Towards An Electronic Trading Platform Pakistan Electronic Trading

Towards An ‘Electronic Trading Platform’ Pakistan Electronic Trading (PAKET) Network March 18, 2006 Mohammed Imani Executive Director Sidat Hyder Morshed Associates (Pvt) Ltd.

Outline n Pakistan Trade Statistics n Significance of Trade and Transport Facilitation n Single Window – Concept and Benefits n PAKET Study March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 1

Pakistan’s Trade Statistics n Trend Analysis 4. 3 Rupees (Trillions) 4. 0 3. 0 15% 2. 1 2. 0 1. 2 ‘ 01 ‘ 02 ‘ 03 ‘ 04 ‘ 05 ‘ 06 ‘ 07 ‘ 08 ‘ 09 ‘ 10 Source: Federal Bureau of Statistics. March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 2

Pakistan’s Trade Statistics n Trade to GDP Analysis 7. 0 35 34 6. 0 5. 0 32 4. 0 31 3. 0 30 % Rupees (Trillions) 33 29 2. 0 28 27 1. 0 Trade GDP 26 ‘ 01 March 18, 2006 ‘ 02 ‘ 03 ‘ 04 ‘ 05 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants % of Trade to GDP Source: Federal Bureau of Statistics. 3

Trade and Transport Facilitation Definition “The simplification and harmonization of international trade procedures” with trade procedures being “the activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade” Source: WTO March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 4

Cost – Benefit Analysis n Based on Results of Swedish Study (2002) n Cost of cumbersome procedures 2. 5 to 15 percent of trade value n Using 2. 5 percent this works out to at least 50 billion rupees A modest improvement of 2 percent can yield cost savings of at least One Billion Rupees per annum March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 5

Single Window Concept n Single Window (SW) is defined as a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transitrelated regulatory requirements. n If information is electronic, then individual data elements should only be submitted once. Source: UN/CEFACT March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 6

Single Window Benefits n n n Be a single source, integrated and standardized platform for meeting the requirements of all members of community Function as an e-commerce platform for the members of the community. Provide adequate, accurate and timely information Improve the response time of stakeholders to their customers Improve track and trace efficiency Provide shipment/ service visibility Generate alerts about delays or problems Enable moving towards similar procedures across all communities Provide for opportunities for re-engineering, adopting best practices Be easily accessible and secure Be easy to learn, operate and support March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 7

Potential Stakeholders Commercial Banks Insurance Companies Traders Pakistan Customs Transporters Freight Stations Port Authorities Weighbridge Operators PAKET Stevedores Ministry of Commerce Terminal Operators Shipping Agents Ministry of Ports and Shipping Clearing Agents Freight Forwarders March 18, 2006 State Bank of Pakistan Other Government Agencies International Trading Partners Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 8

Data Repetition in Trade Documentation Commercial Invoices Insurance 95% data repetition 70% data repetition Space Booking DG Declarations 40% data repetition Customs Declarations 30% data repetition 70% data repetition Export Permits 90% data repetition Request For Delivery 30% data repetition 70% data repetition Manifest Integrated Export Documents Source: Presentation on Capacity Building Workshop By Dagang Net Technologies. March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 9

PAKET Feasibility Study Scope of Phase I n Study existing requirements, procedures, and processes for the submission of import, export and transit documents and information to government n Identify/ascertain existing personnel resources within the relevant stakeholder organizations for project development, implementation, and operation n Identify and describe at least three ports with systems for electronic exchange of data March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 10

PAKET Feasibility Study Phase I Progress Pakistan Customs n Karachi Port Trust n Port Qasim Authority n Karachi International Container Terminal n Qasim International Container Terminal n State Bank of Pakistan n Trade Associations, etc. n March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 11

PAKET Feasibility Study Scope of Phase II n Assess overall organizational aspects of implementing PAKET n Examine legal issues, privacy legislation and data protection laws associated with Single Window n Assess potential impact of PAKET on existing systems, procedures, human resources n Consider “best practice” methods in existing electronic platforms in other countries where such systems have already been successfully implemented and recommend possible options for Pakistan March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 12

Critical Success Factors n Strong political will n Sponsorship at highest level n Legislative framework n Clear strategic plan n Close cooperation between government and business community n Streamlining and simplification of supply chain processes and procedures n Rationalization and harmonization of trade laws and regulations n Standardization of data definitions and use of standard protocols for connectivity and data sharing March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 13

Food for Thought n Single Window - source for revenue generation and technological excellence n Single Window is about economic development NOT technology implementation n Single Window is about implementing CHANGE n Tough but prudent decisions will have to be made March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 14

Thank You March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 15