Presentation on ADB Study on Business

Presentation on DRAFT ADB Study on Business
Process Analysis (BPA) on Export of Orange
from Bhutan and Import of Fruit Juice from
Bangladesh, August-November 2012
Achyut Bhandari, ADB National Expert on
Trade Facilitation
 Background
 Coverage
of BPA study and its
major findings
 Refinements to be done by
new studies
 Lessons learnt
Three separate studies on BPA) undertaken by 3
national consultants on 3 corridors & consolidated
by a sub-regional consultant
Corridor 1: Kakarbhitta (Nepal) – Panitanki (India) –
Fulbari (India) Banglabanda (Bangladesh)
Corridor 2: Phuentsholing (Bhutan) -Jaigaon &
Changranbanda (India) – Burimari – Dhaka
(Bangladesh)
Corridor 3: Kathmandu - Birgunj (Nepal) - Raxaul
(India) – Kolkata/Haldia (India)
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Traded products for study in Corridor 1 :
Export of lentils from Nepal & import of lead
acid accumulator (LAA) from Bangladesh
Traded products for study in Corridor 2 :
Export of orange from Bhutan & import of
fruit juice from Bangladesh
Traded products for study in Corridor 3:
Export of carpets and import of crude soya
bean oil (CSBO) to and from third countries
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Export of orange to Bangladesh in 2011-2012
Import of fruit juice (bottles and tetra pack) from
Bangladesh in 2011-2012
Distance covered for study: Phuentsholing - Dhaka
for exports, and Dhaka - Phuentsholing for imports
(460 KMs)
National expert from Bhutan covered the study on
Phuentsholing-Burimari sector (115 KMs), while
national expert from Bangladesh covered it on
Burimari - Dhaka (345 KMs) for both exports and
imports
Presentation based on draft consolidated study &
Bhutanese national consultant’s experience
Procedures and parties involved in export and import in SASEC
sub-region
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Relatively less number of procedures and parties
involved in import compared to export
Exports of orange from Bhutan to Bangladesh face
highest number of business procedures and
second highest number of parties involved in trade
of the two products through Corridor 2
Bangladesh appears to be more business friendly in
both export and import in SASEC sub-region
Trade in Nepal and Bhutan involves relatively
higher number of procedures and parties along
corridors 1 and 2
Private sector is relatively more involved in trade in
Bangladesh, compared to Bhutan and Nepal
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Procedures and documents
Export of orange: 14 parties involved and 23
separate approaches to be made,
(To comply with 5 procedures, 9 documents
and 26 copies)
Import of fruit juice: 19 parties involved with
16 separate approaches to be made,
(To comply with 4 procedures, 12 documents,
and 44 copies)
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Documents needed for trade
Trade of orange
32 documents (X 14, M
18), 95 copies (x 26, M 69)
Trade of fruit juice 25 documents (X 9, M
16), 74 copies (X 30, M 44)
25 documents out of 32 on trade of orange
are submitted manually indicating that both
Bangladesh & Bhutan can gain much through
introduction of electronic documents
Time taken to complete a procedure for:
Export of fruit juice from B’desh – 2.78 days
Import fruit juice by Bhutan – 1.56 days
Export of orange by Bhutan – 1.78 days
Import of orange by Bangladesh – 2.29 days
Cost to complete a procedure (in U.S $)
Export of orange : 31.66
Import of orange: 17.81
Total
: 49. 47
Export of fruit juice: 58.62
Import of fruit juice: 32.98
Total
: 91.60
BPA total time, cost
Orange trade
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Fruit juice trade
Procedures
32
25
Time (days)
18.60
20.13
Cost ($)
680.59
527.61
X & M cost vary widely across products
Study finds costs to be significantly lower than
World Bank findings in 2012 Doing Business
Report, 2013
On orange, export: $444.44/$2,230.00; import
:$236.15/$1430.00
On fruit juice, export: $224.60/$1025.00;
import: $303.01/$2,330.00
2.1 Obtain
Trade
License
Bangladeshi
Importer
1. BUY
Bhutanese
Exporter
Importer
’s
Bank
Exporter’
s
Bank
2.2 Obtain
BCCI
Membership
RBP
2.3 Obtain
Token
Number
BC
CI
2.4 Obtain
Membership
with BEA
2.5 Apply
for Phytosanitary
Certificate
2.5 Apply
for RAC &
FHCC
BE
A
2.7 Apply
for Labor
Permit
3. PAY
RTI
O
2.8 Obtain
Work Permit
2.9 Complete
Export
Documentati
on
2.10 Obtain
Export
Declaration
2.11
Transport
to Jaigoan/
Changraban
2.12
da
BAFR
A
Mo
H
DoL
DoI
CF
A
RRCO
INDIAN
CUSTOMS
INDIAN
SECURITY
Step
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Process
Buy (e)
Obtain Trade License
Become BCCI Member
Obtain Token Number
Become BEA Member
Apply for Phyto-sanitary Certificate (e)
Apply for COO, ARAC & FHCC
Apply for Labor Permit (e)
Obtain Work Permit
Complete Export Documentation
Obtain Export Declaration
Transport to Jaigaon / Changrabanda
Transport to Burimari
Pay (e)
TOTAL
Time in Days
2.00
0.50
0.50 (-0.50)
1.00 (-1.00)
0.50
1.00 (-0.50)
0.50
3.50 (-1.50)
1.50 (-0.50)
0.25
0.25
0.25
0.25
7.00 (-2)
19.00 (13)
2.1 Obtain
Trade
License
Bangladeshi
Exporter
1. BUY
2.2 Register
for Import
House
Permit
2.3 Obtain
Import
License
2.4 Issue
Letter of
Guarantee
Bhutanese
Importer
2.5 Arrange
Transport
2.6 Clear
Goods at
Burimari
Importer
’s
Bank
Exporter’
s
Bank
3. PAY
2.7 Clear
Goods at
Changraban
da
2.8
Transport
goods to
Jaigoan/P/Li
ng
2.9 Complete
Import
Documentati
on
2.10 Obtain
RBP
RTIO
DoT
RRCO
TRANSPORTER
BORDER
SECURITY (INDIA)
BORDER
SECURITY (B/DESH)
Customs
(Bangladesh)
Customs
(India)
CF
Step
Process
1
Buy (e)
2
Obtain Trade License
3
Register for Import House Permit
Time in Days
2.00
0.50
0.50 (-0.25)
4
5
6
7
8
9
Obtain Import License
Issue LoG
Arrange Transport
Clear Goods at Burimari
Clear Goods at Changrabanda
Transport to Jaigaon /
Phuentsholing
1.00 (-0.50)
0.50 (-0.25)
1.00 (-0.50)
0.13
0.12
0.25
10
Complete Import Documentation
0.50 (-0.25)
11
12
Obtain Import Declaration
Pay (e)
TOTAL
0.50 (-0.25)
7.00 (-2.00)
15.00 (11.00)
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No consultation meeting for data verification
Difficult to obtain precise cost figures
regarding all cost elements leading to
estimation
No previous studies to compare data and
findings
Officials and stakeholders/actors not aware
of BPA process
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Time Release Study (TRS) will give a more precise
time and cost involved in from the stage of
cargo arrival at customs house to removal of
cargo including unloading & storage, submission
of declaration/clearance documents, customs
inspection and release
Time cost distance (TCD) will offer another
alternative to examine cost of trade by
estimating costs at different stages of
transportation of cargo (start point to border,
transit, transport to sea, unload/load for
carriage by ship and transport
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Lack of national law on exports except for
bilateral or regional trade agreements
Absence of a lead government agency
Procedures are not always transparent, can
change abruptly and are ad hoc in many
cases
Lack of coordination among agencies leading
to multiple documents and procedures
Many instances of hidden costs that are
difficult to estimate
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Low automation and little use of electronic
means in transferring documents
No single trade portal on comprehensive
trade information & existing Government
portals not up-to-date
No standard procedure for data keeping
Low involvement of private sector in trade,
but private sector itself not well organized
No bilateral or sub-regional transport
agreement
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Poor road conditions leading to delays
Lack of warehouses and parking spaces
Congestion at Phuentsholing (e.g., customs
formalities completed in 5 locations)
No integrated check posts
Poor customs infrastructure and offices
Unorganized trading sectors
Delay in processing payments
Difficult to verify data due to lack of earlier
studies