Improving Transnational Transport Corridors

In the OIC Member Countries: Concepts and Cases

building nodes and logistics hubs to connect corridor to landlocked countries and gain local

value from corridor.

In view of establishing the “Mongolia– China–Russia Economic Corridor” (Otgonsuren, 2015)

researches the current situation and challenges ahead. He concludes that in order to establish

an economic corridor, the countries involved need to develop connecting infrastructure,

especially railroad transportation. He concludes that in view of facilitating the cooperation in a

cost-effective way, creation of a joint working mechanism is necessary for the effective

operation of the proposed economic corridor that crosses Russia, China and Mongolia.

Corridors can be essential to sustain economic and demographic developments. Urbanization

and concentration of economic clusters make transport corridors indispensable in order to

guarantee availability of products and labor, and efficient pricing on large concentrated

markets. (Frost & Sullivan, 2013) explain Middle East as vulnerable region with a 58%

dependency on food imports; City as a customer, and a development of the emergence of mega

cities, mega regions and mega corridors; By 2025 90-99% of the population of Kuwait, Qatar,

Bahrain and Lebanon is estimated to be living in urban areas. For Saudi Arabia, Libya and

Jordan this will be 80-90%; The contribution from oil exports to the GDP for most oil exporters

from MENA is expected to decline. The necessary transition will be of influence of production

and trade patterns. Transportation corridors will play a role.

According to De and Iyengar (2014) in most developing economies, the lack of economic

corridors is a major constraint on growth. Inadequate infrastructure causes congestion,

resulting in diminishing returns to capital in industry, acting as a disincentive to investment.

This leads to a low rate of labour absorption, and perpetuates a vicious circle of poverty.

2.6. Trade Facilitation

Trade facilitation and economic development are closely related (Wilson et al., 2005). Reform

in trade facilitation requires both hard and soft measures (Portugal-Perez and Wilson, 2012).

The hard measures include improved border infrastructure and communications and the soft

measures include, for example, improvement and harmonization of a range of customs

procedures such as the adoption of ASYCUDA

, Risk Analysis, through the deployment of the

Customs Risk Management Framework

and Electronic Data Interchange or EDI

. Generally

waiting and processing times at borders represent up to 50% of total transit times along

international trade routes (Yang, 2017). Such delays due to pre clearance and border

processing delays add considerably to the transit time and, because of this, the reliability of

logistics chain also reduces (Hausman et al., 2005). Of importance is that Djankov et al. (2010)

noted that each additional day that a product is delayed prior to being shipped reduces trade

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