Trade and Transport Facilitation Audit of the Baltic States (TTFBS): on a Fast Track to Economic Development
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The World Bank Public Disclosure Authorized Trade and Transport Facilitation Audit of The Baltic States (TTFBS): On a Fast Track to Economic Development Public Disclosure Authorized Public Disclosure Authorized Prepared by Lauri Ojala, Tapio Naula and Torsten Hoffmann for the Infrastructure and Energy Services Department Public Disclosure Authorized Europe and Central Asia Region February 2005 © 2005 The International Bank for Reconstruction and Development / THE WORLD BANK 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. Published for The World Bank by Logistics, The Turku School of Economics and Business Administration, Rehtorinpellonkatu 3, 20500 Turku, Finland e-mail: [email protected] All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of The World Bank. Printed in Paino-Raisio Oy, Finland First printing February 2005 This paper is published to communicate the results of the recent TTFBS study in the 3rd Transport Minister Seminar of The Baltic States, held in Vilnius, February 3-4, 2005. The typescript of this paper, therefore, has not been prepared in accordance with the procedures appropriate to formal printed texts and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed here are those of the authors and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries. ISBN 951-564-250-7 2 Acronyms ........................................................................................................................................................5 Foreword .........................................................................................................................................................7 EXECUTIVE SUMMARY .............................................................................................................................9 1. KEY FINDINGS.....................................................................................................................................9 2. DIAGNOSTIC IN BRIEF.......................................................................................................................9 3. RECOMMENDATIONS ......................................................................................................................18 A Methodology of the report ....................................................................................................................22 A.1 Strategic Context ........................................................................................................................22 A.2 Objectives and Methodology of the Trade and Transport Facilitation Audit .............................23 A.3 Diagnostic of the Existing Situation...........................................................................................23 A.4 Action Plan.................................................................................................................................24 B Macroeconomic overview of the Baltic States .....................................................................................25 B.1 The Baltic States are the fastest growing acceding countries.....................................................25 B.2 Recent trends in industrial production........................................................................................27 B.3 Inflation, wages and unemployment...........................................................................................29 B.4 External balance .........................................................................................................................31 B.5 Structure of foreign trade............................................................................................................32 B.6 Foreign direct investments (FDI) ...............................................................................................33 B.7 Business environment in the Baltic States– International comparison.......................................35 C Infrastructures available for international trade ....................................................................................39 C.1 Free Zones in the region.............................................................................................................39 C.2 Banking, Finance, Insurance and legal services .........................................................................40 C.3 Access to business information ..................................................................................................41 C.4 Customs services ........................................................................................................................41 D Transport infrastructure developments .................................................................................................48 D.1 Roads and road transport............................................................................................................48 D.2 Maritime transport and ports ......................................................................................................51 D.3 Railways .....................................................................................................................................55 D.4 Aviation......................................................................................................................................60 D.5 Ongoing and planned infrastructure projects..............................................................................66 E Markets for Transport and Logistics Services ......................................................................................79 E.1 Structure of the supply and demand by mode of transportation .................................................79 E.2 Other logistic services available to exporters and importers ......................................................96 E.3 Governance and regulation of transport services........................................................................96 E.4 Price mechanisms .....................................................................................................................104 E.5 Business Practices and Operational Efficiency ........................................................................113 E.6 Traders’ views on EU enlargement ..........................................................................................121 E.7 Obstacles to the development of service quality ......................................................................127 F Characteristics of the Russian market for EU traders .........................................................................132 F.1 Overview of trade barriers........................................................................................................132 F.2 Perception of the Russian business environment in a TEDIM survey......................................132 F.3 The new customs code of the Russian Federation....................................................................134 F.4 Documents required in trade with Russian Federation.............................................................136 F.5 The “Green Line” customs project ...........................................................................................138 G Facilitation issues with non-EU countries ..........................................................................................139 G.1 Border crossing of goods..........................................................................................................139 G.2 Transit issues ............................................................................................................................143 G.3 Customs clearance efficiency ...................................................................................................145 G.4 Other qualitative issues.............................................................................................................146 H Matrix of recommendations................................................................................................................148 References ...................................................................................................................................................150 3 4 Acronyms ACAS Airborne Collision Avoidance System Acquis Acquis Communautaire, the body of EU legislation accepted by members AETR European Agreement on the Work of Crews in International Road Transport ASYCUDA Automated SYstem of CUstoms Data management developed by UNCTAD ATA carnet A customs document for temporary import of items free of duties BASA Bilateral Air Services Agreements, an international aviation convention BEEPS Business Environment and Enterprise Performance Survey (EBRD and WB) CAA Civil Aviation Authority CAGR Compound average annual growth rate CEE(C) Central and Eastern Europe (-ean Countries)