impediments along a logistics chain in the South Asia sub-region, consisting of Bangladesh, Bhutan, Nepal and eastern India and the seven northeastern Indian states.<sup>9</sup> This study examined commodity flows in domestic, regional, and international routes currently in use and associated logistic barriers.<sup>10</sup> In another recent study the Research and Information Systems for the Non-Aligned and Other Developing Countries (RIS) (2004) examined transport infrastructure in road, rail, air, and port networks in South Asia. The authors identify the potential for regional cooperation in improving the conditions in each area.

In order to highlight conditions in South Asia it is useful to compare the region’s performance with others. This includes in particular East Asia, given its geographic proximity and emergence of China as an important economic actor, among other factors. The following section provides a brief outline of efficiency and capacity constraints in South Asia within this context in: (1) port efficiency and infrastructure, (2) land transportation including roads and railways, (3) customs and border crossing (4) standards and technical regulations, and (5) information technology and e-commerce.

# (1) Port Infrastructure and Efficiency

Air and maritime ports in South Asia are generally considered less competitive than those in East Asia. Figure 4 shows that infrastructure and efficiency in ports in South Asia are lower than those in East Asia. For example, it takes only a couple of hours at the port of Singapore or Laem Chaband in Thailand to clear a vessel. In contrast, it takes 2 to 3 days for ports in Bangladesh (RIS, 2004).<sup>11</sup> It takes 30-35 days for goods shipped via container from the U.S. West coast to Pakistan. Port efficiency is highly correlated with shipping costs. Clark, Dollar, and Micco (2004) find that improving port efficiency from the 25<sup>th</sup> to 75<sup>th</sup> percentiles lowers shipping costs by more than 12 percent.<sup>12</sup> Tariffs for port entry are part of this total and can be high in South Asia. The port at Jawaharlal Nehru in India of which about 75 percent of calls are direct, for example, averages $20,000 for a call by a 4000 TEU ship. Cargo dwell time at the Dehli airport averages 2.5 days where the norm is 12 hours (Roy, 2004). Given the current low level of port efficiency in the region, South Asia could expect significant gains from improving ports to lower transactions costs and facilitate trade.

> Karachi (Pakistan) have obtained necessary approvals under the ISPS (See; Kruk). The costs of meeting these and other security protocols and extending coverage to other ports in the region, however, are likely substantial. New mechanisms to support regional cooperation and infrastructure upgrades in security will be critical to expanded trade opportunities.

> 9 The states in eastern India are West Bengal, Uttar Pradesh, Bihar and Orissa. The northeastern Indian states include Assam, Mizoram, Nagaland, Arunachal Pradesh, Tripura, Meghalaya and Manipur.

> 10 See page 34 in Subramanian and Arnold (2001) for the list of routes and commodities.

> 11 One recent study found that the major barrier to export logistics in Bangladesh centers on inefficient ports and the shipping sector. See; Arnold (2004).

> 12 Among the factors that affect port efficiency, Clark, Dollar, and Micco (2004) examine infrastructure, organized crime, and regulation. They find that infrastructure and organized crime exert a significant positive and negative influence respectively on efficiency. In addition, excessive regulation reduces efficiency.

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