Towards An ‘Electronic Trading Platform’ March 18, 2006 Pakistan Electronic Trading (PAKET) Network Mohammed Imani Executive Director Sidat Hyder Morshed Associates (Pvt) Ltd.

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 1 Outline Pakistan Trade Statistics Significance of Trade and Transport Facilitation Single Window – Concept and Benefits PAKET Study

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 2 Pakistan’s Trade Statistics Trend Analysis Source: Federal Bureau of Statistics ‘01‘02‘03‘04‘05‘06‘07‘08‘09‘10 Rupees (Trillions) %

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 3 Pakistan’s Trade Statistics Trade to GDP Analysis ‘01‘02 ‘03 ‘04‘ Trade GDP % of Trade to GDP Rupees (Trillions) % Source: Federal Bureau of Statistics.

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 4 Trade and Transport Facilitation Definition Definition “The simplification and harmonization of international trade procedures” with trade procedures being “the activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade” Source: WTO

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 5 Cost – Benefit Analysis Based on Results of Swedish Study (2002) Based on Results of Swedish Study (2002) Cost of cumbersome procedures 2.5 to 15 percent of trade value Using 2.5 percent this works out to at least 50 billion rupees One Billion A modest improvement of 2 percent can yield cost savings of at least One Billion Rupees per annum

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 6 Single Window Concept Single Window (SW) is defined as a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit- related regulatory requirements. If information is electronic, then individual data elements should only be submitted once. Source: UN/CEFACT

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 7 Benefits Be a single source, integrated and standardized platform for meeting the requirements of all members of community Function as an e-commerce platform for the members of the community. Provide adequate, accurate and timely information Improve the response time of stakeholders to their customers Improve track and trace efficiency Provide shipment/ service visibility Generate alerts about delays or problems Enable moving towards similar procedures across all communities Provide for opportunities for re-engineering, adopting best practices Be easily accessible and secure Be easy to learn, operate and support Single Window

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 8 Commercial Banks Insurance Companies International Trading Partners Traders Pakistan Customs Transporters Freight Stations Weighbridge Operators Stevedores Terminal Operators Shipping Agents Clearing Agents Freight Forwarders Port Authorities State Bank of Pakistan Ministry of Commerce Ministry of Ports and Shipping Other Government Agencies PAKET Potential Stakeholders

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 9 Data Repetition in Trade Documentation Customs Declarations Commercial Invoices Request For Delivery Space Booking DG Declarations Integrated Export Documents Export Permits Manifest Insurance 95% data repetition 70% data repetition 30% data repetition 70% data repetition 40% data repetition 70% data repetition 90% data repetition Source: Presentation on Capacity Building Workshop By Dagang Net Technologies.

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 10 PAKET Feasibility Study Scope of Phase I Study existing requirements, procedures, and processes for the submission of import, export and transit documents and information to government Identify/ascertain existing personnel resources within the relevant stakeholder organizations for project development, implementation, and operation Identify and describe at least three ports with systems for electronic exchange of data

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 11 Phase I Progress Phase I Progress Pakistan Customs Karachi Port Trust Port Qasim Authority Karachi International Container Terminal Qasim International Container Terminal State Bank of Pakistan Trade Associations, etc. PAKET Feasibility Study

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 12 Scope of Phase II Assess overall organizational aspects of implementing PAKET Examine legal issues, privacy legislation and data protection laws associated with Single Window Assess potential impact of PAKET on existing systems, procedures, human resources Consider “best practice” methods in existing electronic platforms in other countries where such systems have already been successfully implemented and recommend possible options for Pakistan PAKET Feasibility Study

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 13 Critical Success Factors Strong political will Sponsorship at highest level Legislative framework Clear strategic plan Close cooperation between government and business community Streamlining and simplification of supply chain processes and procedures Rationalization and harmonization of trade laws and regulations Standardization of data definitions and use of standard protocols for connectivity and data sharing

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 14 Food for Thought Single Window - source for revenue generation and technological excellence Single Window is about economic development NOT technology implementation Single Window is about implementing CHANGE Tough but prudent decisions will have to be made

March 18, 2006 Sidat Hyder Morshed Associates (Pvt) Ltd Management Consultants 15 Thank You