clearance and the quality of domestic trucking and customs brokerage services. Customs accounts for about a third of total clearance time (Arvis, Mustra, and others 2007)—a fact that underlines the continued importance of facilitation efforts to further integrate border agencies. In some regions additional coordination efforts are needed to reduce multiple inspections of shipments. For instance, while in South Asia only 3 percent of shipments are inspected on more than one occasion, the rate is up to four times as high in other regions (East Asia and Pacific, Europe and Central Asia, Sub-Saharan Africa). Accordingly, discussions on improving border agency cooperation and the developing single window regimes remain crucial. Clearance times vary greatly by region (figure 3.1). While the clearance of imported goods takes about 1.5 days in the East Asia and Pacific region, it takes as long as 3 days in Sub-Saharan Africa. Moreover, clearance time as a percentage of total lead time also differs substantially by region. For example, clearance without physical inspection represents 25 percent of total lead time in the Middle East and North Africa, but 50–60 percent in Europe and Central Asia and in South Asia. Nearly every country uses some information and communications technology for customs. But most countries need to upgrade information technology for other border management agencies—to rationalize and simplify agency procedures, and to better exchange information with other trade related agencies and with trading community members (for example, freight forwarders). In the most recent LPI (Arvis and others 2010), a large percentage of survey respondents describe certain areas of the logistics environment in each LPI quintile “improved” or “much improved” since 2005. Progress for some areas is more noticeable in the higher LPI quintiles (table 3.2). Yet even in the fi ft h (bottom) quintile, marked improvement was seen for information and communications technology (ICT) infrastructure, private logistics services, and logistics regulations. Progress for border agencies other than customs—and for transport infrastructure and corruption—seems less widespread in the fi fth quintile. Ports and corridors in Central and Eastern Africa face the most severe trade facilitation challenges. B O R D E R M A N A G E M E N T M O D E R N I Z AT I O N
3 Border management modernization and the trade supply chain
and rail) and on systems and procedures for customs processing and clearance. Such eff orts to make the flow of trade cheaper, faster, and more reliable have achieved much progress—though more work is needed. The 2007 and 2010 LPIs (Arvis, Mustra, and others 2007; Arvis and others 2010) show encouraging trends, reflecting successful trade facilitation projects. For example, in port management, the separation of commercial activities from statutory and regulatory missions of the port authority is now the norm in developing countries, with many examples of successful private sector participation in container terminal operations. Automated customs procedures are now commonplace—few countries lack them. A study by the World Bank, the International Monetary Fund, and the World Customs Organization found that each developing country customs agency included in the study had an automated declaration processing system, some sort of formalized risk management, a formalized process for private sector consultation, an active dialogue with the customs administrations in neighboring countries, and a general understanding of the need to balance control and revenue collection with trade facilitation (World Bank 2006). None of these were found in any of the other border management agencies engaged in processing and clearing import, export, and transit consignments. Offering grounds for hope, the latest LPI (Arvis and others 2010) reveals modest but positive trends in key areas such as customs, investment in private services, and the use of information and communications technology for trade. Customs are still ahead of other border agencies across all performance levels, though the gap remains wider for countries with low index rankings. Customs procedures in all regions—including high income Organisation for Economic Co-operation and Development (OECD) countries—are converging and, with wide use of prearrival clearance, online submission, and postclearance audit, have improved much more than have procedures at other border agencies. Logistics overperformers (countries higher on the LPI than their incomes would predict) have consistently invested in reforms and improvements. Highlighted in the LPI are new areas that need more attention, such as the coordination of agencies involved in border
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