Enhancing trade is the most effective way to reduce poverty at local, national, and regional levels as long as barriers to road transport are removed. After all, research has shown that road transport is a key driver of economic development, and 80 percent of world trade passes through about 30 major ports. To achieve this ultimate goal of economic development, the International Road Transport Union has focused on reopening the ancient Silk Road to trade by road transport, connecting businesses in the region to major world markets. The aim is to stimulate trade, investments, tourism, and employment in landlocked countries that are not yet benefitting from globalization.
The International Road Transport Union (IRU) has implemented several projects over the past 15 years to collect and analyze data on the impediments and non-physical barriers to trade by international road transport. Results are encouraging: in 2004, the IRU’s Beijing-Brussels Truck Caravan highlighted road transport as an effective means of shipping cargo between Asia, Europe, and the Pacific. Notably, the study found that infrastructure is not a key impediment to trade. This finding laid the groundwork for more focused research.
In 2007, the Black Sea Ring Highway Caravan collected further data on non-physical barriers to road transport in the Black Sea Economic Cooperation (BSEC) region—a concrete first step towards the development of an integrated road transport market.
In 2008, building on all of these initiatives, the IRU’s New Eurasian Land Transport Initiative (NELTI) investigated the feasibility of Eurasian land transport for commercial goods. In June 2009, NELTI expanded possible routes to China and Afghanistan, and developed a road map to reduce the time and cost of road transport between China and Europe.
IRU’s NELTI results showed a high competitive potential for the development of alternative trade routes, but revealed that 40 percent of road transport time along the Silk Road is lost due to inappropriate border crossing procedures—not to ineffective infrastructure (the common misconception). Additionally, some 25 percent of transport costs were due to payments and levies, both official and unofficial, paid by drivers at borders.
Confirming this, the Economic Cooperation Organisation (ECO)—IRU Silk Road Truck Caravan travelled from Islamabad to Istanbul in 2010 to collect data on border waiting times, customs procedures, and road charges. Research clearly demonstrated that most barriers stem from the inefficient implementation of key UN multilateral trade and road transport facilitation instruments. ECO followed up in 2011 with regular monitoring of trucks, which proved 30 percent of transport time is lost at ECO borders and “unofficial payments” account for 28 percent of transport costs.
IRU’s efforts to revitalize the Silk Road point to the need to streamline border crossing procedures by ratifying and strictly implementing UN multilateral trade and road transport facilitation instruments. This action will significantly reduce transport times and costs, and greatly enhance road transport efficiency without further infrastructure spending.
This article was made possible with the help of Virginia Tanase, senior transport specialist in the Transport, Water, Information & Communication Technologies Department of the World Bank.