A Private-Public Partnership: En Route To Prosperity
In the era of the global village that we live in international trade is vital for economic growth and prosperity everywhere. Globalization and inter-dependency, on the other hand, pose significant challenges to world economies particularly in adopting open-market policies, modernizing infrastructures, harmonizing laws and procedures and facilitating the movement of people and goods.
For the Hashemite Kingdom of Jordan, which has been facing its own set of political and economic challenges before and after revolutionary changes wrought in neighboring countries as a result of the Arab Spring, introducing major economic reforms has become a must.
Lying at the crossroads of the major trade corridors in the Mashreq region, Jordan has a significant potential to increase its level of trade. In order to face the myriad of complex issues involved in achieving this goal, from to the discordance of rules and regulations across every border to adopting the right mix of economic liberalization needed, Jordan has embarked on and been implementing an ambitious but highly essential programme to modernize its transport system and enhance the country’s trade competiveness.
Trade and Transport Facilitation (TTF) Programme
Improving the competitiveness of domestic producers and traders to be able to compete in local as well as international markets requires an environment in which producers, traders, and consumers interact and communicate effectively as partners. Extensive logistic networks, clear trade procedures and protocols, and support from public service industries are required for trading operations to thrive, improving in the process the performance of various sectors of the economy.
Trade and Transport Facilitation (TTF) is a program that has been adopted by the Jordanian government to bring together all concerned stakeholders in the private and public sectors to address the problems and obstacles encountered by the trade and transport sectors. It aims to improve exporters’ competitiveness and attract foreign investments to grow the economy.
The overall objective of TTF is to contribute to Jordan’s integration into the global economy by reducing trade-related costs and developing a multi-modal transport sector that maximizes efficiency and is, at the same time, environmentally sustainable.
Full implementation of TTF will bring about more efficient movement across borders and expanded trade through regional cooperation, both by clarifying the rules and regulations, trading procedures and protocols, that make up the country’s trade policy to potential trading partners and by consolidating them from the various documents and departments into one procedure from one location. Further, TTF will mean greater harmonization of trade agreements, information flows, and documentation related to the trade and transport sectors, as well as greater improvement of its infrastructure, building capacity in it, and augmenting fruitful exchange and cooperation among all stakeholders.
European Union Funding
As a means of supporting the Jordanian government’s policy on economic development and growth, the European Union (EU) has provided the TTF program with a €33 million grant.
The bulk of the grant (€27 million) has been directed to support the national budget. The remaining funds have been devoted to providing Technical Assistance (TA) to the Ministry of Transport (MoT) with the aim of addressing issues and needs associated with restructuring and strengthening the Ministry, to modernize the transport sector, to assist in formulating a national strategy for the transport sector, to enhance capacity building and establish an Executive Secretariat to support two committees that were created to implement the TTF.
In addition, the EU has designed and approved policies and procedures related to the program with particular emphasis on efforts to remove any obstacles facing Jordanian foreign trade and improving transport systems.
Vision, Mission and Values
To strengthen Jordan's socio-economic development and regional role in trade and transport facilitation through supporting dynamic and sustainable trade practices and developing a multi-modal transport sector that are distinguished for their operational efficiency, transparency and the policies and laws governing them.
The mission is to develop and sustain the trade and transport sectors, through boosting coordination and communication among private and public stakeholders in Jordan and the region; simplifying and harmonizing policies, procedures and regulations; facilitating logistical support for all stakeholders, locally and internationally; as well as building the capacity of staff.
In order to improve the trade and transportation sector in Jordan, a basic set of values and principles will be followed:
- Harmonization of laws, regulations and procedures as well as trade logistics for all stakeholders, locally and internationally
- Transparency where all information on border requirements and procedures are publicly available and easily accessible to all interested parties
- Consistency and Predictability of requirements and procedures to ease trade, transport and border crossings
- Simplification of administrative and commercial formalities, procedures and documents
- Integrity in dealing consistently and honestly in the application of procedures and regulations and publication of information and data
- Efficiency through the optimal use of resources and personnel
TTF Strategic Framework
As TTF in Jordan has been identified as a major requirement for the expansion of the economy, four entities have been appointed to be responsible for TTF in Jordan.
- National Committee for Trade and Transport Facilitation (NCTTF)
- Technical Committee for Trade and Transport Facilitation (TCTTF)
- Ministry of Transport (MoT)
- Executive Secretariat for Trade and Transport Facilitation (ESTTF)
While the ministry and executive secretariat are mainly public institutions, the national and technical Committees are comprised of members from both the public and private sectors created to widen the scope of discussion and better the outcomes for all stakeholders.
The strategy for TTF was initially laid out in the National Transport Strategy 2009-2011 developed by the MoT and updated in the 2012-2014 strategy.
Following are the main policies and activities for TTF in Jordan:
- Improve the domestic capacity for TTF
- Strengthen the initiatives of the NCTFF
- Augment capacity building of Jordanian forwarders and trucking companies for TTF
- Enhance regional cooperation to support trade and ease border crossing traffic
- Establish and consolidate regional cooperation on TTF
- View transport development and infrastructure investments in a regional perspective
- Upgrade customs services and border crossing facilities
- Ease custom procedures and border crossings
- Develop multi-modal and inter-modal transport systems
- Provide public and private sector investments for establishing connections and interchange points between road and rail networks
- Pursue complementary modes of transport
- Develop equal opportunities and advantages for freight transport by rail and by road
The main objectives of Trade and Transport Facilitation in Jordan are:
- Encourage the free movement of people and goods
- Facilitate efficient movement of goods through established competitive regional trade corridors
- Reduce transaction costs and time significantly by improving administrative efficiency and simplifying, standardizing, and harmonizing trade procedures
- Enhance the transparency of laws, regulations, procedures, and forms, and share information on these and other trade issues
- Develop sustainable, safe, user-friendly transport and trade networks
The Organization for Economic Development (OECD) estimates that the cost of trade procedures and customs handling is as high as 15 percent of the value of traded goods, which is usually passed on to consumers.
In terms of paperwork, the United Nations Conference on Trade and Development (UNCTAD) estimates that the average customs transaction involves 20-30 different parties, 40 documents, 200 data elements (of which 30 are repeated at least 30 times) and the re-entering of 60-70 percent of all data at least once. This adds up to a lot of money and time which could be saved by improving trade and transport procedures.
By adopting well-established TTF procedures, and through the cooperation of both public and private stakeholders, the roadblocks in such areas as customs and transport can be removed, thus boosting the competitiveness of local businesses, increasing the inflow of foreign investment into the country and facilitating its integration into the global economy.As a result, all actors – the government, private businesses as well as consumers – equally benefit.
For the government, TTF means more effective and efficient use of resources and enhanced revenue collection. In addition, the facilitation enhances the effectiveness of control methods providing better protection against smuggling, fraud and threats to national security. Likewise businesses’ compliance with trading regulations is improved. A safer and better regulated trading environment encourages foreign investments and augments economic development.
For traders, TTF helps to streamline paperwork, clear customs in a timely manner and reduce delays in the delivery of goods. This means that private enterprises can save time and consequently save costs. As a result, businesses can enhance their competitiveness and take advantage of more opportunities.
Furthermore, many small and medium businesses that are not now active in international trade will be encouraged to participate; and since they often account for a substantial part of a country’s economy, their gain strengthens the entire economy.
For Jordan and Mashreq countries, expanded access to the global market will boost the economy in this region. Increased exports will lead to business expansions and greater employment rates locally. Savings made by traders and local businesses due to the improvements in border crossings and customs procedures can be passed on to consumers.
In the end, the partnership built among public institutions and private enterprises and aimed at removing obstacles to improving trade and movement of goods will greatly benefit all the stakeholders directly involved and the region as a whole.