COMCEC TRANSPORT OUTLOOK 2014

COMCEC TRANSPORT OUTLOOK 2014 Dr. İsmail Çağrı Özcan COMCEC Coordination Office Transport Working Group Meeting March 13th, 2014 Ankara, Turkey

OUTLINE 1. IMPORTANCE OF TRANSPORT INDUSTRY WITHIN COMCEC FRAMEWORK 2. SCOPE OF THE OUTLOOK 3. TRANSPORTATION&TRADE 4. TRANSPORTATION INFRASTRUCTURE 5. TRANSPORTATION PRIVATIZATION 6. TRANSPORTATION&ENVIRONMENT 7. TRANSPORTATION MOVEMENTS 8. POLICY IMPLICATIONS

IMPORTANCE OF TRANSPORT INDUSTRY WITHIN COMCEC FRAMEWORK One of the three principles of COMCEC Strategy is enhancing mobility (the other two are strengthening solidarity and improving governance) Transportation is explicitly declared by COMCEC as one of the three priority sectors together with agriculture and tourism Transportation is one of the six cooperation areas (the others are trade, tourism, agriculture, poverty alleviation, and finance) specified by the COMCEC Strategy

SCOPE OF THE OUTLOOK 1. Transportation and trade 2. Transportation infrastructure Multi-modal freight transportation Five dimensions covered by the outlook 3. Transportation privatization 4. Transportation and environment 5. Transportation movements

TRANSPORTATION&TRADE (1) Total goods trades (excluding oil exports) and LPI scores in OIC countries in 2010 ln (Total goods trade excluding oil exports) 27 26 25 24 23 22 21 20 19 Indonesia Turkey Malaysia Saudi Arabia Iraq y = 2.67x + 16.16 Kuwait Lebanon Bahrain Sierra Leone Benin Guinea-Bissau Gambia 1.5 2.0 2.5 3.0 3.5 4.0 Logistics performance index (LPI) score Source: The World Bank World Development Indicators and Economywatch

TRANSPORTATION&TRADE (2) 2012 LPI scores and 2012-2013 GCI scores of the OIC countries Global competitiveness index (GCI) 2012 2013 6 5.5 5 4.5 4 3.5 3 2.5 Sierra Leone Guinea Bahrain Saudi Arabia GCI = 1.20LPI + 0.81 Malaysia Turkey 1.5 2 2.5 3 3.5 4 Logistics performance index (LPI) 2012 Source: The World Bank World Development Indicators and Global Competitiveness Index UAE

TRANSPORTATION&TRADE (3) Change in total fleet (in dead weight tons in thousands) by flag of registration for the period 1998-2013 (value in 1998=100) 300 World DE1 250 Developing economies (DE1) LDC Developed economies (DE2) Total fleet index 200 150 World EU27 G20 OIC G8 DE2 Least developed countries (LDC) EU27 (European Union) G8 100 LAS G20 League of Arab States (LAS) 50 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Organisation of the Islamic Conference (OIC) Year

TRANSPORTATION&TRADE (4) The liner shipping connectivity index by OIC regions in the 2004-2013 period 30 Liner shipping connectivity index (maximum value in 2004=100) 25 20 15 10 5 World OIC-MENA OIC-Asia OIC-Sub Saharan Africa 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year

TRANSPORTATION&TRADE (6) The burden of custom procedures by OIC regions in the 2007-2012 period 4.60 Burden of Custom Procedures by Regions (1=extremely inefficient to 7=extremely efficient) 4.40 Burden of Custom procedures 4.20 4.00 3.80 3.60 World OIC-MENA OIC-Asia 3.40 3.20 OIC-Sub-Saharan Africa 3.00 2007 2008 2009 2010 2011 2012 Year Source: The World Bank World Development Indicators

TRANSPORTATION INFRASTRUCTURE The indexes for the quality of transport infrastructure Region Quality of overall infrastructure Quality of roads Quality of railroad infrastructure Quality of port infrastructure Quality of air transport infrastructure World Average 4.30 4.00 3.10 4.30 4.60 OIC Average 3.93 3.72 2.45 3.97 4.31 OIC-Sub Saharan Africa 3.26 3.00 1.89 3.79 3.73 OIC-MENA 4.56 4.48 2.59 4.44 4.89 OIC-Asia 4.00 3.68 3.11 3.52 4.31 OIC Maximum 6.4 (UAE) 6.5 (UAE) 4..9 (Malaysia) 6.4 (UAE) 6.6 (UAE) OIC Minimum 2.1 (Guinea) 2 (Guinea) 1 (Lebanon) 1.5 (Kyrgyz Republic) 2.7 (Sierra Leone) OIC Median 3.7 (Indonesia and Tajikistan) 3.3 (Algeria 3.4 and Tajikistan 3.2) 2.1 (Brunei Darussalam) 3.9 (Egypt 4 and Uganda 3.8) 4.2 (Indonesia and Tajikistan) Source: Compiled by the author using The Global Competitiveness Report

TRANSPORTATION PRIVATIZATION (1) Timeline of the initial transport PPI projects in the OIC region First transport PPI project in the OIC region in Indonesia (first in OIC-Asia) First transport PPI project in the OIC Sub- Saharan Africa (Mozambique) First transport PPI project in the OIC MENA (Turkey) Second OIC Asia country implementing a transport PPI project (Malaysia) Second OIC Sub-Saharan Africa country implementing a transport PPI project (Cameroon) Second OIC MENA country implementing a transport PPI project (Yemen) 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source: Prepared by the author using World Bank PPI Database

TRANSPORTATION PRIVATIZATION (2) Distribution of PPI projects by infrastructure sectors in the 1990-2012 period Sectors Number of PPI projects Percentage shares Energy 2,653 45.8% Telecom 843 14.5% Transport 1,473 25.4% Water and sewerage 814 14.0% Total 5,783 100.0% Source: The World Bank Private Participation in Infrastructure Database

TRANSPORTATION PRIVATIZATION (3) Distribution of the transport PPI projects by PPI-types in the 1990-2012 period Sector Concession Divestiture Greenfield project Management and lease contract Total Energy 200 426 1,983 44 2,653 Telecom 9 195 632 7 843 Transport 863 69 459 82 1,473 Water and sewerage 334 29 330 121 814 Source: The World Bank Private Participation in Infrastructure Database

TRANSPORTATION PRIVATIZATION (4) Changes in the cumulative number of PPI projects by regions for the period 1990-2012 1800 1600 Number of PPI projects (cumulative) 1400 1200 1000 800 600 400 East Asia and Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa South Asia 200 Sub-Saharan Africa 0 Year

TRANSPORTATION PRIVATIZATION (5) Changes in the number of PPI projects in OIC regions in the 1990-2011 period 35 30 25 Number of PPI projects 20 15 10 MENA Asia Sub-Saharan Africa OIC 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Source: The World Bank Private Participation in Infrastructure Database

TRANSPORTATION PRIVATIZATION (6) Changes in the number of transport PPI projects by regions in the 1990-2012 period 140 Number of transport PPI projects implemented 120 100 80 60 40 20 East Asia and Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa South Asia Sub-Saharan Africa 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year World Source: The World Bank Private Participation in Infrastructure Database

TRANSPORTATION PRIVATIZATION (7) Distribution of transport infrastructure PPI projects by modes in the 1990-2011 Subsector Project Count % Project Count Total Investment (billion $) % Total Investment Airports 158 10.7% 49,347 13.4% Railroads 118 8.0% 68,537 18.6% Roads 811 54.9% 186,57 50.8% Seaports 388 26.3% 62,805 17.1% Total 1475 100.0% 367,259 100.0% Source: The World Bank Private Participation in Infrastructure Database

TRANSPORTATION PRIVATIZATION (8) The comparison of the traditional public procurement with PPP-type procurement Traditional Procurement Value ($,, ) procurement method Risks assumed by through PPP Value for money the government Cost of capital Cost of services provided Source: (Moriarty, 2006)

TRANSPORTATION PRIVATIZATION (9) A successful implementation of a PPP/PPI project requires: (1) political and economic stability (2) sound legal framework (3) institutional capacity (4) political commitment and support (5) transparent and competitive tender procedures free from corruption (6) an organized and developed domestic private entrepreneurship (including financial institutions and construction companies) (7) public acceptance and support and OIC countries, on average, generally fail to achieve most of these preconditions

TRANSPORTATION&ENVIRONMENT (1) Other Sources 37.5% GHG emissions by sources in 2005 Energy Supply 28.4% Energy Supply Road Transport Air Transport Road Transport 10.7% Maritime Transport Other Transport Industry Other Sources Industry 19.5% Other Transport 1.0% Air Transport 1.7% Maritime Transport 1.2% Source: International Transport Forum, 2010; (EDGAR 4.0 (2009) and IEA)

TRANSPORTATION&ENVIRONMENT (2) Road sector energy consumption per capita and per capita income in 36 OIC countries in 2010 2000 Road sector energy consumption per capita (kg of oil equivalent) 1800 1600 1400 1200 1000 800 600 400 200 0 Qatar Kuwait Saudi Arabia UAE Bahrain Brunei Oman Malaysia Iraq Lebanon Turkey Gabon 0 5000 10000 15000 20000 25000 30000 35000 GDP per capita (constant 2000 US$) Source: The World Bank World Development Indicators

TRANSPORTATION&ENVIRONMENT (3) Passenger Cars and Per Capita Income in COMCEC Countries in 2010 600 Passenger cars (per 1,000 people) 500 400 300 200 100 Suriname Malaysia Turkey Bahrain Brunei Kuwait 0 Maldives 0 5000 10000 15000 20000 25000 30000 35000 GDP per capita (constant 2000 US$) Source: The World Bank World Development Indicators

TRANSPORTATION&ENVIRONMENT (4) Road sector energy consumption per capita and pump price for gasoline in COMCEC countries in 2010 2000 Road sector energy consumption per capita (kg of oil equivalent) 1800 1600 1400 1200 1000 800 600 400 200 0 Qatar Kuwait Saudi Arabia Turkey Benin Cote d'ivoire 0 0.5 1 1.5 2 2.5 3 Pump price for gasoline (US$ per liter) Source: The World Bank World Development Indicators

TRANSPORTATION MOVEMENTS (1) Air passenger carried at the OIC member states in 2012 MENA Sub-Saharan Africa Asia Turkey 63,350,312 Nigeria 4,716,148 Indonesia 77,156,652 United Arab Emirates 59,159,300 Sudan 777,346 Malaysia 39,165,390 Saudi Arabia 25,978,600 Togo 745,782 Pakistan 7,746,829 Qatar 17,187,171 Mozambique 559,609 Kazakhstan 4,206,794 Iran 15,456,490 Senegal 543,988 Uzbekistan 2,593,509 Egypt 8,365,687 Mauritania 325,240 Bangladesh 2,429,981 Morocco 6,943,920 Cameroon 248,027 Afghanistan 1,737,962 Bahrain 5,861,787 Suriname 240,525 Azerbaijan 1,560,084 Oman 4,194,024 Mali 181,743 Brunei Darussalam 1,063,635 Algeria 4,082,595 Uganda 181,309 Tajikistan 847,020 Kuwait 3,583,516 Burkina Faso 125,694 Kyrgyz Republic 494,640 Jordan 3,339,070 Sierra Leone 50,193 Guyana 247,780 Tunisia 3,283,597 Cote d'ivoire 39,485 Turkmenistan 147,500 Lebanon 2,148,669 Gabon 8,298 Yemen 1,299,707 Libya 1,084,174 Albania 980,023 Iraq 784,944

TRANSPORTATION MOVEMENTS (1) Per capita air passengers carried at the OIC member states in 2012 MENA Sub-Saharan Africa Asia Qatar 8,38 Suriname 0,45 Brunei Darussalam 2,58 United Arab Emirates 6,43 Togo 0,11 Malaysia 1,34 Bahrain 4,45 Mauritania 0,09 Indonesia 0,31 Oman 1,27 Senegal 0,04 Guyana 0,31 Kuwait 1,10 Nigeria 0,03 Kazakhstan 0,25 Saudi Arabia 0,92 Mozambique 0,02 Azerbaijan 0,17 Turkey 0,86 Sudan 0,02 Tajikistan 0,11 Jordan 0,53 Mali 0,01 Kyrgyz Republic 0,09 Lebanon 0,49 Cameroon 0,01 Uzbekistan 0,09 Albania 0,31 Sierra Leone 0,01 Afghanistan 0,06 Tunisia 0,30 Burkina Faso 0,01 Pakistan 0,04 Morocco 0,21 Gabon 0,01 Turkmenistan 0,03 Iran 0,20 Uganda 0,00 Bangladesh 0,02 Libya 0,18 Cote d'ivoire 0,00 Algeria 0,11 Egypt 0,10 Yemen 0,05 Iraq 0,02

TRANSPORTATION MOVEMENTS (1) Air passengers carried in the OIC regions in the 1993-2012 period 14000000 12000000 Air transport, passengers carried 10000000 8000000 6000000 4000000 OIC MENA OIC Asia OIC Average OIC MENA OIC Sub-Saharan Africa OIC Asia OIC Average 2000000 OIC Sub-Saharan Africa 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

TRANSPORTATION MOVEMENTS (1) Air freight carried in the OIC regions in the 1993-2012 period 1400 1200 Air Freight Traffic (million ton-km) 1000 800 600 400 OIC-MENA OIC Average OIC-Asia OIC-MENA OIC-Sub-Saharan Africa OIC-Asia OIC Average 200 OIC Sub-Saharan Africa 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year

TRANSPORTATION MOVEMENTS (1) Rail passengers carried in the OIC regions in the 1992-2011 period 14000 Railway passenger traffic (million passenger-km) 12000 10000 8000 6000 4000 2000 OIC Asia OIC MENA OIC Average OIC Sub-Saharan Africa Sub-Saharan Africa Asia MENA OIC Average 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year

TRANSPORTATION MOVEMENTS (1) Rail freight carried in the OIC regions in the 1992-2011 period 60000 Railways, goods transported (million ton-km) 50000 40000 30000 20000 10000 0 OIC Average OIC Asia OIC MENA OIC Sub-Saharan Africa 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year OIC MENA OIC Sub-Saharan Africa OIC Asia OIC Average

TRANSPORTATION MOVEMENTS (1) Container port traffic in the OIC regions in the 2000-2011 period 6,000,000 Container port traffic (TEU: 20 foot equivalent units) 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 OIC MENA OIC Average OIC Asia OIC MENA OIC Sub-Saharan Africa OIC Asia OIC Average OIC Sub-Saharan Africa 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year

POLICY IMPLICATIONS A great diversification among the OIC countries Need to abstain from adopting one size fits all type of policies and strategies Considerable potential for cooperation in the transport industry Success factors: (1) adoption of a sound policy framework (2) right cooperative approach (3) institutional capacity and human resources development (4) accumulation of expertise

THANKS Dr. İsmail Çağrı Özcan cagri.ozcan@kalkinma.gov.tr