Improving Transnational Transport Corridors
In the OIC Member Countries: Concepts and Cases
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4.2.3. Trade Facilitation
Different OIC regions have different objectives when it comes to the transport corridors
development. For Asia, transport corridor secretariats like CAREC, TRACECA, and ECO have an
objective to open-up the trade potential of the many landlocked Central Asian countries,
promote intra-trade along the corridors, and to accommodate trade between Asia and Europe.
As for Africa, unlocking the landlocked countries is also one of the main objectives together
with poverty reduction. Since maritime access is not an issue for the MENA region, transport
corridors are mainly considered as catalysts to enhance regional integration and trade
cooperation, although this is not yet achieved. Regarding the Middle East (Islamic
Development Bank 2011) identifies that a major problem for this region seems to be the low
level of economic integration by way of international trade. This is most likely the result of the
absence of proper transport corridors. This is also shown by the level of intra-trade in the OIC
regions, which accounts for less than 10% of total trade.
Non-physical barriers to trade are major bottlenecks in OIC countries. Unofficial payments
(corruption), multiple checkpoints, cumbersome border crossing, high insurance and tax, are
some of the non-physical barriers that hampering the level of trade facilitation in OIC transport
corridors.
(Islamic Development Bank 2011) also argues that with regard to the adopted objective of
promoting intra-OIC trade, it can be seen that significant progress has been achieved in the last
decade in the OIC region. The majority of the OIC member states have also now taken
measures to liberalize their foreign trade: the number of countries with average tariffs higher
than 20 percent and very high non-tariff barriers has dropped sharply by about 30 percent,
decreasing from 64 percent in 1995 to 38 percent in 2005. On the other hand it seems that
non-tariff barriers are yet to be tackled properly, with cumbersome customs and
administrative procedures in place, technical barriers to trade, quantitative restrictions on
imports, sanitary and phytosanitary measures, etc. This situation is especially very
problematic in the SSA region.
The cost of transport is a factor influencing competitiveness of a country, and having a strong
link with infrastructure. OIC – SESRIC (2016) analyses “the average trade costs for different
country groups over the period 1995-2012. As it is evident, although tariffs in many countries
are now at historical lows, overall trade costs remain high. Average trade costs tend to exhibit
higher trade costs particularly in developing countries. OIC countries, on average, display even
higher trade costs. In 2012, trade costs in OIC countries (179% ad valorem) were on average
two times higher than those in developed countries (86% ad valorem).”