While the interest rate is charged at 0.75%, under the agreement 70% of the credit is grant. The approved trade and transport facilitation project-2 will give impetus to industrialization. Planning Commission through National Trade Corridor Management Unit would monitor the implementation of the project, closing date of which is 2013.

Although, the cost of functionalizing inland waterways will take no precedence, it can become a onetime investment to bring about substitutes over high cost of transportations on roads and railways. A policy framework should be deigned to include in the trade corridor project building of inland waterways. Apart from construction of roads and railways, which have existing infrastructure, making inland waterways operational for trade logistics will demand both substantial capital and other essential ancillaries. To start up, water flows in rivers upcountry can be used for ferry services. Low riparian areas will remain out until water flows are increased sufficiently to permit traffics especially of big cruises. In unorganized manner, people in different part of the country run ferries. However, they are practicing conventional ways of earning livelihoods and far from being instrumental to transportation of industrial goods via water channels.

So far, only rural population living alongside rivers and canals are making use of fuel-saving travelling on waterways. In transportation of industrial goods from one place to another, this usage is perhaps imperceptible. Besides, government needs to carve out new waterlines in between manufacturing industries and outsourcings. Firstly, this link would scale the transportation costs down significantly. Moreover, most importantly it would ensure hassle free movement of goods. While the present map of Pakistan does not chime in with the pre-71 cobweb of waterlines in the eastern part, it is yet to realign inland waterways to accelerate trade activities. A serious effort is indispensable to shift traffic overloads from roads and railways to inland waterways in order to get economic advantages and grow interregional trade.