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The Key Design Concepts of the TTFSE Program
Reform
Leading to Reduced Costs for the Countries of the Region
Overly complex
customs procedures and inadequate infrastructure result in
added transport and trade costs for local producers and
consumers in the South East Europe region. The elimination of
these costs can help contribute to not only stimulating
economic development but also to alleviating poverty. A
successful reform of the customs service would not only reduce
the standing time for vehicles at borders in the region, a
major source of added costs, but also reduce the opportunities
for corrupt practices, the costs of which otherwise would be
passed on to consumers as well. The reform process requires a
change in the organizational culture of the Customs Services
and their associated government agencies. The change
management process will require new skills as well as new
attitudes on the part of many managers. The entire process may
take as much as ten years to be fully implemented.
Fast
Tracking
The need to
address these extra costs is urgent, in part to counter the
contractions in the economies of Balkan countries resulting
from the crisis in Kosovo, and to restore investor confidence
in order to attract foreign investment in the region. The
World Bank, therefore, has fast-tracked the preparation of the
projects in first six countries in the Program, moving from
design to implementation in less than half the normal time
required, and encouraged actions that would enable the two new
projects for FRY and Moldova to catch up with the others.
Regional
Character
The problems
affecting trade in the Balkans are regional in origin, yet
regional cooperation in the Balkan countries is deficient. The
TTFSE Projects have been regionally linked in order to promote
the cooperation of the participating countries and the mutual
sharing of concerns relative to the reform of their respective
Customs Services. A Regional Steering Committee (RSC) has been
created to assist such cooperation and facilitate the sharing
of information. All participating countries are represented on
this committee and signed a Memorandum of Understanding (MOU)
detailing its roles and activities. Regional information
sharing and learning programs are also being developed through
regional and inter-linking web-sites and distance learning
programs.
Reform Mixed
with the Provision of Infrastructure
The Program
focuses on implementing reforms that will result in increased
productivity on the part of the Customs Services. As a result
of this increased productivity, any one border crossing will
be able to process a greater number of crossings in less time
than is currently the case. When productivity increases after
the reforms are in place, the facilities at some border
crossings will need to meet projected increases in the flow of
trade and avoid bottlenecks due to this increased flow. In
such cases, the projects would cover physical investment in
the border crossings.
Interagency
Cooperation
The constraints
limiting efficient, timely, and professional processing of
vehicles at border crossing points are not the excusive
responsibility of national Customs Services. Rather the
cooperation of various agencies is essential. Security,
health, agricultural, and environmental controls must be set
within a comprehensive framework that facilitates rather than
encumbers trade.
Increased
Revenue and Cost Savings
The Earnings
from Customs Services frequently represent the largest source
of government revenue in the participating countries.
Increasing the transparency of operations is likely to assure
full valuation of goods and increase this revenue. The
introduction of new procedures and the associated increase in
productivity will reduce the level of staffing required,
opening the way in turn for the increased salary levels needed
to stimulate professionalism. The cost savings will also cover
the cost of the loan, and the increased trade resulting from
the reduced costs to trade and transport will increase
national revenues. Government contributions will fit within
the envelope of the current budget, eliminating the need for
increased counterpart funding.
Cooperative
Structure
The EU and the
US, both already active in the region are expected to be major
providers of the TA associated with the TTFSE. Indeed, the EU
was the first in the region to mobilize financial resources to
solve the border-crossing problem and the project builds on
this effort. A Customs and Fiscal Assistance Office (CAFAO)
under the auspices of the EU, for example, is already
operational in Bosnia and Herzegovina and similar projects are
underway in some of the other countries. Donors will closely
cooperate to eliminate duplication and ensure that reform will
be addressed in the way that is the least costly to the
government and consistent with the relevant countries' policy
obligations for future membership to the EU.
Participatory
Approach
The design and
implementation of the TTFSE is based on participatory
methodology, meaning that the projects under the Program
belong to the participating countries and need to be endorsed
and owned by the various stakeholders in each of the
respective countries. Consultations and user surveys were key
to the design phase, and mechanisms, including user surveys,
have been created to obtain user input in the creation of a
new professional culture for the trade sector, the improvement
of trade facilitation practices, and the monitoring and
evaluation process of the Program itself.
See also: TTFSE
Project Components
Program
Funding and Status |
