Washington: South Asia has had outstanding economic growth in the last two decades and could grab a bigger share of international trade, but inefficiencies in its ports threaten to hinder progress and stop it from matching other regions like East Asia, a new World Bank Report shows.
While some South Asian countries took great strides to improve performance at container ports amid a worldwide boom in sea-borne trade, the region as a whole has lagged and its ports are seen as expensive and slow, the report said.
The comprehensive World Bank study of the status, structure and deficiencies of the region’s container ports found that if ports in Bangladesh, India and Pakistan had been as efficient as those of Sri Lanka it could have cut shipping costs by up to nearly 9 percent, boosting the value of the region’s exports by up to 7 percent.
As China is shifting out of labor-intensive sectors such as apparel, South Asia has the potential to capture a growing share of the global market. This may in turn attract more foreign direct investment, increase trade and create new jobs for South Asia’s growing labor force.
“But tapping into these opportunities will require removing bottlenecks in transport logistics, last mile connectivity, and ports in particular, to reduce the high logistics costs in the region” said Jose Luis Irigoyen, Senior Director, Transport and ICT Global Practice at the World Bank.
The report, “Competitiveness of South Asia’s Container Ports – a Comprehensive Assessment of Performance, Drivers and Costs”, includes unprecedented analysis of the situation at the ports and the steps needed for improvement. “Overall South Asia has improved the performance of its container ports, but still struggled to catch up with other developed and developing regions” report author Matías Herrera Dappe said.
South Asia has reduced the performance gap with East Asia, but because of remaining inefficiencies and lack of infrastructure it costs about twice as much to import a container as in competitor countries in East Asia. Average ship turnaround time for the region, at more than two days, was more than four times that of Singapore.
The report recommended the countries – Bangladesh, India, Maldives, Pakistan, and Sri Lanka – to build greater private sector participation, improve governance of port authorities and create more competition within and between ports.
“Experience from across the globe, including the South Asian experience, indicates that a comprehensive approach that tackles several interrelated angles yields greater benefits than isolated improvements,” said Karla Gonzalez Carvajal, South Asia Manager, Transport and ICT Global Practice at the World Bank.