Report

72 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA
Table 9.2 Doing Business in South Asia
Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka
Rank
2007 172 139 148 142 100 150 81 94
2008 174 112 149 79 110 151 94 60
Documents for Exports (number)
2006 7 7 8 10 8 9 8 7
2008 12 7 8 8 8 9 9 8
Time for Exports (days)
2006 66 35 38 36 21 43 33 25
2008 67 28 38 18 21 43 24 21
Cost to export ($ per container)
2006 2500 902 1150 864 1200 1600 996 797
2008 2500 844 1150 820 1200 1600 515 810
Documents for Imports (number)
2006 10 13 11 15 9 10 12 12
2008 11 9 11 15 9 10 8 6
Time for Imports (days)
2006 97 57 38 43 20 35 39 27
2008 71 32 38 21 20 35 19 21
Cost to import $ per container)
2006 2100 1287 2080 1244 1200 1725 1005 789
2008 2100 1148 2080 910 1200 1725 1336 844
Source: World Bank, 2008, Doing Business website
Infrastructure Constraints
The lack of physical, industrial, and communication
infrastructure in the region has also contributed to
restricted trade amongst countries. Kabir (2007)
summarises the key issues. Air and maritime ports are
ranked as less competitive in South Asia as compared
to East Asia. While it takes two hours to clear a vessel
in Singapore and Laem Chabang, Thailand, it takes
2–3 days in Chittagong. At Delhi airport, average cargo
dwell time is 2.5 days. There are some estimates that
have been made to compute the magnitude of NTBs in
the form of connectivity and approaches infrastructure.
World Bank (2003) estimate saving in terms of transport
cost from road to rail along the Kolkata-Kathmandu
corridor at 22–33% of road cost. UNESCAP (2003)
estimates transit charges at 0.45% of CIF value for
private cargo. UNESCAP (2007) finds that inter-South
Asia disparity in infrastructure facilities has been rising
over the years. Further, progress in information technology
is as important as development of physical infrastructure
and is imperative for customs and standards
harmonisation between countries of the region. South
Asian countries have been relatively successful in
strengthening IT infrastructure at some prominent
border crossings in recent years (UNESCAP 2007)
INFORMAL TRADE IN SAARC
NTBs and other ‘behind the border’ constraints such
as problems with connectivity across contiguous
countries; poor border conditions, approaches, and
facilities; and excessive documentation requirements
and clearance procedures thwart the positive effects of
tariff liberalisation. The need to file detailed and
multiple documents are associated with corruption in
customs. Delays and frequent demands for bribes
encourages traders avoid customs altogether and
smuggle goods across the border. This consequently
defeats the purpose of border control on trade, which
is to levy taxes and ensure high quality goods.
Informal trade figures between SAARC countries
are surprisingly high. Historical roots of economic
relationships have kept trade flows between these
countries despite tariffs and NTBs. The vast and porous
borders have allowed for much informal trade
throughout the history of the region. Close ethnic ties
and common culture and language have played an