UNCTAD has signed a $4.9 million inter-agency agreement with the UN Office for Project Services (UNOPS) under which it will carry out customs automation and trade facilitation activities in Afghanistan.
Afghanistan has emerged from years of conflict and isolation. It suffers from a severely damaged infrastructure, complex and dissuasive administrative arrangements, restrictive trade policies and illicit trade. One consequence of this is that the Afghan government cannot depend on a predictable and reliable flow of revenue; the country´s $1.7 billion development budget for 2003 was financed entirely by external sources. Officially reported imports in 2002 totalled $851 million, but due to poor reporting and smuggling, a more realistic estimate would be $2.4 billion.
To address these problems, and in response to a request from the government, earlier this year the World Bank approved a $31 million interest-free credit for the development and execution of the Emergency Customs Modernization and Trade Facilitation (ECMTF) Project in Afghanistan, to be executed by UNOPS in collaboration with UNCTAD.
It was UNCTAD´s expertise in the field of customs automation and trade facilitation that led to the creation of a partnership with the government of Afghanistan, the World Bank and UNOPS to support the institutional and policy reforms needed to modernize customs operations and carry out other trade-related reforms in Afghanistan.
UNCTAD will implement two components of this project, aimed at improving the framework for doing business, facilitating foreign trade and creating a climate conducive to investment in Afghanistan. The first is the Automated System for Customs Data (ASYCUDA), a computerized customs management system covering most foreign trade procedures. The system handles manifests and customs declarations, accounting procedures and transit and suspense procedures with a view to improving the efficiency of customs operations; simplifying the trading environment in terms of customs procedures and documentation; and providing governments with the information necessary to formulate and conduct macroeconomic and fiscal policy.
The second component to be implemented by UNCTAD concerns trade facilitation and is aimed at developing the enabling regulatory, physical and commercial environment for fiscal control of trade and transport revenues and at increasing trade competitiveness by reducing logistics costs.
At the 22 October signing ceremony for the Inter-Agency Agreement, chaired by Carlos Fortin, Officer-in-Charge of UNCTAD, participants stressed the importance of this project for Afghanistan, particularly in terms of economic governance and other economic and social benefits.