CHAPTER 2
The LLDC Access Problem and the Performance of Trade Corridors
The constraints landlocked developing countries (LLDCs) face in their access to seaports puts them at a greater disadvantage than other country groups, even compared to least developed countries (LDCs). The severity of this disadvantage in terms of lesser trade, lower development level, and smaller economic growth has been well documented (Chowdury 2005; Faye et al. 2004).1 Until recently, little effort has been devoted to investigating LLDCs’ access problem, to analyzing how the function of transit corridors affect trade at the microeconomic level, or to determining what policies might improve the performance of corridors. For some time, the access problem has been thought of in terms of additional transportation costs, for instance, as measured by macroestimates such as the CIF/FOB (Cost, Insurance, and Freight/Free on Board) ratios comparing LLDCs to average coastal countries. However, research documented in Arvis et al. (2010) has shown that macroestimates are not reliable and that it is essential instead to look at service delivery to the trader, exporter, or importer to measure total logistics costs of trade on corridors; in other words, transportation costs alone do not take into account other important outcomes in corridor performance, such as delays, reliability, or service quality. Thus, this chapter will analyze the corridor and transit supply chains to understand 13