UNESCAP Regional Conference of freight forwarders, multimodal transport

UNESCAP Regional Conference of freight forwarders, multimodal transport
operators and logistics service providers
20 June 2014 Beijing, PRC
The impact of logistics infrastructure
and facilitation on the ASEAN
Economic Community Development
Associate Professor Ruth Banomyong (Ph.D.)
1
Head of International Business, Logistics Transport, Thammasat Business School
Director of Logistics Research Center, Thammasat University
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
GSM is a simulation model based on Spatial Economics, aka New Economic
Geography.
Road network in IDE/ERIA-GSM 4
•
•
•
•
•
2
Introduction
The ASEAN Economic Community (AEC)
The Master Plan on ASEAN Connectivity
(MPAC)
The impact of the AEC
ASEAN 2025?
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Ruth Banomyong (PhD)
3
• Faculty at Thammasat
Business School since
1993
• Winner James Cooper
Cup for best PhD in
logistics 2001 from CILT
UK
• Consultant for World
Bank, Asian Development
Bank, UNCTAD, ESCAP,
OECD, ASEAN, etc.
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
ASEAN
The Association of Southeast Asian Nations, or ASEAN
Regional Inter-governmental Organization
10 Members
4.4 Million KM2
600+ million people (Growth 1.5%)
4
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
The Three Pillars
5
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Single Market and Production Base
Five core elements
Liberalisation
Facilitation
Tariff and NTB elimination
Synchronized external tariff
alignment
Free Flow of goods
Customs integration Standards
and technical barriers to trade
Free Flow of services
MRAs on professional services;
professional exchange
All industries and services
incidental to these industries
for ASEAN investors
Free Flow of investment
Transparency ; streamlined
Procedures, avoidance of double
taxation ; joint promotion
Relax capital control measures
on intra-ASEAN portfolio
investment
Free Flow of capital
Full market access and
national treatment Remove
substantially all restrictions on
trade in services
Harmonize capital market standards ;
facilitate market driven efforts to
establish exchange and debt market
linkages
Free Flow of skilled labour
Remove discrimination in
employment
Harmonization of standards in
education and training ; MRA on
vocational training
Conduct a bi-annual review to monitor the status, progress and
effectiveness of the PIS roadmaps to ensure timely implementation
(Priority Integration Sectors : PIS)
(Food, Agriculture and
Forestry)
6
Identify sector-specific projects or initiatives through regular
dialogues or consultation with stakeholders, particularly the private
sector
1) GAP, GAHP, GHP, GMP, HACCP.
2) Harmonise SPS, MRLs, Safety and Standard, animal health control, chemical in aquaculture
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
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•
•
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Master plan on ASEAN
Connectivity (MPAC) is a key for
AEC integration. Soft and Hard
Infrastructure will be developed
according to this plan. Routes and
conditions are updated at 2010,
2015, reflecting the development
according to MPAC.
Time and costs at the border
crossing half in 2015 due to AEC,
and roughly double in 2020
according to congestion.
Tariff/NTB: Tariffs and NTBs are
updated according to various
FTA/RTA including AEC.
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
ASEAN Scorecard
AEC Pillar I: Single
Market and
Production Base
AEC Pillar II:
Competitive
Economic Region
AEC Pillar III:
Equitable Economic
Development
AEC Pillar IV:
Integration into the
Global Economy
• Free Flow of Goods
• Free Flow of
Services and
Skilled Labor
• Free Flow of
Investment
• Freer Flow of
Capital
• Priority Integration
Sectors (PIS)
• Food, Agriculture
and Forestry
• Competition Policy
• Consumer
Protection
• Intellectual
Property Rights
• Infrastructure
Development
• Development of
Small and Medium
Enterprises (SMEs)
• Initiative for
ASEAN Integration
(IAI)
• External Economic
Relations
To ensure a timely implementation of the AEC initiatives, ASEAN has established
a monitoring mechanism called the AEC Scorecard. As a compliance tool, the
AEC Scorecard reports the progress of implementing the various AEC measures,
identifies implementation gaps and challenges, and tracks the realisation of the
AEC by 2015.
Tracking the AEC: Milestones and Accomplishments
8
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Scorecard Initial Qualitative Assessment
Overview
Connectivity
Dimension
Strategy
1.
2.
3.
4.
Complete the ASEAN Highway Network
Complete the implementation of SKRL project
Establish an efficient and integrated IWT network
Accomplish an integrated, efficient and competitive
maritime transport system
5. Establish integrated and seamless multimodal transport
Physical
system to make ASEAN the transport hub in the East Asia
region
6. Accelerate the development of ICT Infrastructure and
services in each of ASEAN Member States
7. Prioritise the processes to resolve institutional issues in
ASEAN energy infrastructure projects
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Scorecard Initial Qualitative Assessment
Overview
• In terms of physical connectivity a check–list of what is
missing would have been sufficient to reflect upon the
actual physical links
But
• It is not enough if the goal is to understand the output
and outcome of such physical connectivity.
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Scorecard Initial Qualitative Assessment
Overview
1. Fully operationalize the 3 framework Agreements on transport
facilitation (AFAFGIT; AFAFIST; AFAMT)
2. Implement initiatives to facilitate inter–state passenger land
transportation
3. Develop the ASEAN Single Aviation Market
4. Develop an ASEAN Single Shipping Market
5. Accelerate the free flows of goods within ASEAN region by eliminating
barriers to merchandise trade.
6. Accelerate the development of an efficient and competitive logistics
Institutional
sector, in particular transport, telecommunication and other
connectivity–related services in the region
7. Substantially improve trade facilitation in the region
8. Enhance border management capabilities
9. Accelerate further opening of ASEAN member states to investments
within and beyond the region under fair investment rules
10. Strengthen institutional capacity in lagging areas in the region and
improve regional–sub–regional coordination of policies programmes and
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Synthesizing the Impact of Thailand’s
Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
projects.
Scorecard Initial Qualitative Assessment
Overview
• The concept of institutional connectivity requires additional
specification.
• Many of the devised key actions focus upon following up on
ASEAN member states in terms of ratification,
implementation of agreements and how liberalized market
access can be followed through as per the various
strategies.
• The devised key action can only reflect the status or the
possible direction and requires that additional attention be
paid to the formulation of each action to enable the
monitoring effort.
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Scorecard Initial Qualitative Assessment
Overview
1. Promote deeper intra–ASEAN social and
People to
cultural understanding
people
2. Encourage greater intra–ASEAN people
mobility
• The formulation of the actions under the people–to–
people dimension is more precise than the physical or
institutional connectivity, which readily facilitates the
monitoring process.
• However, the people–to–people dimension requires
additional work to identify and specify output and
outcome indicators.
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
ASEAN Strategic Point for Connectivity
Myanmar is an Important Strategic Point for Connectivity in East Asia
Kunming
Source：ERIA
India
Northeast
Kolkata
Mandalay
Dhaka
Kyaukphyu SEZ
Chiang Mai
Yangon
Thilawa SEZ
Bangkok
Mekong-India Economic Corridor Link
Chennai
Dawei SEZ
：Existing link
：Potential link to be developed
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Ho Chi Minh City
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Macro Logistics System Framework
Infrastructure
Service
Providers
Institutional
Framework
Logistics
System
Traders/
Manufacturers
15
Banomyong et al, (2008)
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
GSM is a simulation model based on Spatial Economics, aka New Economic
Geography.
Road network in IDE/ERIA-GSM 4
•
•
16
To simulate the dynamics of population
and industries for long-term
To analyze the effects of infrastructure
projects and customs facilitation on the
economic activities at prefecture level
FY2011
FY2012
Number of Cities
4,355
5,708
Number of Routes
7,203
10,792
Rest of the World
2 regions
(EU, USA)
63
countries
World Coverage
(Population)
63.9%
80.0%
World Coverage
(GDP)
81.9%
93.9%
Source: ERIA Report
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
GRDP Differences in Year 2030
This scenario shows
the economic impacts
of AEC comparing
without AEC.
AEC impact on overall
ASEAN members GDP
about 26,298 Million
USD or +0.32% GDP
17
GSM Analysis by Banomyong et al &
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
GRDP Differences in Year 2030
This scenario shows the economic impacts of
AEC comparing without AEC.
THAILAND Perspective
AEC affects positively for all provinces of Thailand.
AEC impact Thailand GDP about +1,806 Million USD, this
resulted +0.05% of GDP in 15 years after AEC Integration
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GSM Analysis by Banomyong et al &
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Supply Chain Re-design
after AEC
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
• Survey of +60 Potential Investors and Influencers from Japan
Note: Survey has done in Japan by the support of IDE-JETRO
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Degree of Attractiveness
• Myanmar and Vietnam are
potential investment destination
for Japanese Investor in
Automotive Industry
• Indonesia is significantly
attractive compare to Thailand
• Supply Chain Re-design mostly
effects Part Providers not Auto
Assemblers
Source: ASEAN Automotive Federation (2013)
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Degree of Attractiveness
• Singapore, Malaysia and Thailand are
major exporters of E&E in ASEAN (2011)
• Vietnam and Myanmar are mostly attract
Japanese Investor in E&E Industry
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Degree of Attractiveness
Textiles Export in 2009
Vol. Mkt.Share
• Indonesia, Thailand and Vietnam are major
exporters of Textiles in ASEAN (2009)
• Myanmar, Cambodia and Lao PDR are newly
attracted destination to Japanese Investors
Source: WTO
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Key player: The Logistics Service Industry
• The quality of logistics services depends
on
– The structure of the logistics industry
– Contractual arrangements for providing
logistics services.
• The size of the enterprises depends on
– Barriers to entry,
– Extent of regulation
– Level of demand.
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Structure of Logistics Industry and Service
• Trucking, warehousing, forwarding
and clearance firms tend to be small,
flexible and hesitant to invest
• Rail, ocean, and air transport
enterprises tend to be large and
formal with more investment
resources
• A mix of large and small provides the
best service
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Major Policy Areas for ASEAN Priority Integration
Sector Logistics Roadmap
1.
2.
3.
4.
5.
6.
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Encourage the Integration of the ASEAN National Logistics
Systems
(by increasing communications at the regional level to identify
actions in the logistics sector to support and facilitate trade flows
between ASEAN countries)
Encourage the Progressive Liberalization of Logistics Services
(to make them better able to respond to the opportunities
available for ASEAN integration and increasing competitiveness)
Increase Trade, Logistics and Investment Facilitation
(to identify the means needed to improve transport logistics
facilities and the priorities for investment)
Build ASEAN Logistics Capacity
(by encouraging human resource development in the sector, and
an environment conducive to developing the sector)
Promote ASEAN Logistics Service Providers
(by identifying them and providing channels for their greater
participation in the sector)
Promote Multimodal Transport Capacity
(especially containerized transport)
Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Structure of the ASEAN roadmap
NO.
MEASURES
IMPLEMENTING BODY
TIMELINE
SPECIFIC ISSUES
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I
Member country shall endeavour to achieve substantial liberalisation of
logistics services in the following sectors:
1
Maritime cargo handling services
CPC 741
Coordinating
Committee on Services
(CCS)
2013
2
Storage & warehousing services
CPC 742
CCS
2013
3
Freight transport agency services
CPC 748
CCS
2013
4
Other auxiliary services
CPC 749
CCS
2013
5
Courier services
CPC 7512**
CCS
2013
6
Packaging services
CPC 876
CCS
2013
7
Customs clearance services
CCS and Customs
Coordinating
Committee (CCC)
2013
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Structure of the ASEAN roadmap
Maritime transport services
8
International Freight Transportation
excluding Cabotage
CPC
7212
CCS
2013
Senior
Transport
Officials
Meeting
(STOM)
December
2008
CPC
7112
CCS and
relevant STOM
Working
Groups
Beginning
2008
CPC
7213
CCS and
relevant STOM
Working
Groups
Beginning
2008
Air freight services
9
Implement ASEAN Multilateral
Agreement of the Full Liberalisation
of Air Freight Services
Rail freight transport services
10
International rail freight transport
services
Road freight transport services
11
28
International road freight transport
services
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Structure of the ASEAN roadmap
II
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Enhancing Competitiveness of ASEAN Logistics Services Providers through
Trade (including Documentation Simplification) and Logistics (Transport)
Facilitation
II (a)
Trade and Customs Facilitation
II (b)
Logistics Facilitation
III
Expanding Capability of ASEAN Logistics Service Providers
IV
Human Resource Development
V
Enhance Multi-Modal Transport Infrastructure and Investment
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
• Development mostly are concentrated
• Countries with better Facilitation will have better impact.
• Soft Infrastructure better impact in short and medium range,
Hard Infrastructure better in long range.
• What about 10 years after AEC?
Industrial
Agglomeration
Automotive Cluster
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Synthesizing the Impact of Thailand’s Logistics Infrastructure Management and Supply Chain Redesign within the context of the ASEAN Economic Community (AEC)
Source: ERIA / IDE-JETRO GSM Team.
Economic corridors
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Social
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Safety and security
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Technological
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Fuel Efficiency
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Operational efficiency
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Environment
37
OM201 PRINCIPLES OF OPERATIONS MANAGEMENT
Competitiveness
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OM201 PRINCIPLES OF OPERATIONS MANAGEMENT