The silk road Forum, launched in Antalya in 2008 as a Turkish initiative, has started to flesh out action plans being implemented incrementally despite the many challenges that remain to be dealt with, customs and trade Minister Hayati Yazıcı has said.
In an interview with Today's Zaman, Yazıcı said there is huge trade potential to tap into among countries located along the Silk Road stretching from Central Asia to Europe, accounting for 22 percent of the world's trade volume, which amounts to some $30 trillion. “We are trying to simplify customs procedures to move goods faster along this path and we have made some progress on this issue,” he said, speaking against the backdrop of a meeting that brought together customs administration officials from the Silk Road countries in İstanbul last week. “The trade volume of the Silk Road countries has quadrupled in the last decade and there is a noticeable shift in the growth of these countries in contrast to Europe and other regions,” he added.
Emphasizing that the Silk Road is one of the world's longest and oldest international trade routes, the minister said what the Silk Road had historically done in helping with the development of the regions it passes through can be replicated today. “We see that Asia's share [of world export markets] was 39 percent in the year 2010, while it was 35 percent between the years 2007 and 2009. On the other hand, the share of Europe has declined from 44 percent to 39 percent. Africa's share remained at 3 percent, whereas that of America was 17 percent during the same period,” he explained, stressing that these figures show that the balance of world export markets has shifted from Europe to Asia.
Yazıcı underlined that the same growth can be seen in import figures as well. “While Asia's share in world imports was 30 percent in the year 2007, this figure reached 35 percent in 2010. European imports declined from 43 percent to 39 percent during the same period, whereas the import shares of America and Africa have remained constant,” he said. According to the International Monetary Fund (IMF), Asian countries are expected to post the highest growth performance in the year 2012, reaching 8 percent by the end of the year. The growth of the EU is expected to decline, however, in 2012 and to remain at a restricted level in the following years.
Silk Road transformation
Predicting that countries on the Silk Road path are on the brink of a transformation, the Turkish trade minister vowed that the Silk Road will become one of the main economic routes of the world economy, moving large amounts of goods and products from Central Asia to Europe or vice versa. “This transformation consists of efforts to revive the Silk Road via an extensive railway network, transportation lines, customs gates, energy corridors and natural gas pipelines, making this area a major player in the world economy,” he said, detailing Turkey's vision for the road.
Countries located on the historic Silk Road route are generally listed as China, Azerbaijan, India, Iraq, Iran, Kazakhstan, Kyrgyzstan, Mongolia, Uzbekistan, Pakistan, Russia, Syria, Tajikistan, South Korea, Afghanistan, Georgia and Turkey. There are other adjacent paths to the Silk Road that may bring more countries to the mix.
Yazıcı lamented that delays at customs gates between these countries hinder mutual trade. “We need to work on easing customs procedures in order to boost commerce on this ancient route,” he remarked, noting that reducing paperwork is the priority for participating countries.
Turkey's Kervansaray Project, a plan to help simplify border crossings on the Silk Road proposed and accepted at a meeting of customs administrations in Baku in 2009, is gradually being put into practice. The plan aims at lifting the barriers that impede the potential of the region, while eliminating the negative impacts of the delays at the borders. The Silk Road countries have already agreed on a pilot project route to test the commercial activity on this path, with technicians having completed the first field tests at customs gates recently.
The Turkish minister pointed out that the project is not only restricted to the historic Silk Road countries on the east-west line but also includes the north-south lines converging Europe with Asia and Africa.
“Our hope is that Ukraine, Egypt, Serbia, Italy, Bulgaria, Lithuania, Belarus and other EU and non-EU countries, and international organizations such as the UN, the World Customs Organization, the Economic Cooperation Organization (ECO), the International Road Transport Union (IRU) and the Turkish Council and Transport Corridor Europe-Caucasus-Asia (TRACECA) will be a part of this project,” he stated.
In a two-day İstanbul workshop titled “The Fifth International Forum on the Role of Customs Administrations on Promoting and Facilitating Trade among Silk Road Countries,” held last week, Turkey invited many countries, such as Serbia and Egypt, that were not on the ancient route. In the first test run of the Turkish Kervansaray Project, TRACECA was also involved.
Problems remain despite high hopes
Yazıcı noted that much needs to be done to turn this historic route into one of the main arteries for world trade. “Despite the increasing share of the Silk Road countries in world trade, the historic Silk Road's share of the transportation traffic between Asia and Europe is below 1 percent,” he said, lamenting the fact that of the traffic between Asia and Europe, 80 percent of industrial products are still transported by sea.
“The landlocked Silk Road countries cannot make use of the sea for shipping” he remarked. The minister highlighted issues like inadequate infrastructure at border crossings, increased vehicle searches, and frequent changes in administrative procedures and legislation as the biggest problems hindering the development of potential among Silk Road countries.
According to a study carried out by the Organization for Economic Cooperation and Development (OECD), customs procedures constitute about 15 percent of the cost of world trade. Even a 1 percent decrease in this rate will contribute about $40 billion to the world economy. Another OECD study estimated that a one-day wait at customs creates an additional burden corresponding to a 0.05 percent customs duty.
Yazıcı said Turkey's goal is to modernize border crossings, reduce route costs, increase the efficiency of customs administrations and improve international cooperation. “Our basic goal is to ensure that products we produce in this region are transported to recipient countries on the east-west axis in the fastest, easiest and safest way,” he explained.
The Silk Road Customs Cooperation Initiative, a Turkey-led project, is in its fifth year. The first meeting of the 14 countries involved was held in Turkey in 2008. The second and third meetings were held in Azerbaijan and Tehran in 2009 and 2010, respectively. The fourth was held in Batumi last year, with the fifth being held in İstanbul last week.