the challenges facing landlocked developing countries: a case study ...

THE CHALLENGES FACING LANDLOCKED DEVELOPING COUNTRIES:
A CASE STUDY APPROACH
Working Draft
Not for quotation or attribution
Comments welcome
June 23, 2003
BY MICHAEL FAYE, JOHN MCARTHUR
JEFFREY SACHS, AND THOMAS SNOW
Please send comments to:
Michael Faye
E-mail: michael.faye@unmillenniumproject.org
Phone: +1-212-906-3652
Fax: +1-212-906-6733
We thank Malanding Jaiteh at the Center for International Earth Science Information Networks (CIESIN)
at Columbia University for invaluable GIS data analysis and map construction. We also thank Nuño Limao
and Anthony Venables for the use of their freight quote data, Michael Salter for research assistance and
Pierre Yared for his valuable comments. An earlier version of this paper was produced as a background
study for the Human Development Report 2003, with support from UNDP’s Human Development Report
Office. This paper does not necessarily reflect the views of the United Nations Development Programme, its
Executive Board or its Member States. All errors are our own. Please send any suggestions or corrections to
the corresponding author.

EXECUTIVE SUMMARY
The Human Development Report 2002 (HDR) paints a stark picture for most of the
world’s landlocked countries. None of the non-European landlocked countries are
classified as “high human development;” thirteen landlocked countries are classified as
“low human development,” and nine of the world’s twelve least developed countries are
landlocked.
Although geographic location is just one of many factors contributing to economic and
human development, these summary indicators from the HDR highlight the difficult
situation faced by so many landlocked countries. The most obvious challenge landlocked
countries encounter relative to their maritime neighbors is that they lie farther from ports
and thus incur higher transport costs when trading with global markets. Higher trade costs
can reduce the welfare of a country’s citizens and impede prospects for economic growth
by rendering goods expensive to import and locally produced goods uncompetitive for
export. Lack of integration with external markets can also hinder growth by limiting
what Adam Smith first identified as the scope of the market, which enables specialization
in production and the efficient division of labor.
However, distance forms just one component of the costs of being landlocked. Another,
often more important, challenge of landlockedness lies in the dependence on neighbors
for access to international shipping routes. This reliance can take several forms. First, if
a transit neighbor, the country through which one must past to access a sea port, has not
invested in its infrastructure, then not only will the landlocked country’s face barriers to
trade and opportunities for growth, but it will also reap limited benefits to investments in
its own infrastructure. A second form of dependence is political. If a landlocked country
and its transit neighbor are in conflict, either military or diplomatic, the transit neighbor
can easily block borders or adopt other impediments to trade. A third form of dependence
is less direct but often equally costly. When neighbors suffer from civil war, transit
routes can often be damaged or closed, requiring rerouting of major trade corridors or, in
the worst case, stoppages of transit. A fourth category of dependence, administrative
barriers, often imposes the greatest burden. Crossing a border typically means passing
through customs, requiring long waits and additional paperwork. In some instances, it
also means transferring goods between modes of transport, perhaps because rail lines
change gauge width at a border or even stop altogether. In other instances, weak
administrative systems might lend themselves to corruption and bribe-payments as
necessary costs of business.
Given these multiple components of landlockedness, it would be misleading to generalize
about what it means for a country to be landlocked. Instead, one needs to consider
carefully how the problems of distance and dependence are interacting with a country’s
economic structure in order to understand how landlockedness is affecting that country’s
development processes. This report aims to provide such an overview for the world’s 30
least developed landlocked countries, as measured by HDI scores, through short case
studies that evaluate the extent to which each country’s transportation networks are able
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to link to global markets. In doing so, the report describes how landlocked countries’
direct infrastructure challenges and political relations in or with neighboring countries
combine to affect its prospects for external economic integration. Thus case studies are
thus focused in their emphasis on transportation and political relations. They do not aim
to present comprehensive reviews of economic and social development in each country.
Nor do they aim to argue that landlockedness is the only issue affecting the development
prospects of any country. They do, however, intend to consolidate into one text a
standardized assessment of how landlockedness is affecting the countries in
consideration.
In highlighting the various dimensions of landlockedness, several interesting stories
emerge from the case studies. These include:
• The landlocked countries of eastern Africa – Burundi, Rwanda, and Uganda – are
all subject to extremely high transport costs due to low infrastructure in transit
nations and long distances that need to be covered to access ports in Kenya,
Tanzania, or South Africa. Following the Northern Corridor inland from
Mombasa, the further one travels the greater are the costs of distance to port. In
Burundi and Rwanda, these transit costs exacerbate the challenges to economic
development posed by recent civil wars.
• In western Africa, the landlocked countries have the lowest average human
development scores both on an absolute scale and relative to their neighbors. Not
only are the inland countries far from ports, but of the eight transit countries in the
region, six have had at least one civil conflict over the past ten years that was
severe enough to stop transit trade. As a recent example, Mali has suffered
tremendously from the recent conflict in Côte d’Ivoire.
• The consequences of landlockedness vary tremendously across southern Africa.
Botswana, with its well-managed diamond exports that are transported by air, is
less affected by landlockedness. Meanwhile Swaziland is landlocked by a middleincome
country, South Africa, and is thus mostly encircled by a sizeable market
with solid core infrastructure and capital to support inward investment. Malawi,
on the other hand, exports mostly primary commodities and suffered
tremendously from the Mozambican civil war, which cut off Malawi’s main
transit route to the Indian Ocean and caused long-term infrastructural damage.
• In the former Soviet landlocked countries of central Asia, core infrastructure was
generally built around the Soviet production networks that carried resources and
industrial outputs from the outer republics to Russia. Now that the republics have
independence, this transportation infrastructure is anachronistic. Not only does the
old hub and spokes system no longer fit current economic needs, but border
crossings are also sometimes in awkward locations. Driving the main road from
the north to east of Turkmenistan, for instance, requires crossing through
Uzbekistan, a neighbor with whom Turkmenistan has had strained relations
recently.
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• In South America, Bolivia and Paraguay are surrounded by neighbors’ reasonably
good infrastructure but their own infrastructure remains problematic. In Bolivia,
much of this is due to the rugged topography that divides the country and makes
infrastructure costly to build at high altitudes. Quite differently, in Paraguay the
domestic infrastructure challenges have more so been the product of low
investments and weak infrastructure policy.
• In south Asia, Bhutan benefits from its close official links to India, which allow it
to manage its own transit trade through India without interference from Indian
officials. This contrasts with the situation of Nepal, which is similarly dependent
on India for transit trade but has less stable relations. Trade stoppages between
India and Nepal have had significant effects in the latter country; they are
considered to have contributed to the fall of the panchayat government more than
a decade ago.
These are just a few of the broad points to emerge in this study, which aims to serve as a
basic reference document on the nature of trade challenges in each country considered.
The case studies themselves review the transit and cross-border issues in as systematic a
manner as possible. Inevitably, comparisons across countries are imperfect, due mainly to
the lack of available information. In instances where references or descriptions are quite
outdated, readers with updates are encouraged to send them to the contact address listed
on the cover page. All suggestions and comments are welcome.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................... 1
TABLE OF CONTENTS ..................................................................................................... 4
PART 1: INTRODUCTION AND BACKGROUND................................................................. 2
1.1. INTRODUCTION...................................................................................................... 3
1.2. OBSERVATIONS FROM THE CASE STUDIES ............................................................ 7
1.2.1. Dependence Upon Infrastructure of Transit Countries................................. 7
1.2.2. Political Relationship Between Landlocked and Transit Countries ............. 8
1.2.3. Vulnerability to Civil Conflict Within transit Countries ............................ 10
1.2.4. High Administrative Burden Due to Transit............................................... 11
1.3 INDICATORS OF DEVELOPMENT ........................................................................... 14
1.3.1. Comparison of Landlocked Countries and their Maritime Regional
Neighbors.............................................................................................................. 14
1.3.2. Comparisons Amongst Landlocked Countries ........................................... 15
1.3.3. Measures of Relative Landlockedness........................................................ 17
PART 2: COUNTRY CASE STUDIES ............................................................................... 18
AFRICA - SOUTHERN .................................................................................................. 19
Botswana............................................................................................................... 21
Lesotho.................................................................................................................. 23
Malawi .................................................................................................................. 25
Swaziland.............................................................................................................. 28
Zambia .................................................................................................................. 30
Zimbabwe ............................................................................................................. 33
AFRICA – EASTERN.................................................................................................... 35
Uganda .................................................................................................................. 38
Rwanda ................................................................................................................. 41
Ethiopia................................................................................................................. 47
AFRICA - WESTERN.................................................................................................... 50
Burkina Faso ......................................................................................................... 53
Central African Republic ...................................................................................... 56
Chad ...................................................................................................................... 59
Mali....................................................................................................................... 62
Niger ..................................................................................................................... 65
ASIA - CENTRAL ........................................................................................................ 68
Afghanistan........................................................................................................... 72
Kazakhstan............................................................................................................ 75
Kyrgyzstan ............................................................................................................ 78
Tajikistan............................................................................................................... 81
Turkmenistan ........................................................................................................ 84
Uzbekistan............................................................................................................. 87
Moldova ................................................................................................................ 90
Mongolia............................................................................................................... 92
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CAUCASUS ................................................................................................................. 94
Armenia................................................................................................................. 96
Azerbaijan............................................................................................................. 99
ASIA – SOUTH & SOUTH-EAST ................................................................................ 102
Bhutan................................................................................................................. 105
Laos..................................................................................................................... 107
Nepal................................................................................................................... 110
SOUTH AMERICA...................................................................................................... 113
Bolivia................................................................................................................. 115
Paraguay.............................................................................................................. 118
GLOSSARY .................................................................................................................. 120
BIBLIOGRAPHY........................................................................................................... 121
GENERAL ................................................................................................................. 122
AFRICA – SOUTHERN ............................................................................................... 125
AFRICA - CENTRAL AND EASTERN ........................................................................... 132
AFRICA - WESTERN.................................................................................................. 139
ASIA - CENTRAL ...................................................................................................... 144
CAUCASUS ............................................................................................................... 154
ASIA - EASTERN....................................................................................................... 159
SOUTH AMERICA...................................................................................................... 163
APPENDICES................................................................................................................ 165
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PART 1: INTRODUCTION AND BACKGROUND
As by means of water-carriage a more extensive market is opened to every sort of industry than what
land-carriage alone can afford it, so it is upon the sea-coast, and along the banks of navigable rivers,
that industry of every kind naturally begins to subdivide and improve itself, and it is frequently not
till a long time after that those improvements extend themselves to the inland parts of the country.
(Adam Smith, Wealth of Nations I.3.3)
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1.1. INTRODUCTION
The Human Development Report 2002 paints a stark picture for most of the world’s
landlocked countries. None of the non-European landlocked countries are classified as “high
human development;”
1 thirteen landlocked countries are classified as “low human
development;” and nine of the world’s twelve least developed countries are landlocked. The
challenges of landlocked countries are not new. Two hundred and twenty-six years earlier,
Adam Smith (1776) observed that the inland parts of Africa and Asia were the least
economically developed areas of the world.
Why do landlocked countries face such persistent challenges? Smith argued that, due to the
difficulty of trade, geographically remote areas had difficulty realizing gains to specialization
and associated benefits. He based his analysis on the difficulty of land transportation over
great distances – a problem that, despite huge technological advances, still remains today.
High transportation costs typically place landlocked countries at a distinct disadvantage
relative to their coastal neighbors when competing in global markets.
Of course, distance alone does not explain why landlocked countries might be in a different
situation from equally remote, inland regions of large countries. Indeed, some regions of
China, India and Russia lie further from the coast than many landlocked countries like
Azerbaijan and Moldova. While these subnational regions are indeed at a transit cost
disadvantage relative to their maritime counterparts, Smith identified an additional reason for
why borders matter for transit trade:
The commerce besides which any nation can carry on by means of a river… which runs into another
territory before it reaches the sea, can never be very considerable; because it is always in the power
of the nations who possess that other territory to obstruct the communication between the upper
country and the sea.
(Adam Smith, Wealth of Nations I.3.8)
In other words, landlocked countries not only face the challenge of distance from port, but
also the challenges that result from the necessary passage through a sovereign transit
country. 2 While rivers were a more common form of trade transit in Smith’s time, the
principle of dependence on neighbors applies equally to the more modern transport modes of
roads and railways.
In examining the nature of landlocked countries’ dependence on transit nations, one realizes
that obstruction of transit access to markets can take many forms, some of which are much
less intentional than the power games suggested in Smith’s quotation above.
1 The European landlocked countries consist of Austria, Andorra, Belarus, Czech Republic, Holy See, Hungary,
Liechtenstein, Luxembourg, San Marino, Slovakia, Macedonia, Moldova and Switzerland. Moldova is the only
European landlocked country with a HDI of less than 0.76.
2 This report defines a “transit country” as one through which trade from a landlocked country must pass in
order to access international shipping markets.
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First, landlocked countries are dependent on infrastructure levels of their neighboring transit
countries. Neighbors’ infrastructure can be weak for many reasons, ranging from lack of
resources to misgovernance to natural disasters. Regardless of the cause, weak infrastructure
imposes direct costs on trade passing through the country and thus limits the ability of
landlocked country products to compete in global markets. Weak transit infrastructure also
limits the return to investment on landlocked countries internal infrastructure, since market
opportunities are constrained. Second, landlocked countries depend on their political
relations with their transit neighbors. If a landlocked country and its transit neighbor are in
conflict, either military or diplomatic, the transit neighbor can easily block borders or adopt
regulatory impediments to trade. A third form of dependence is less direct but often equally
costly. When neighbors suffer from civil war, transit routes can often be damaged or closed,
requiring rerouting of major trade corridors or, in the worst case, stoppages of transit. Third,
landlocked countries rely on their neighbors’ lack of civil conflict and continuing stability.
When neighbors suffer from civil war, transit routes can often be damaged or closed,
requiring rerouting of major trade corridors or, in the worst case, stoppages of transit. Fourth,
landlocked countries are subject to the administrative burdens imposed in border crossing,
with these often adding the most amount to shipping costs. Crossing a border typically means
passing through customs, requiring long waits and additional paperwork. In some instances,
it also means transferring goods between modes of transport, perhaps because rail lines
change gauge type at a border or even stop altogether. In other instances, weak administrative
systems might lend themselves to corruption and bribe-payments as necessary costs of
business.
Varying combinations of these four factors affect all landlocked countries differently. Some
countries are lucky to have relatively well off neighbors with high levels of infrastructure and
political stability. In such cases, goods can be moved to port quickly and cheaply. This is the
situation for the landlocked countries of western Europe. In contrast, many developing
landlocked countries do not have the luxury of stable and highly developed neighbors. They
are severely affected by varying combinations of weak surrounding infrastructure, political
tensions with their neighbors, civil conflict in transit countries, and high levels of
bureaucracy. In the extreme, a landlocked country can be completely cut-off from trade
routes due to factors entirely beyond its own control.
Given the multiple dimensions of landlockedness, a central theme of this paper is that no
single measure can easily capture the myriad constraints faced by a developing landlocked
country. The capital cities of Kazakhstan and Kyrgyzstan are both more than 3,600km from
the nearest port, posing clear challenges to accessing global markets. However, relative
proximity to a port far from guarantees low costs to landlockedness. Armenia, for instance, is
less than 700km from the nearest port, but has little access due to conflict in or with its transit
neighbors. Meanwhile other countries, like Turkmenistan, face administrative burdens due to
the borders drawn after the main transit routes were constructed. Turkmen vehicles taking the
main road from northern Turkmenistan to eastern Turkmenistan need to pass through Uzbek
borders, with significant associated costs due partially to increased political tensions between
the two countries. Different again is the situation for Bolivia, which is surrounded by
neighbors with good infrastructure, but situated at high elevations where infrastructure
development is costly and still struggling to overcome tense relations with Chile.
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On the positive side, a landlocked location can be less burdensome in some circumstances.
Botswana, for instance, exports mainly diamonds, which are shipped by air and thus not
dependent on accessing neighbors’ infrastructure. Another example is Swaziland, which is
mostly surrounded by upper middle-income South Africa, a country with good infrastructure,
relatively large internal markets, and large amounts of capital for inward investment. These
countries have thus prospered economically despite their landlockedness.
Aim
While numerous planning papers, legal documents, and transport studies have addressed
issues of transit through neighboring countries, near all focus on specific nations or regions,
thus precluding a global cross-country analysis. 3 Other papers focus on distance to port alone
or consider agglomerated economic, social, and financial data for landlocked countries 4
thereby not addressing the specific problems of the political, transit and social environment.
This report seeks to further the discussion by presenting a set of 30 case studies to distill the
unique challenges each one faces. 5
The case studies form the core of this paper, and are presented on a region-by-region basis in
Part II. Highlighting the main lessons of these case studies, the remainder of Part I proceeds
in two sections. The first outlines key messages from the case studies by describing the
regions most and least affected by infrastructural, political, conflict and administrative issues
in each region. The second then presents some key indicators of development across
landlocked countries.
A few caveats should be highlighted regarding the case studies. They do not attempt to
describe the general economic or political situations of the countries studies, unless they are
linked to transit routes. This paper forms a type of reference tool on transit linkages, one to
which the reader can refer back when considering the details of a country’s economic
situation. Thus there is some repetition between case studies, since many of the issues that
apply to an individual country also apply to the rest of its region. To minimize such
repetition, a short overview of regional issues is included at the beginning of each geographic
grouping of countries, along with a regional map.
The structure of the case studies is standardized throughout, but the reader will notice that it
varies slightly across countries and regions. This is for two main reasons. First, the varying
nature of landlockedness in each country requires a different set of emphases in its case
description. Second, comparable data on landlockedness are not available across most
countries. There are no standardized assessments of rail, road or port quality in transit
neighbors, nor of administrative procedures at borders or of transit-related political relations.
This probably speaks to the low level of attention often paid to the nature of landlockedness
around the world. To build a somewhat standardized set of case studies, one has to pull
3 As detailed in Glassner (1995).
4 For example, Limao and Venables , MacKellar and Wörgötter (2000), Radelet and Sachs and Stone (2001)
5 The countries included in the study are those with a Human Development Index less than 0.76.
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together a wide variety of sources, often published across a wide range of dates. This report
aims to provide a helpful step in that direction.
To summarize the key messages for each country, every case study includes an overview box
of key points. This includes an assessment of domestic and neighbors’ infrastructure levels
on a scale of good/fair/poor. The reader should note that these are only shorthand measures
meant to highlight relevant issues. They are not meant to be definitive assessments of
infrastructure.
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1.2. OBSERVATIONS FROM THE CASE
STUDIES
This section outlines observations from the case studies across four dimensions:
infrastructure of transit neighbors; political relations with transit neighbors, vulnerability to
civil conflict in transit neighbors; and administrative burdens encountered when shipping
through transit neighbors. Least affected areas are also indicated under each category, as are
successful strategies for overcoming the respective dimensions of landlockedness.
1.2.1. DEPENDENCE UPON INFRASTRUCTURE OF TRANSIT COUNTRIES
Landlocked countries are completely dependent on their transit neighbors’ transport
infrastructure to transport their goods to port. The process of shipping goods through a transit
country is complex, requiring combinations of roads, rail, trucks, trains, ports, warehouses,
containers and pipelines, and more general infrastructure such as telephones, banks and post.
Given this complexity, it is not surprising that some countries are more affected by transit
infrastructure problems than others.
Worst Affected Areas
The challenges confronted by poor transit neighbor infrastructure are acute in eastern Africa.
Burundi, for example, boasts a relatively good internal road network but is severely
constrained by the surrounding infrastructure of its transit neighbors. The most direct route to
the sea from Burundi is through Tanzania to Dar es Salaam, known as the Central Corridor,
but infrastructure levels on this route are so poor that Burundi’s primary transit route still
follows the more distant path to Mombasa, known as the Northern Corridor. Reflecting the
severity of Burundi’s transport challenges, the Central Corridor is not even a great second
alternative when to the Northern Corridor. When the latter was closed due to political
reasons, an alternative transit route was investigated, and used, to Durban via Mpulungu on
Lake Tanganyika. The fact that this route was even considered, at a total distance of nearly
4,500km with several border crossings and modal changes, highlights the transit challenges
faced by Burundi, already one of the world’s poorest countries.
Similar transit neighbor infrastructure problems exist for western African landlocked
countries. Consider the Central African Republic, which does not have a dependable allweather
route to the sea. Its corridor through Cameroon is often impassable during the rainy
season, owing to the poor condition of Cameroonian roads. Its only other corridor, through
the Democratic Republic of Congo (DRC), travels on the Oubangui River, which is
impassable during the dry season due to low water levels. Furthermore, this corridor is
currently impassable due to the ongoing crisis in the DRC. Therefore, any domestic
infrastructure investments will have limited returns.
Least Affected Areas and Successful Strategies
In contrast to the African landlocked countries, the landlocked countries of south and
southeast Asia and South America are surrounded by relatively high quality transport
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infrastructure. In these cases the landlocked countries have often been unable to take
advantage of the strong surrounding transit systems due to weak domestic networks. Laos,
for example, which has not been able to effectively develop its internal transport network,
borders Thailand’s modern infrastructure facilities. This example is particularly startling as
Thailand’s transport system is characterized by four lane highways, while transport within
Laos is quite limited. The Thai government has also recently extended its rail line to the
Laotian border, beyond which it does not continue the short distance to the Laotian capital,
Vientiane.
In rare cases, the level of transit infrastructure is less relevant. In the case of Botswana, the
economy’s heavy dependence on diamonds, which account for 84% of total export value,
allows the country to bypass transit neighbor infrastructure by utilizing air transport. The
high value/weight and value/volume ratios for diamonds make this possible, since air
transport has a high cost/volume ratio.
Bolivia has had moderate success in bypassing its neighbors’ transit network by trying to
capitalize on its central geographic location to become the South American fiber optics hub.
Modern technological advancements and the development of telecommunications have
expanded opportunities for landlocked countries, where a central location can facilitate the
growth of industries less affected by transport costs.
The low levels of infrastructure in Tanzania, discussed above, are being partially improved
because Tanzania has started to compete for the transit business of Burundi and Rwanda
following the re-opening of the Northern Corridor through Uganda and Kenya. Tanzania has
made material efforts to improve its rail infrastructure and has recently completed a dry dock
at Isaka for the Burundi/Rwanda – Dar es Salaam transit trade. In addition, competition has
encouraged a private company (the Trans Africa Railway Corporation) to build a
transshipment facility at Kidatu (Tanzania) to allow a change in rail gauges. Due to this
connection it is now possible to travel between Cape Town and Kampala by rail in ten days
(InfraAfrica 2001).
1.2.2. POLITICAL RELATIONSHIP BETWEEN LANDLOCKED AND TRANSIT
COUNTRIES
Political relations between landlocked and transit countries are crucial for trade as well. The
developing landlocked countries usually have little influence over their transit neighbors
when negotiating transit routes. While the landlocked country is usually highly dependent
upon its transit neighbor to access other countries and world markets, in most cases the
transit neighbor relies little upon its landlocked neighbor and may see a landlocked country’s
demand for transit rights as an infringement on its own sovereignty.
There is a legal basis for rights of transit as outlined in Article 125(1) of the United Nations
Convention on the Law of the Sea (1982), which states:
Land-locked States shall have the right of access to and from the sea... To this end, land-locked
States shall enjoy freedom of transit through the territory of transit States by all means of transport.
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However in practice, this right of access must be agreed upon with the transit neighbor
(Article 125(2) and (3)):
The terms and modalities for exercising freedom of transit shall be agreed between the land-locked
States and transit States concerned through bilateral, sub regional or regional agreements.
Transit States, in the exercise of their full sovereignty over their territory, shall have the right to take
all measures necessary to ensure that the rights and facilities provided for in this Part for land-locked
States shall in no way infringe their legitimate interests.
Thus a right of access is given to the landlocked country, but such a right is conditioned by
the need for the transit country to grant such a right. Whether a transit country can legally
deny the right of access is discussed in detail in the legal literature (Pechata 1973), but the
case studies of this report show that transit access is in practice determined by the
relationship between the landlocked country and its transit neighbor.
Worst Affected Areas
The landlocked countries of the Caucasus and Central Asia have been most acutely affected
by international disputes and ongoing tensions. After the dissolution of the Soviet Union, the
former republics were divided according to previous administrative boundaries. Such
boundaries have been the source of many disputes. As a result, borders are regularly
defended with landmines and physical blockades, and regional cooperation has failed.
Uzbekistan, for example, suffers from strained relations with four of its five neighbors – the
fifth being Afghanistan. In the Caucasus, fighting between the two landlocked countries,
Armenia and Azerbaijan has not only closed the Armenia-Azerbaijan border but has also led
to the closure of the Armenia-Turkey border. Armenia’s only alternative routes, through
Georgia and Iran, are restricted due to geographic obstacles (mountains) and relatively poor
infrastructure (Tavitan 2001).
Ethiopia, too, has suffered immensely from direct conflict with its transit neighbor, Eritrea.
The conflict has restricted Ethiopia’s access to the Eritrean port of Assab where most
Ethiopian trade (75%) passed through duty-free until 1997. There has now been a major shift
of trading routes used by Ethiopia, away from Assab to the port of Djibouti, which now
handles the large majority of Ethiopian trade. The Djibouti corridor, however, is hampered
by an unreliable and poorly functioning railroad and limited port facilities.
Relations with neighboring countries need not be openly hostile to severely hamper a
landlocked country’s economy. For example, as Nepal’s sole transit neighbor, India
blockaded the border between the two countries in 1990, an action cited as a major cause of
overthrow of the Nepalese panchayat government. 6 Moreover, between 2001 and 2002,
India instituted significant trade restrictions on Nepal during the negotiation of a bilateral
trade agreement. These restrictions were alleged to have been to extract concessions in
negotiations. In the case of Bolivia, the effects of weakened international relations are even
more subtle. For example, long standing tensions with neighboring Chile have recently
delayed the export of newfound gas reserves as the Bolivian people protest the use of Chilean
ports.
6 Transit through China is effectively impossible due to the Himalayan Ranges
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1.2.3. VULNERABILITY TO CIVIL CONFLICT WITHIN TRANSIT COUNTRIES
Even if a country has very good relations with its transit neighbor and core infrastructure in
both countries is sound, it is still vulnerable to civil conflict within the transit country and
consequent border closures. Not only can such conflict result in the closure of vital corridors,
but it can also severely weaken the transit infrastructure for future use.
Worst Affected Areas
The landlocked countries of western Africa have been particularly affected by civil war.
Mali, for example, has been recently recognized for its political stability and commitment to
democracy, but has suffered tremendously from regional conflict and instability. Each of
Mali’s coastal neighbors has been engaged in some form of violent civil conflict in the last
decade, often making transport routes unusable: Togo was devastated by violent political
protests and deep internal conflict in the early 1990s; Algeria was involved in a bloody civil
war for much of the same decade; Ghana suffered from ethnic violence primarily between
1993-1994; Sierra Leone’s ten year civil war has just recently come to a tenuous settlement;
Guinea has been stricken by a series of coups and rebel wars; Liberia has spent most of the
decade in violent civil wars which have threatened to spillover into neighboring countries,
thus jeopardizing regional stability even further; finally, and most importantly for Mali, Cote
d’Ivoire has recently fallen into a devastating political crisis, with severe effects on Mali’s
most important corridor to the sea.
The landlocked countries of southern Africa, most notably Malawi, have also suffered
significantly from the surrounding civil wars in Mozambique, Namibia and Angola. As a
result much of the Southern African Development Community’s (SADC) trade has been
forced along longer north-south corridors, largely relying upon the port of Durban in South
Africa. During the Mozambican civil war, Malawi was forced to reroute its freight, 95% of
which normally passed through the ports of Beira and Nacala, to the much more distant ports
of Durban and Dar es Salaam. It is estimated that the average surface costs to these ports are
more than double those to Nacala and Beira via the traditional rail routes. The average transit
times to Durban (7 days) and Dar es Salaam (6 days) are also nearly double that to Nacala (4
days) and Beira (3 days). The unavoidable rerouting cost Malawi an additional US$50m-80m
(4 - 6% of GDP) per year, with insurance and freight costs doubling from 20% of the import
bill in the early 1980s to 40% by the latter half of the decade (World Bank 1995). While the
corridors to Beira and Nacala have recently been reopened, infrastructure damage from the
war has thus far limited their use.
Civil conflict has also been a significant impediment in central Asia and the Caucasus, where
the dissolution of the Soviet Union has led to several internal conflicts. The Georgian civil
wars of the 1990s have had dramatic effects on the region by severely hampering the vital
corridor link across the Caspian Sea. These wars not only required that trade be rerouted
during the war, but have also destroyed much of the internal infrastructure and significantly
weakened the port of Poti.
Least Affected Areas
There have been few developing landlocked countries which have been unaffected by civil
conflicts in neighboring countries. Bolivia and Paraguay have been the most fortunate in this
- 10 -

egard – their borders have never been closed due to a civil conflict in their neighbors. The
countries of south and south-eastern Asia have also been similarly fortunate.
1.2.4. HIGH ADMINISTRATIVE BURDEN DUE TO TRANSIT
To transit a country, there are a host of direct transit and customs charges 7 , some of which
must be paid upfront and some en route. The direct costs, however, are only a small part of
the picture. International transit also requires burdensome paperwork and bureaucratic
procedures that are costly to deal with and place a high administrative burden on shippers. In
almost all cases, the number of documents needed and the different authorities that must be
consulted are high and could only be negotiated by using a firm experienced in transit
operations such as a clearing and forwarding agent. 8 The need for such services adds
significantly to the overall cost of transit. The cost of bribes and corruption, while considered
to be significant, is difficult to estimate.
In addition to the direct fees and costs of high administration, passing through border points
of foreign countries imposes long delays on transit traffic. It is regularly noted that the time
delays and the variability of time in transit are a greater concern to traders than direct costs,
as they hinder the ability to meet delivery contracts without large inventory stocks. These
delays impose a large burden on trade: In the SADC alone, delays are estimated to impose a
burden of US$48 million annually (InfraAfrica 2001). The cost of delays is estimated to be
between $205 to $440 on a $10,000 cargo consignment from Rwanda or Burundi (Anyango
1997). Other border inconveniences also hamper transport. In many cases, for example,
border fees must be paid in hard currency, where often there are no facilities to convert local
currencies.
Worst Affected Areas
While there is little direct cross-country evidence on the fees and administrative burdens
facing importers and exporters, these costs are most regularly cited in reports on western
Africa. In eastern Africa, they are estimated at as much as 20 percent of the direct freight
costs (Anyango 1997). Where there is a necessity to cross more than one border, such as the
route from Burundi through Rwanda, Uganda and Kenya, it can be necessary to pay these
fees in several countries.
Delays are also a serious concern in Africa, where the average delay at a border crossing is
estimated to be 24-48 hours (Evlo 1995, InfraAfrica 2001). However, there are many areas
within Africa where delays are significantly worse than this average. Customs procedures at
7 Some of the transit and customs charges include transit goods licences, border fees, temporary road licences,
foreign vehicle permits, toll charges, foreign commercial licences, cost of customs verification of containers,
posting of security bonds, involvement with police and escort convoys and cancellation of bonds. The cost of
bribes needed en route, while considered to be significant, is beyond the scope of this report.
8 An example of the forms needed to transit from Bolivia (with one of the more simple transit regimes) are as
follows: Commercial invoice or equivalent; Transport documents (air way bill, bill of lading, consignment note,
original or copy); Report of reception, original; Certificate of previous inspection or custom declaration of value
issued by the original importer; Certificate of insurance, copy; Invoice of port charges, original; Invoice of
transport issued by the transport operator signing the transport manifest, copy; Packing list, original or copy;
Certificate of origin, original; Certificate of previous licence, original; Other documents pertaining to the
claimed regime; and a form listing all the documents outlined above (Castellón 2001).
- 11 -

the Central African Republic - Cameroon border can take as long as two weeks, with goods
often waiting at the border for the requisite information to be sent from Bangui. The full
journey between the port of Doala and Bangui generally takes three weeks to a month. An
average trip between Kampala and Mombasa (a route used by Uganda, Rwanda and Burundi)
is estimated to take 21 days on average, with trips often taking as many as 60 days. The
unreliability of the rail arrivals often make it impossible to book ships ahead of time at the
port of Mombasa, causing further delays. Delays at the port of Abidjan, used by Burkina
Faso, often take up to 10 days and waits at the port of Douala, used by the Central African
Republic and Chad can often extend to 30 days. In addition, the two main transit routes for
Burkina Faso have customs escorts only three times a week so there are often significant
delays in waiting for an escort 9 .
Although such delays have varied causes, many stem from a lack of coordination between
the landlocked and transit countries. In Burkina Faso, for example, there exists a special anticompetitive
provision to protect Burkinabe truck companies, reserving two thirds of transit
freight for carriage by Burkinabe trucks. Thus, there are often goods at maritime ports
waiting for the arrival of vehicles from landlocked countries despite the presence of vehicles
from maritime countries at the port who would be willing to transport the goods inland.
While the absolute levels of fees and administrative burdens are not as high in central Asia as
in Africa, the administrative burdens due to transit are increasing in this region, largely due
to the souring of international relations. During the Soviet era, transport across the
neighboring countries of Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan was largely free
of administrative burdens. A 72-hour visa-free system was introduced in the late 1990s to
allow transit through countries without the need for a visa, but is no longer in effect due to
poor and worsening relations between countries in the region (Dion 2000; Mayhew 2002). 10
Corruption has also imposed significant costs on trade in central Asia and the Caucasus.
Least Affected Areas and Successful Strategies
The most notable exception to such significant administrative burdens is Bhutan. All
Bhutanese transit trade through is handled by Bhutan’s own customs agency. Hence, the
administrative burden for Bhutanese traders is as if the country were not landlocked. This is
largely a result of strong Bhutanese-Indian relations and the minimal amount of Bhutanese
transit trade. Similar bilateral arrangements between other landlocked countries and their
neighbors would substantially reduce transit costs.
Other efforts to reduce administrative charges and delays have taken place at the regional
level in an attempt to simplify regional transit procedures. SADC and the Common Market
for Eastern and Southern Africa (COMESA) for example, have introduced common licenses,
which allow road freight to travel between participating countries without the need for a local
9 Vehicles waiting for a convoy to form wait on the side of the road, not only hindering normal road traffic, but
also contributing to road damage.
10 Kazakhstan and Uzbekistan are involved in a border dispute, Tajikistan has been in a civil war and claims
Uzbekistan is abusing its border closure powers for political purposes, Kazakhstan fears the Islamic threat of
militant Islam and terrorism from Tajikistan. Kyrgyzstan is reacting to the incursion of Tajik rebels (Dion
2000).
- 12 -

license or permit. 11 Another interesting scheme is the COMESA Yellow Card, which
guarantees third party insurance across signatory states, removing the need to purchase
insurance at each border crossing, and thus providing significant cost savings. A Yellow
Card for a truck between Harare and Nairobi, for example, costs about $70 per year. In the
absence of the card, insurance would cost $350 (Mulenga 1998). Similar efforts are being
made in South America through the regional trade institutions to simplify transit procedures.
11 As at July 2001, the license was not yet in use in all COMESA countries because many country’s road
industries had not yet been liberalised.
- 13 -

1.3 INDICATORS OF DEVELOPMENT
1.3.1. COMPARISON OF LANDLOCKED COUNTRIES AND THEIR MARITIME
REGIONAL NEIGHBORS
It has often been suggested that landlocked countries, while facing unique challenges, do not
perform worse than their maritime counterparts. In response, this chapter presents a
comparison of several key indicators for landlocked countries and their maritime neighbors.
While an in-depth statistical analysis is beyond the scope of this report, the figures below
advance the notion that landlocked countries are, in fact, achieving lower average
development levels than their maritime neighbors.
The first part of this section presents a comparison of the Human Development Index (HDI)
for landlocked countries with that of the regional maritime countries. Such a comparison
demonstrates that most landlocked countries lag far behind their maritime regional neighbors.
A significant factor contributing to such poor overall performance is the increased cost and
difficulty of trade faced by landlocked countries. Such challenges are considered in the
second part of this section, which presents both the cost of trade of landlocked countries and
their export levels. The latter measure was included only as a proxy for the difficulties of
trade, and to provide insight into the performance of landlocked countries relative to their
maritime neighbors.
Human Development
The relative state of human development of landlocked countries is presented in Table 1,
where landlocked countries are shaded. A brief examination of the table shows the
distribution of landlocked countries towards the bottom: Not one non-European landlocked
country is defined as having a high level of human development, and of the twelve countries
with the lowest HDI, nine (75%) are landlocked. Overall, the landlocked countries do worse
than their maritime neighbors in each component of the human development index: Average
GDP of landlocked countries is approximately 57% that of their maritime neighbors. Life
expectancy is three years lower.
Due to the high number of African countries at the bottom of Table 1, the above observations
may appear to be merely a result of the majority of landlocked countries being located in
Africa. Table 2 indicates otherwise, presenting the same human development indicators as in
Table 1, with the countries separated by region. With the exception of southern Africa,
landlocked countries have significantly worse levels of development than the maritime
countries of their region. In fact, not one country outside of southern Africa has a higher level
of human development than the average of its regional maritime countries. The countries of
southern Africa exceed their maritime neighbors for a number of reasons, as discussed in the
case studies, but most notably the extended civil wars in Angola and Mozambique.
Several other interesting observations can be made from this table. In particular: in eastern
Africa the life expectancy of the landlocked countries is eight years less than that of the
maritime countries; The average GDP of western Africa landlocked countries is 35% that of
- 14 -

the regional maritime countries; and in east Asia the adult literacy rate of the landlocked
countries is 28% less than that of their maritime neighbors.
Trade
As discussed above, a primary challenge of being landlocked is the increased cost of trade.
Such increased costs are reflected in Table 3, which presents the ratio of transport and
insurance costs to the total value of exports. Overall, this ratio is roughly 9% greater for
landlocked countries than for the maritime countries. For a majority of regions, the average
ratio for landlocked countries is nearly double that of the maritime countries. The notable
exceptions are south and south-east Asia and Swaziland. These countries, however, do not
engage in significant volumes of transoceanic trade, instead exporting overwhelmingly to
their immediate neighbors, India, Thailand or South Africa. This may reflect a diversion of
trade due to the particularly high transit costs, as described in the case studies.
Reflecting the higher trade costs, landlocked countries on average export less than half the
per capita amount of their maritime neighbors. Table 4 presents a regional breakdown of this
measure. Nearly all landlocked countries export less per capita than the average of the
regional maritime countries. The three exceptions, Kazakhstan, Swaziland and Botswana are
all extraordinary cases. Kazakhstan exports primarily oil to its neighbors, Swaziland has a
particularly open trade regime and exports a majority of its trade to South Africa, and
Botswana has thrived on the diamond trade which depends on air transport, thereby
bypassing the challenges of land transport.
1.3.2. COMPARISONS AMONGST LANDLOCKED COUNTRIES
This section explores the variations among landlocked countries. For each indicator, both a
regional and country level analysis are presented.
Human Development
Table A shows the difference between the
average HDI of the regional maritime and
landlocked countries. While the southern
African landlocked countries are doing as
well as their neighbors on average, 12 in all
other regions the landlocked countries are
on average doing worse than their maritime
neighbors. The difference is most
pronounced in western Africa and only
slightly better in Latin America and eastern
Asia.
Table A: Average HDI of Maritime Countries –
Average HDI of Landlocked Countries, by region
HDI
Region
Difference
0.00
Figure 1 provides further detail on variation
among countries by plotting the HDI score of each landlocked country relative to the average
of its regional HDI, allowing some interesting observations:
Best
Worst
Southern
Africa
Central Asia 0.04
Eastern Africa 0.09
Eastern Asia 0.11
Latin America 0.11
Western
Africa
0.12
12 As already mentioned, in southern Africa the maritime countries have suffered dramatically from internal
civil wars and sanctions.
- 15 -

• The southern African landlocked countries bordering South Africa perform
significantly better than those not bordering South Africa.
• The east Asian landlocked countries have remarkably similar levels of human
development, all considerably worse than the regional average.
• In the east African region, the relative levels of HDI parallel the distance from the
coast following major transit route used by these countries. The route passes from
Kenya through Uganda and Rwanda to Burundi.
• Niger is the worst performing landlocked country in absolute terms and relative to its
regional maritime neighbors.
Trade
Closely paralleling the human development
trends above, Table B presents a regional
analysis of exports per capita of landlocked
countries in relation to that of their
maritime neighbors. Once again, the
landlocked countries of western Africa rate
lowest relative to their maritime neighbors,
with only 12% the exports per capita of
their maritime neighbors. Such discrepancy
exists despite the prolonged civil wars in
many of the maritime western African
countries. Also, as in the case of HDI
analysis above, the discrepancy between
landlocked and maritime countries is
smallest in southern Africa.
Table B: Ratio of Exports per capita of landlocked
countries to that of their maritime neighbors, by
region.
Best
Worst
Ratio of
Exports/Capita of
Region
Landlocked to
Maritime
Countries
Southern
0.68
Africa
Central Asia 0.41
Eastern Africa 0.41
Latin America 0.33
Eastern Asia 0.14
Western
0.12
Africa
Closely paralleling the human development trends above, Figure 2 presents the performance
of individual landlocked countries in regard to exports per capita. A comparison of Figure 1
and Figure 2 shows that even fewer landlocked countries outperform the regional average for
exports per capita than was the case for HDI. Several other interesting observations can be
drawn from this figure:
• Uganda exports significantly more than the other eastern African landlocked
countries. As was the case with HDI, the level of exports per capita roughly
corresponds to the distance inland on the major transit route.
• There is little variation in export levels in eastern or western Africa. All are
extremely low.
• Swaziland and Botswana export significantly more than other regional landlocked
countries: Botswana benefits enormously from its diamond trade which utilizes air
transport. Swaziland is a very small country, surrounded by South Africa, with an
extremely open trade regime. As outlined in the case study, this is because it trades
largely with its neighbor, South Africa, benefits from its close location to ports in
both Mozambique and South Africa, and gained from the relocation of several South
African firms during the period of economic sanctions on South Africa.
- 16 -

1.3.3. MEASURES OF RELATIVE LANDLOCKEDNESS
Table 5 presents some summary measures of landlockedness. With the exception of distance
to nearest port, the other variables have been normalized to a 0-1 scale to facilitate
comparison across countries. As in the case studies, the information has been separated into
four headings. The first three reflect direct transportation challenges to trade and the third
reflects political challenges. The aforementioned administrative challenges are included in
these subheadings, where possible, but a systematic assessment of them is prevented by a
lack of consistent information.
As the case studies make evident, attempts to quantify levels of landlockedness are largely
imperfect given the varying nature of the challenges each country faces and the limited
availability of data. Highlighting the difficulty inherent in measuring landlockedness, some
different data sources sometimes provide very different information. Some of the most
glaring discrepancies are between the quantified measures and the qualitative measures
presented in the case studies. For example:
• In the qualitative assessment Rwanda is noted for its relatively good internal road
network, which not only provides adequate linkages to the main regional corridors
but has an extensive system of secondary roads with the average distance from a
household to a trunk road being only 4 km (a relatively low figure in Africa).
However, according to the data presented in Table 5, Rwanda has one of the lowest
proportions of paved roads amongst landlocked countries.
• According to the quantitative data, Malawi appears to face negligible political
challenges, having the lowest transit neighbor length and severity of civil conflict
variable amongst all countries. Malawi, however, has been one of the landlocked
countries to suffer most acutely from surrounding war: the Mozambican civil war
forced Malawi to divert its freight previously shipped to the ports of Mozambique
(95% of its total freight) via more expensive routes to the ports of South Africa and
Tanzania.
Other interesting points emerge from the Table 5. For instance, Kazakhstan is the most
remote landlocked country, being furthest to port, but has the second lowest reported freight
cost of all landlocked countries. It is not clear why this is the case. Compare this with
Malawi, which has the highest freight cost but is only 803 km from port. As discussed in the
case study, much of this is due to the infrastructural damage caused by Mozambique’s civil
was and Malawi’s need to take more costly alternate routes to markets.
- 17 -

PART 2: COUNTRY CASE STUDIES
- 18 -

AFRICA - SOUTHERN
TRANSIT ROUTES OF SOUTHERN AFRICA
On average, the landlocked southern African countries of Botswana, Lesotho, Malawi,
Swaziland, Zambia, and Zimbabwe have a higher level of human development than their
maritime neighbors. This is unique among our sample of landlocked developing countries
and has been largely driven by the persistent civil conflict in Angola and Mozambique. It
also reflects the landlocked countries’ relatively high degree of regional transit integration,
strong domestic infrastructure, relative domestic stability (with clear exceptions, for instance
in Zimbabwe) and large quantity of mineral resources.
- 19 -

Internal transport networks in the southern African landlocked countries generally surpass
those of their war-torn neighbors Angola and Mozambique. Unlike the landlocked countries
of eastern Africa, these southern African countries have several routing options available to
them, including the well-developed South African corridors. Yet, despite these relatively
high domestic infrastructure levels, significant regional transport challenges remain. The
Interconnected Regional Rail Network (IRRN) of the region, for example, does not reach the
Mozambique port of Nacala or any of the Angolan ports. Border delays also continue to be a
significant problem. It is estimated that delays at the major border posts in the SADC region
have cost US$48 million annually and often exceed 24 hours (InfraAfrica 2001). Reflecting
these challenges, the overall cost of freight and insurance for the SADC landlocked counties
(14.8% of export values) is still higher than that for Angola and Mozambique (8.9% of
exports) (IMF BOPS 2001).
While most of southern Africa’s exports are to the EU, serious efforts are underway to
promote intra-regional trade through SADC, SACU and COMESA. Through these
organizations, countries are working to upgrade physical integration and regional
transportation. For example, the SADC has instituted the Southern African Transport and
Communications Commission to integrate transport policy, freedom of transit, and regional
infrastructure. COMESA has created the Yellow Card initiative, which guarantees third party
insurance across signatory states, removing the need to acquire additional insurance coverage
for each country. Other important agreements include: (1) the legally binding SADC Protocol
on Transport, Communications and Meteorology (PTCM) which incorporates the SADC
Regional Trunk Route Network (RTRN); (2) the SADC Protocol on Trade; (3) bilateral
agreements including Corridor Planning Committees; (4) the COMESA Carriers license; (5)
the SADC driver’s license; and (6) the Spatial Development Initiatives (SDI).
Amidst these commitments to promoting integration and harmonization, problems of
implementation and issues of national sovereignty have hindered progress in some instances
(UN 1999). For example, while Zambia and Zimbabwe both agreed to the COMESA freetrade
zone, Zambia has banned on fourteen Zimbabwean products due to Zimbabwean
currency devaluations.
Further to the recent efforts at regional integration, the landlocked countries of southern
Africa, with the exception of Zimbabwe, have benefited from relative domestic stability.
Such internal stability has allowed the region to actively further favorable regional relations.
Civil conflicts in the maritime transit neighbors, Angola and Mozambique, however, have
had led to a direct increase in trade costs and have limited potential transit options. During
Mozambique’s civil war, for example, Malawi was forced to reroute its trade, which is
estimated to have cost Malawi an additional US$50m-80m per year (approximately 4-6% of
GDP) (World Bank 1995). While this vital corridor has been reopened, infrastructural
damage has thus far limited its use.
- 20 -

BOTSWANA
Botswana’s economic dependence on diamond exports (84%
of total exports), whose high value-to-volume ratio allow them
to be transported by air, strong domestic infrastructure and the
well-developed transport corridors of its primary transit
country, South Africa, have limited Botswana’s costs of being
landlocked. Botswana has also benefited from very strong
relations with South Africa. The two countries regularly
cooperate to foster regional security and democracy.
Moreover, Botswana, itself, has been a model of domestic
political stability. Reflecting such successes, Botswana boasts
the highest GDP per capita of the southern African landlocked
countries and has been one of the world’s fastest growing
economies over the past thirty years.
Although Botswana’s geographical position allows it access to
several regional corridors, including those of Namibia and
Mozambique, the great majority of its non-diamond trade
passes through the well-developed South African corridors.
The Namibian and Mozambican corridors have suffered
greatly from the civil wars, and are thus rarely used.
TRANSPORT INFRASTRUCTURE
Road
The South African road network that Botswana depends on for
its international freight is considered to be the best on the
continent. Botswana’s internal road network is also good and
adequate for its trade purposes. The completion of the trans-
Kalahari in 1998 has further improved access to the country’s
remote western districts. In addition to maintaining the
physical infrastructure of its road network, Botswana has
taken part in several bilateral road transit agreements with its
neighbors.
BASIC INFORMATION
HDI Rank: 126
GDP per capita
2000 (PPP$): $7,184
Exports per capita
2000 (current USD): N/A
Distance to port:
905km
Transport cost ratio:
(1999) 0.16
Neighbors:
Namibia, South Africa, Zambia,
Zimbabwe
Primary transit neighbor:
South Africa
Main trading partners (2001):
Imports: SACU (77.6%)
Exports: United Kingdom (86%)
-EIU 2003
Primary Exports (2001):
Diamonds (84%)
Domestic Roads: good
Transit Country Roads: good
Domestic Rails: good
Transit Country Rails: good
Transit Country Ports: good
Neighboring Civil Conflict :
low
Relations w/ Neighbors:
good
Rail
Botswana’s main railway runs from Gaborone on the South Africa border to Plumtree on the
Zimbabwe border. The infrastructure is in excellent condition and provides an important link
for several mining towns to the South African corridors. Transport along this corridor is
further facilitated by the bilateral working agreement between Botswana and Spoornet, South
Africa’s rail service. Botswana has also recently undertaken a survey to assess the potential
of a direct Botswana-Zambia connection.
- 21 -

Ports
Although Botswana’s geographic position allows it access to several regional ports, the
majority of its trade passes through the most efficient South African ones. The Mozambican
and Namibian ports are of ancillary importance and have suffered from civil conflict. These
ports, however, are still considered to be operating adequately.
POLITICAL RELATIONS
Botswana’s relations with its most important regional trading partner, and transit country,
South Africa, are particularly strong. Both countries are liberal democratic states and
cooperate closely on many regional issues, including increased economic integration and
conflict resolution. They have worked closely together on the recent crises in the Democratic
Republic of the Congo and Angola, as well as the instability in Mozambique, Swaziland and
Zimbabwe. The two countries recently formed a joint commission on defense and security,
which first met in November 2000.
While Botswana’s relations with South Africa continue to strengthen, its relations with its
western neighbor, Namibia, have recently been strained. A seven year border dispute over the
island of Kasikili; a dispute over water resource rights on the Okavango River; an influx of
Namibian refugees to Botswana resulting from the uprising in the Caprivi Strip; and
Botswana’s construction of a fence along the Namibian border have all contributed to the
rising tensions. Within the last year, however, both countries have made efforts to improve
their relations and have launched several bilateral initiatives.
Relations with Zimbabwe, which have traditionally been cool but proper, have recently
suffered from that country’s continuing political instability. Botswana President Festus
Mogae has publicly criticized Zimbabwe’s political and economic policies. The presence of
Zimbabwean refugees in Botswana has also been noted as a contributor to deteriorating
relations.
- 22 -

LESOTHO
Surrounded by South Africa, Lesotho is completely dependent
on its only neighbor’s well-developed transport system for its
external trade, which is primarily directed towards North
America. Such unilateral dependence negates many of the
advantages associated with Lesotho’s proximity to the port of
Durban (575km) and the good condition of its surrounding
infrastructure. Lesotho’s transport challenges are further
complicated by the highly mountainous, rugged terrain of the
eastern highlands, which prevent the direct eastward transport
of freight from the capital, Maseru, to the port of Durban.
Reflecting the severe effects of Lesotho’s dependence and its
geographical constraints, Limao and Venables (1999) reported
that the cost of shipping a 40’ container from Baltimore
(USA) via Durban to Maseru (Lesotho) is US$10,000,
compared to only US$5,000 to Lusaka (Zambia) which is
1,300km and several border crossings further.
BASIC INFORMATION
HDI Rank: 132
GDP per capita
2000 (PPP$): $2,031
Exports per capita
2000 (current USD): $126
Distance to port:
575km
Transport cost ratio
(2000): 0.12
Neighbors:
South Africa
Primary transit countries:
South Africa
TRANSPORTATION INFRASTRUCTURE
Road
Lesotho’s main roads, many of which provide links to the
well-developed South African corridor roads, are generally
good. A 1995 survey reported that 84% of Lesotho’s paved
roads are in “good” condition, while only 5% are considered
“poor.” Lesotho, however, continues to face the challenge of
providing all-weather access to the highlands. To deal with
this problem, the government initiated a US$40 million Road
Rehabilitation and Maintenance Project in 1996. The
construction of the Lesotho Highlands Water Development
Project has led to the further improvement of many such
interior roads.
Main trading partners (2001):
Imports: SACU (83%)
Exports: North America (63%)
-EIU
Primary Exports:
Textiles, Footware
Domestic Roads: good
Transit Country Roads: good
Domestic Rails: n/a
Transit Country Rails: good
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors:
good
Rail
The only rail in Lesotho is a 2.6 km segment of the South African railway system that
extends from the South African border to Maseru. The railway is both owned and operated
by South Africa. The South African rail system to which Lesotho connects is of very good
quality.
Ports
All of Lesotho’s import and export traffic is routed through South African ports, in particular
Durban. These ports are considered to be the most efficient in the region.
- 23 -

POLITICAL RELATIONS
Lesotho’s international affairs are strongly dominated by the bilateral relationship with its
only neighbor and major trade partner, South Africa. From the time of independence (1966)
until Lesotho’s military coup in 1986 these relations remained largely strained. Since then,
however, relations have become increasingly close with diplomatic ties being established in
1992. In fact, after a disputed election in 1998, South Africa intervened to protect the
precariously placed government and maintain stability. Following this intervention, the two
countries agreed to a security pact that allows the government of Lesotho to invoke the
assistance of South Africa to maintain domestic stability. The two countries have also
demonstrated close cooperation in the Lesotho Highlands Water Development Project, which
promises to harness the water resources of Lesotho for the mutual benefit of both countries.
As further evidence of the improving relations, President Thabo Mbeki recently visited
Lesotho and established a bilateral commission to support its economic development.
Despite these overall improving relations, some sources of tension remain between the two
countries, including South Africa’s decision to offer permanent residence to qualifying
Basotho migrant workers and the withdrawal of multiple-entry visas for Basotho traveling to
and from South Africa. Cross-border raids also continue to be a problem but both
governments have agreed to address the issue.
- 24 -

MALAWI
One of the world’s poorest countries, Malawi has suffered
dramatically from being landlocked. For nearly two decades,
its two cheapest and shortest corridors to the sea, through
Mozambique to the ports of Beira and Nacala, remained
closed due to Mozambique’s civil war (1975-1992). These
routes had formerly accounted for approximately 95% of
Malawi’s total freight. During the civil war, Malawi was
required to reroute its transit freight via the significantly
longer and costlier Durban and Dar es Salaam corridors. The
average surface costs of these corridors are more than double
those through Mozambique. Moreover, the average transit
times to Durban (7 days) and Dar es Salaam (6 days) are
nearly double that to Nacala (4 days) and Beira (3 days). It is
estimated that the rerouting cost Malawi an additional
US$50m-80m per year (approximately 4-6% of GDP) (World
Bank 1995), with insurance and freight costs doubling from
20% of the import bill in the early 1980s to 40% by the latter
half of the decade. While the corridors to Beira and Nacala
have been recently reopened, infrastructure damage from the
war has thus far limited their use. It is hoped that as much as
75% of Malawi’s trade will ultimately return to the Nacala
corridor (EIU 2002).
In addition to the profound external political challenges faced
by Malawi, poor surrounding infrastructure has further
exacerbated its landlocked position. Zambia, Tanzania, and
Mozambique all have extremely poor infrastructure,
considered to be worse than Malawi’s.
BASIC INFORMATION
HDI Rank: 163
GDP per capita
2000 (PPP$): $615
Exports per capita
2000 (current USD): $43
Distance to port:
803km
Transport cost ratio
(1994): 0.55
Neighbors:
Mozambique, Tanzania,
Zambia, Zimbabwe
Primary transit neighbor:
Mozambique
Main trading partners:
Imports: South Africa (48%),
Zambia (14%)
Exports: United States (18%),
Germany (13%)
Primary Exports (2000):
Tobacco, tea and sugar (90%)
Domestic Roads: fair
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
fair
poor
TRANSPORTATION INFRASTRUCTURE
Road
Malawi is surrounded by extremely poor transit road
infrastructure. Zambia’s roads are noted for having more
Transit Country Ports:
craters than tarmac, while a truck driver reports that one of the main transit roads through
Mozambique “was known as the Tete hell run - only the most mercenary of truck drivers
dared to attempt the trip and many trucks were shot up” (TrekShare 2000).
While Malawi’s domestic road system suffers from one of the highest accident rates in the
world 13 and poorly maintained rural feeder roads, it boasts an extensive highway system
linking major towns and border crossings. These primary roads are considered to be of
fair
Neighboring Civil Conflict:
high
Relations w/ Neighbors:
good
13 The lack of road safety is estimated to cost the economy 2-3% of GDP (World Bank 1995).
- 25 -

elatively better quality than most of Malawi’s neighbors’, with the exception of Zimbabwe.
Malawi’s roads have recently suffered, however, from the increased stress placed on them
due to the increase in traffic associated with the closure of the Mozambican railways.
The Malawian government has made recent efforts to improve road safety and road
maintenance including a World Bank funded US$30 million Road Maintenance and
Rehabilitation Project in 1999. Malawi also has bilateral road transport agreements with
Mozambique, Tanzania, Zambia and Zimbabwe which help facilitate international road
traffic.
Rail
Prior to the war in Mozambique, Malawi depended heavily on the rail corridor to the port of
Nacala for its transit freight. The war, however, forced the closure of this corridor for nearly
two decades and has left the railway in a state of disrepair. Recent projects have been
undertaken by the World Food Programme and the Mozambican government to improve this
vital corridor. 14 Moreover, the Central East African Railway Company (CEARC), which
operates Malawi’s rail system, announced in 2000 an additional investment of US$26m over
fifteen years. This will include a US$4.8m investment targeted at improving the company’s
rolling stock. Improvements are already being seen, as the volume of external trade traffic
increased by 63% over 2001. The Malawi government estimates that the refurbished rail
corridor could save more than $700m a year in transport costs.
Ports
During Mozambique’s civil war, most of Malawi’s freight was redirected to the ports of
South Africa and Tanzania, 15 with approximately 80% of Malawi’s total freight traffic
passing through the South African ports. The recent reopening of the Mozambican corridors
has reduced reliance on these ports.
Malawi has two domestic ports on Lake Malawi, at Chipoka and Chilumba (Simuyemba),
which are used to transport goods north to the Tanzanian corridor and ultimately Dar es
Salaam. The ports suffer from a lack of storage facilities, outdated infrastructure, and a lack
of coordination with the road and rail systems. Given the diminishing importance of the
Northern corridor, these ports are not likely to play a major role in Malawi’s future freight
transport.
POLITICAL RELATIONS
Although Malawi boasts internal stability and strong relations with most of its neighbors and
most important trading partner, South Africa, it has suffered extensively from the
Mozambican civil war. As mentioned, the war not only resulted in the closure of Malawi’s
most important transit corridors for nearly two decades, but has also left its infrastructure in a
state of disrepair. Moreover, the war strained bilateral relations between the two countries,
as former Malawi President Dr. Hastings Kamuzu Banda was considered to have aided the
Mozambican rebels. Following his death in 1994, relations have shown considerable
14 With a US$100 million loan from the World Bank
15 The war in Mozambique led the SADC to develop the northern corridor route to the port of Dar es Salaam.
The project costs US$863m and uses Malawi’s roads and lake transport to link to the Tanzanian rail system.
- 26 -

improvement. This has been reflected by the recent cooperation to improve the Nacala
corridor.
Malawi’s cordial relations with its other neighbors have been fostered by its general policy of
neutrality during regional conflicts. Malawi has also displayed a commitment to maintaining
border security. After a conflict flared on the Malawi-Tanzania border in early 2001, for
example, Malawi sent security personnel to meet with Tanzanian representatives and agreed
to send more border patrols to prevent further violence.
While Malawi’s relations with its most important trading partner, South Africa, have also
remained strong, bilateral tariffs between these countries remain notably high. Malawi faces
the highest average tariff rate (21%) amongst SADC countries from South Africa and
imposes a higher average tariff against South African goods than any other southern African
country.
- 27 -

SWAZILAND
Despite being landlocked, Swaziland’s location allows it
convenient and direct access to port. Unlike Lesotho,
Swaziland is not completely dependent on South Africa for
transit freight; it can either use the Mozambican corridor to
Maputo (224km) or South Africa’s corridors to Durban (562
km) and Richards Bay (480 km). All of these corridors
require only one border crossing. Swaziland’s propitious
location is complemented by its extensive, diverse and wellmaintained
transport infrastructure. Moreover, the local
focus of Swaziland’s trade, with 93% of total imports
coming from South Africa, and 60% of total exports going
to its neighbor, limit the effects of being landlocked on trade
cost. Reflecting Swaziland’s marginal degree of
landlockedness, the country boasts the highest level of
human development, most FDI received and lowest
transport cost to export value ratio amongst the southern
African landlocked countries.
TRANSPORTATION INFRASTRUCTURE
Road
Swaziland depends on the road corridors of both South
Africa and Mozambique for its trade. While South Africa’s
roads are of extremely good quality, Mozambique’s have
suffered from its recent civil war. But unlike the problems
faced by Malawian transit trade, the effects of
Mozambique’s civil war on Swaziland’s trade have been
limited due its close proximity to the port of Maputo.
BASIC INFORMATION
HDI Rank: 125
GDP per capita
2000 (PPP$): $4,492
Exports per capita
2000 (current USD): $928
Distance to port:
193km
Transport cost ratio:
(2000) 0.02
Neighbors:
Mozambique, South Africa
Primary transit countries:
Mozambique, South Africa
Main trading partners (2001):
Imports: South Africa (93%)
Exports: South Africa (60%)
-EIU 2002
Primary Exports (2000):
Miscellaneous Edibles (28%)
Consumable Finished Goods (15%)
Sugar (13%)
Domestic Roads: good
Transit Country Roads: good
Domestic Rails:
Transit Country Rails:
good
good
Swaziland’s domestic roads are in very good condition and
are considered to be operating relatively efficiently. The
main road from Mbabane to Manzini has recently been
upgraded to a double carriage highway. Swaziland has also
Transit Country Ports:
successfully committed itself to providing transport links for rural communities to access the
main network.
Rail
Swaziland Railways (SR) is one of only a few profitable railways in Africa and is considered
to run efficiently. With 300 km of internal rails, SR provides essential links to the rail
systems of South Africa and Mozambique, which ultimately connect to the ports of Durban,
Richards Bay and Maputo. The rail system has benefited from the recent US$67 million
rehabilitation and expansion of the line to Mozambique. In 1995, Swaziland Railways
signed an agreement with the Mozambican Railway Authorities that provides for the
good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: good
- 28 -

cooperation of the two countries’ rail systems. The agreement promises to reduce railroad
transit costs.
Port
Swaziland has traditionally been dependent primarily on the port of Maputo in Mozambique.
During Mozambique’s civil war, much of this trade was diverted to the port of Durban in
South Africa. Both of these ports are among the largest and most efficient ports in the region.
Swaziland’s transport system is further aided by its dry port at Matsapha, which saves both
time and money for importers and exporters. The port is in the process of being upgraded
with a grant from the Taiwanese government.
POLITICAL RELATIONS
Under its Tikundla system of dual monarchy, Swaziland has maintained an atmosphere of
relative domestic stability. Its highly homogenous ethnic composition has helped maintain
such stability and has precluded ethnic conflicts. The country’s monarchy, however, has
recently come under increasing criticism, both domestic and international, and is being
increasingly pressured to democratize.
Relations with its most important trading partner, South Africa, are subject to some strains.
While the governing African National Congress in South Africa has refused to openly assist
progressive groups in Swaziland, it is said to maintain pressure in other ways. Moreover, the
South African Trade Unions and exiled Swazi pro-democracy supporters in South Africa
continue to openly back progressive movements in Swaziland and have supported border
blockades during national strikes. The SADC meanwhile declines to openly criticize
Swaziland’s current regime.
Relations between Swaziland and Mozambique are considered to be constructive, as reflected
by the cooperation over new initiatives such as the trilateral Spatial Development Initiative.
This initiative focuses on the joint development of regional transport infrastructure.
- 29 -

ZAMBIA
While Zambia shares its border with eight different countries
and could potentially have numerous outlets to the sea,
surrounding conflicts (particularly those in the DRC and
Angola) have limited the available options. Unable to
transport westward through Angola because of the ongoing
civil war, Zambia must rely primarily on the South African (to
Durban), Tanzanian (to Dar es Salaam) and Mozambican (to
Beira) corridors. Each of these corridors presents significant
transit difficulties: the Mozambican corridor was closed for
most of the civil war and still suffers from severe
infrastructure damage; the Tanzanian corridor has particularly
poor infrastructure; and the South African corridor is by far
the longest and requires several border crossings. Further
exacerbating its transport difficulties, Zambia is noted for
having some of the worst domestic transport infrastructure in
the region. The product of these challenges is Zambia’s high
transport costs, which are estimated to account for 60-70% of
the total cost of production for many goods (EIU 2002).
Recognizing the seriousness of this issue, the Zambian
government has recently demonstrated increased commitment
to improving transport efficiency.
TRANSPORT INFRASTRUCTURE
Road
Zambia has become increasingly dependent on road corridors
for its freight transport. The neighboring road corridors on
which it depends vary greatly in quality: the southern corridor
to South Africa is of considerably better quality than the other
corridors through Mozambique and Tanzania.
BASIC INFORMATION
HDI Rank: 153
GDP per capita
2000 (PPP$): $780
Exports per capita
2000 (current USD): $88
Distance to port:
1,975km
Transport cost ratio
(1995): 0.17
Neighbors:
Angola, Botswana, Democratic
Republic of Congo, Malawi,
Mozambique, Namibia,
Tanzania, Zimbabwe
Primary transit countries:
Mozambique, Tanzania,
Zimbabwe, South Africa
Main trading partners (2001):
Imports: South Africa (68%)
China (4%)
Exports: Malawi (10%)
Thailand (9%)
Primary Exports (2001):
Metals (68%)
Domestic Roads: poor
Transit Country Roads: fair
Domestic Rails: poor
Transit Country Rails: fair
The challenges presented by these international corridors are
severely aggravated by Zambia’s extremely poor domestic
roads – both trunk roads and the rural feeder network. In 1984,
30% of Zambia’s paved roads were considered to be in poor
Transit Country Ports: good
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: good
condition; by 1995 this proportion had risen to over 50%. The main roads are littered with
craterous potholes often forcing vehicles to drive on the gravel shoulders for several hundred
meters at a time. An estimated 90% of rural feeder roads were classified as poor according to
a Zambian Roads Department study, further complicating the challenges faced by Zambia’s
widely dispersed rural population. Zambia also has one of the highest road fatality rates
amongst developing countries.
- 30 -

To address these problems the Zambian government has undertaken a US $70 million Road
Sector Investment Project (1997-2007) with assistance from the World Bank, aimed at
increasing the proportion of roads in “good condition” to at least 50%. The Project will also
address the issue of road safety. In addition, the Zambian government has negotiated bilateral
road transport agreements with Botswana, Zimbabwe, Malawi and Tanzania.
Rail
Zambia’s two railways TAZARA (jointly owned with Tanzania) and Zambia Railways are
both operating at under half capacity and are plagued by old tracks, inadequate rolling stock,
and poor maintenance. The Zambian government has recently undertaken a US$27 million
Railways Restructuring Project “to enable Zambia Railways, through restructuring and
privatization, to substantially increase its operating efficiency, reduce its cost of operations,
and configure its freight services and tariffs to meet customers’ requirements and
expectations, and consequently, to increase its share of the local, international, and transit
freight traffic” (World Bank 1997). Zambia Railways has bilateral working agreements with
the national railways of Zimbabwe, South Africa (Spoornet), and Tanzania.
Ports/Waterways
Zambia’s primary transit ports are those of South Africa (mainly Durban), Mozambique
(mainly Beira) and Tanzanian (Dar es Salaam). While Beira is closest, Durban is the best
equipped and also directly accessible by rail. Both the ports of Beira and Durban have been
expanding their market share in Zambia at the expense of the port of Dar es Salaam.
Inland water transport holds potential for freight transport to DRC, Burundi and Tanzania via
Lake Tanganyika but has been thus far underdeveloped and poorly maintained. The port of
Mpulungu on the lake is considered to be in poor condition and is not linked with the railway
network thereby limiting demand (World Bank 1997; EIU 2002).
POLITICAL RELATIONS
Zambia is considered to be more politically stable than many of its neighbors. Despite such
stability, Zambia has recently had to deal with conflicts in neighboring Angola and DRC, and
rising tensions in Zimbabwe. The Angola conflict, which recently ended in April 2002, not
only weakened the country’s infrastructure and rendered its corridors impassable, but also
soured relations with Zambia. The Zambian government was accused of funding rebels and
allowing Angolan rebel groups to take refuge on Zambian soil. Moreover, Zambia refused
Angola the right to pursue the rebels on Zambian territory. The escalating tensions led to
brief border skirmishes in 2000. Further contributing to the escalating tensions, Angolan
soldiers embarked on a series of cross-border raids in which they plundered Zambian border
villages in 2001. The end of the war and the establishment of a tripartite security mechanism
with Namibia, however, promise to improve relations, although border regions still remain
volatile.
Zambia has also suffered from the civil war in the DRC: Congolese rebels have crossed into
Western Zambia looting Zambian villages, and the influx of Congolese refugees is placing
additional strain on an already weak Zambian economy. The Zambian government, however,
has refused to become militarily involved in the crisis and remains neutral.
- 31 -

Relations with South Africa have been strained over sour relations between the countries’
previous presidents, as well as the large trade imbalance- 68% of Zambia’s imports originate
in South Africa. With the elections of President Patrick Levy Mwanawasa of Zambia and
President Thabo Mbeki of South Africa, however, relations have been showing signs of
improvement. The 2001 ratification of a trade protocol between SADC and SACU will also
guarantee Zambian producers access to South African markets and should help further
improve relations.
- 32 -

ZIMBABWE
For nearly fifty years, Zimbabwe’s trade and transit patterns
have largely been a product of the local and surrounding
political, rather than infrastructural, conditions. When
Zimbabwe, then known as Southern Rhodesia, declared
independence in 1965, the resultant international sanctions
caused it to shift much of its trade towards South Africa.
Around the same time it closed its border to Zambia. In
1975, when Mozambique received independence, Zimbabwe
lost access to the ports of Beira and Maputo (Mozambique)
and was forced to divert most of its trade to the South African
corridors. When the new government was installed in 1980,
renaming Southern Rhodesia as Zimbabwe, the Mozambican
corridors were reopened but remained virtually impassable
because of the ongoing Mozambican civil war. More recently
during the apartheid era, the South African government
regularly threatened to close its borders to Zimbabwe. Today,
Zimbabwe faces increasing political and economic isolation
resulting from the controversial rule of Rubert Mugabe.
While Zimbabwe continues to face great political challenges,
it boasts one of the best domestic transport systems in the
region. However, its most important corridor, to Beira, has
suffered considerably from the recent Mozambican civil war.
Nonetheless, the Mozambican ports remain of primary
importance, having accounting for 82% of Zimbabwe’s total
trade as of 1996. The South African ports of Durban, Port
Elizabeth, and Capetown accounted for the remaining 18%
(Pedersen 2002).
TRANSPORT INFRASTRUCTURE
BASIC INFORMATION
HDI Rank: 128
GDP per capita
2000 (PPP$): $2,635
Exports per capita
2000 (current USD): $178
Distance to port:
464km
Transport cost ratio
(1994): 0.15
Neighbors:
Botswana, Mozambique, South
Africa, Zambia
Primary transit countries:
Mozambique, South Africa
Main trading partners (2001):
Imports: South Africa (46%)
DRC (6%)
Exports: United Kingdom (7%)
Germany (7%)
Primary Exports (2000):
Tobacco (26%)
Gold (13%)
Domestic Roads: good
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
Transit Country Ports:
good
fair
fair
Road
The primary road corridors that Zimbabwe depends on,
through South Africa and Mozambique, have historically been
of good quality, although the recent civil war in Mozambique
caused significant destruction of the country’s main roads. Zimbabwe’s own domestic trunk
road network is in good condition and provides adequate access to the region’s primary
corridors. Most of these main roads were inherited from Southern Rhodesia’s government
which actively promoted road development. The rural road network, however, was
considerably less developed at the time of independence, but has benefited from significant
improvements in the latter half of the 1990s.
Rail
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors:
fair
- 33 -

Zimbabwe’s extensive rail network, which serves both domestic and international transport,
has historically been considered one of the most efficient in Sub-Saharan Africa and has
typically been the predominant mode of transit. The 1985 national transport study noted that
“NRZ’s [National Railways of Zimbabwe] tracks are generally in excellent or good
conditions.” (SWECO 1985). As late as 1990 the railways accounted for all of Zimbabwe’s
trade through Mozambique, and 80% through the South African ports (Gleave 1992).
Recently, however, the railways have lost a significant share of their transit traffic to the
roads systems, owing largely to a decrease in relative efficiency and increases in cost.
Ports
An increasing share of Zimbabwean trade is being shipped through the South African ports
(most notably Durban) despite lower simple transport costs to the Mozambican ports of Beira
and Maputo. The shift is largely seen as a product of the improved efficiency of the South
African ports associated with economies of scale (i.e. container shipping). The South African
corridors are also considered more reliable and provide more regular services than the
Mozambican corridors. Overall, the ports serving Zimbabwe are operating relatively
efficiently.
POLITICAL RELATIONS
While Zimbabwe has not been subject to the violent border clashes common in western and
eastern Africa, it has recently suffered from increased regional tensions and political isolation
in the SADC. The deteriorating relations can be largely attributed to the regime of President
Robert Mugabe, who has received international criticism not only from the SADC and the
Commonwealth but also from the EU and US governments. The Commonwealth has even
suspended Zimbabwe. One of the primary sources of increased tension is Zimbabwe’s
ongoing military involvement in the war in the DRC, despite pleas from its neighbors to
withdraw. Moreover, personal disagreements between Mr. Mugabe and South African
president Thabo Mbeki have weakened Zimbabwe’s relations with South Africa. These
relations have been further strained over several trade disputes. (EIU 2002).
Zimbabwe’s relationship with Botswana has been strained over the recently constructed
(1999) Bulawayo-Beitbridge railway link that allows Zimbabwe to transport freight more
directly and efficiently to South African ports and bypass Botswana railways. In contrast,
Botswanan freight destined for the northern tier of Southern African countries still requires
passage on Zimbabwean railways. Zimbabwe has further aggravated the tension caused by
this disparity by requiring that any freight passing through Zimbabwe from third countries
such as Zambia use this Bulawayo to Beitbridge route, thereby limiting transit freight on
Botswanan rails.
- 34 -

AFRICA – EASTERN
TRANSIT ROUTES OF UGANDA, RWANDA AND BURUNDI
- 35 -

TRANSIT ROUTES OF ETHIOPIA
The landlocked countries of eastern Africa, Uganda, Rwanda, and Burundi are intimately
linked by the region’s “umbilical cord,” the Northern transit corridor from Kenya through
Uganda and Rwanda to Burundi that serves as a primary transit route for all three countries.
The Central corridor to the port of Dar es Salaam provides an alternate route to the Indian
Ocean. The exclusive dependence on these corridors, and primarily the Northern, by Uganda,
Rwanda, and Burundi makes this region particularly interesting in the study of landlocked
countries. Although a central message of this report is that distance to port is just one
component of landlockedness, in this region distance inland is a useful summary measure
since infrastructural and political challenges faced en route are cumulative in that those faced
by Uganda or Rwanda will most likely be faced by Burundi as well.
The recent civil wars and regional tensions have highlighted the interconnectedness of these
countries and have severely weakened their transit systems. Rwanda’s recent brutal civil war,
for example, rendered the country’s infrastructure virtually impassable not only for Rwandan
- 36 -

transit, but Burundian transit as well. Tensions between Uganda and Rwanda over the
ongoing conflict in the Democratic Republic of the Congo, and the corresponding increased
vulnerability of the border, have not only hindered Ugandan and Rwandan trade, but also
Burundian trade.
Yet, civil conflict and cross-border tensions are only a part of the problem. The east African
landlocked countries face the additional challenge of being surrounded by worse transport
infrastructure than their domestic systems. Unlike other focus regions such as southern
Africa, the east African maritime transit countries (Kenya and Tanzania) are plagued by poor
transport infrastructure, not owing to war, but rather inadequate investment and neglect.
Traversing such poor infrastructure is complicated by regional geographic conditions, which
include a severe rainy season often responsible for flooding the main corridors.
The absence of functioning rail corridors has also further exacerbated the challenges facing
these landlocked countries. Burundi and Rwanda have no rail systems, and Uganda has let its
railways fall into such a serious state of disrepair that an average trip from Kampala to
Mombasa is now estimated to take 21 days. The absence of a reliable rail corridor not only
limits the competition faced by road sector, but also places an increased burden on its
physical structure and leads to quicker deterioration. A reliable rail corridor extending from
Mombasa through Uganda and Rwanda to Burundi would significantly reduce the cost of
trade for these landlocked countries.
In terms of regional market integration, despite recent efforts eastern Africa has thus far
failed to make much progress. While COMESA and the East African Community (EAC)
strive to facilitate intraregional commerce, progress has been slow in implementation. In fact,
over the past thirty years the share of intraregional trade in total exports has fallen from 9%
in 1970 to 7.7% is 1998 amongst COMESA countries. Burundi and Rwanda have not yet
even been allowed to join the EAC, and despite Uganda’s national liberalization, it has
chosen not to join the COMESA free-trade area due to concerns about the effects of a zero
tariff on its manufacturing industries and government revenue. (EIU 2002)
- 37 -

UGANDA
Uganda’s location allows it two possible corridors to the sea:
the Northern Corridor to the port of Mombasa, and the Central
Corridor to Dar es Salaam. The Northern Corridor is in fair to
poor condition due to lack of maintenance, while the Central
Corridor is in poorer condition (InfraAfrica 2001).
Since the early 19 th century, when the Kenya-Uganda railway
was first constructed, the Northern Corridor has played the
predominant role in Uganda’s trade flow. While it continues
to do so, the rapid deterioration of the railroad after the East
African Railway Corporation dissolved into three separate
companies in 1977 has shifted the primary mode of transport
from rail to road.
Although the Central Corridor continues to be of ancillary
importance due to particularly weak infrastructure – including
a dilapidated rail system, poorly maintained road network, and
relatively inefficient port system – recent improvements in
Tanzania’s infrastructure have increased the corridor’s
importance for Uganda. In addition to their direct benefits,
such improvements have helped foster some competition
between Kenya and Tanzania for the transit traffic of the east
African landlocked countries.
TRANSPORT INFRASTRUCTURE
Road
Accounting for over 90% of the country’s passenger and
freight traffic, Uganda’s roads play a predominant role in its
transport system; the primary transit route, the Northern
Corridor, depends almost exclusively on the road from
Kampala to Mombasa. The quality of this primary road
corridor varies significantly by section, with Uganda’s portion
in considerably better condition than Kenya’s. The Africa
News Service writes that the “[Mombasa-Nairobi] road is a
BASIC INFORMATION
HDI Rank: 150
GDP per capita
2000 (PPP$): $1,208
Exports per capita
2000 (current USD): $28
Distance to port:
1,187km
Transport cost ratio:
(1999) 0.35
Neighbors:
Democratic Republic of Congo,
Kenya, Rwanda, Sudan
Primary transit countries:
Kenya
Main trading partners (2001):
Imports: Kenya (44%),
India (7%)
Exports: Belgium (17%),
Netherlands (15%)
Primary Exports (2000):
Coffee (22%)
Fish (17%)
Domestic Roads: good
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
Transit Country Ports:
perfect symbol of neglect. The current state of the road is appalling.” (Pod 1998)
Globalsecurity.org agrees, highlighting the poor condition of the road and claiming that it
takes twice as long to transport a container from Mombasa to Kampala than it does from
London to Mombasa (Global Security 2002). The Ugandan section of the corridor, however,
is reported to be in vastly improved condition, allowing for speeds of up to 120km/hr for
passenger traffic.
poor
poor
fair
Neighboring Civil Conflict:
low
Relations w/ Neighbors:
good
- 38 -

Despite these improvements, the road corridor continues to suffer from the volatile heavy
rains of the region. The recent rains caused by El Niño, for example, destroyed several
bridges on the Kampala-Mombasa route and precipitated landslides, resulting in the closure
of “East Africa’s umbilical cord.” The failure of the railway to provide any significant
competition has further hindered the development of the road corridor.
In the late 1970s, Uganda’s notably good domestic road system (previously considered the
best in Eastern Africa) fell into a state of neglect and deterioration. It is estimated that there
was a 75% loss in road network investment due to deterioration during this period (World
Bank 2001). Responding to the high transport costs and negative economic growth, the
Ugandan government committed itself to improving transport infrastructure. By 1995,
approximately 70% of Uganda’s main roads were considered to be in good condition – a
dramatic improvement from the 10% figure of 1986. Roads are generally considered to be
better in the major centres of southern Uganda and less well developed in the north.
For details on the Central Corridor, see the section of this report on Burundi.
Rail
The Ugandan rail system has fallen victim to decades of poor maintenance, and now
accounts for only 10% of total domestic freight and 30% of external trade freight. Only the
Kampala to Kenya line of the original colonial rail network remains operational, and only for
freight (EIU 2002). While this line has the potential to reduce the burden of transit freight on
the Kampala-Mombasa highway, its dilapidated condition and undependability prevent it
from doing so in any significant quantity. It is estimated that an average freight trip from
Kampala to Mombasa takes 21 days, with trips often taking as many as 60 days. The
undependability of the rail arrivals often make it impossible to book ships ahead of time at
the port of Mombasa, causing further delays. To deal with these shortcomings, East African
countries are beginning to show increased cooperation. Tanzanian railways, for example, is
now offering Ugandan businesses their own “dedicated wagons” which will help alleviate
delays at ports. The possibility of creating a new rail network linking East, Central and
Southern Africa through Uganda and Zambia is also being discussed, with support from the
governments of Uganda, Rwanda, Burundi and Zambia.
Ports/Waterways
Uganda primarily uses the ports of Mombasa and Dar es Salaam, with Mombasa carrying the
bulk of Uganda’s freight. Efforts were recently made by Tanzania to improve the port of Dar
es Salaam in order to attract trade from the landlocked countries of the region. These have
witnessed some success. Ugandan bound imports through the port of Dar es Salaam
increased by 10,000 tons from January to October of 2000. The port of Mombasa has also
witnessed recent improvements, most notably the US$65 million grain handling facility,
which will help relieve general congestion and decrease ships’ turn-around times. Many of
the recent improvements undertaken by these ports can be seen as a product of the direct
competition between Dar es Salaam and Mombasa for East Africa’s landlocked countries’
trade.
- 39 -

POLITICAL RELATIONS
The formation of the East African Community in 2001 promises to improve the generally
good diplomatic relations amongst Kenya, Tanzania and Uganda. Recent elections in Kenya
should also further improve Uganda’s relations with its eastern neighbor as Ugandan
President Yoweri Museveni’s relationship with former Kenyan President Daniel Arap Moi
had become somewhat strained.
Uganda’s relationships with its other neighbors, however, are not nearly as strong and have
typically been unstable. To the north, the civil war in Sudan frequently spills over into
northern Uganda making this border crossing nearly impossible. Sudan continues to support
the Ugandan rebel group, the Lord’s Resistance Army, while Uganda supports the Sudanese
People’s Liberation Army. Such alliances led to a diplomatic rift in 1995. While a peace
agreement was signed in 1999, the treaty has never been implemented.
To the south, relations with Rwanda continue to deteriorate as a result of conflicting agendas
in the DRC civil war. Not only does each country support a different rebel faction, but there
also appear to be conflicts over resources found in eastern DRC. Such hostilities are said to
have been aggravated by differences in opinion between Mr. Museveni and Rwanda’s
President Paul Kagame. Escalating tensions brought the two countries to the brink of war in
2001, but mediation by the UK temporarily mollified both sides.
- 40 -

RWANDA
Despite having a relatively well-developed internal transport
network, Rwanda faces extreme challenges as a landlocked
country. To reach global markets, its exports, mainly coffee
and tea, must be shipped over 1500 km, and usually through
two transit countries, to the nearest port. These challenges are
in addition to the internal and surrounding conflict that has
plagued Rwandan transport. The country has suffered twofold
from the recent civil war. First, immediate damage was
caused to existing infrastructure by the fighting; in particular,
several key bridges were damaged rendering vital corridors
impassable. Second, the Rwandan government was forced to
focus its government policy on relief and humanitarian
assistance rather than infrastructure maintenance. Since the
war, few government resources have been available for the
transport sector.
As in the case of Uganda, there are two potential corridors by
which Rwanda can access the high seas: the Northern Corridor
from Kigali through Uganda and Kenya to Mombasa, and the
Central Corridor from Kigali to Dar es Salaam (Tanzania).
Like Uganda, Rwanda continues primarily to use the Northern
Corridor, which accounts for more than 70% of imports and
80% of exports. Yet Rwanda is even more dependent on
coffee and tea exports than Uganda, and thus even more
subject to the perils of high transport costs relative to the
prices of good shipped.
The Northern route is dominated by the road between
Mombasa and Kigali, but also uses the rail from Kampala to
Mombasa. The Central Corridor also has an all road route, and
a recently developed road/rail route via Isaka (Tanzania),
where a dry-dock was completed in 1999 to allow goods to be
pre-cleared through customs at Isaka rather than in Dar es
Salaam (TRC 2002). Despite such improvements, both the
Tanzanian and Ugandan railways play a minimal role in
Rwanda’s flow of goods.
BASIC INFORMATION
HDI Rank: 162
GDP per capita
2000 (PPP$): $943
Exports per capita
2000 (current USD): $18
Distance to port:
1,867km
Transport cost ratio:
(2000) 0.51
Neighbors:
Burundi, Democratic Republic
of Congo, Tanzania, Uganda
Primary transit countries:
Kenya, Uganda
Main trading partners (2001):
Imports: Kenya (22%),
Belgium (8%)
Exports: Germany (26%),
Hong Kong (9%)
Primary Exports (2000):
Tea (37%)
Coffee (34%)
Domestic Roads: good
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
Transit Country Ports:
none
poor
fair
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: fair
TRANSPORT INFRASTRUCTURE
Road
Rwanda’s transit trade is primarily dependent upon the Northern and Central road corridors.
The Northern Corridor to Mombasa is of reasonable quality and is discussed in detail in the
- 41 -

section on Uganda. The Central Corridor through Tanzania to Dar es Salaam is of poor
quality and is discussed in detail in the Burundi section.
Rwanda’s internal road network is in good condition and compares favorably with those of
its neighbors. Moreover, the internal network has rather extensive coverage with an average
distance from household to nearest trunk road of 4 km. The greatest problem facing the
Rwandan road system is a general lack of funds – the Rwandan Road Fund has a budget of
only US$4 million per annum, compared to US$10 million per annum before the civil war.
Rail
Rwanda has no railways. There are, however, plans to construct a rail line from Kigali to
Isaka 16 (Tanzania) which would allow direct rail service from Kigali to the port of Dar es
Salaam. Unfortunately, the government has not yet been able to secure funds for this
proposal.
The Tanzanian railway that Rwanda uses for some of its freight transport is considered to be
unreliable and in poor condition (EIU 2002). Attempts to modernize are in progress ,
including the construction of a dry dock at Isaka in 1999 which allows customs clearance at
Isaka with no further customs requirements at Dar es Salaam (TRC 2002).
Ports
Although the port of Dar es Salaam is consistently rated as the most efficient in East Africa,
Rwanda continues to use the port of Mombasa for a majority of its international trade
(College Publishers 2001). Both ports continue to improve their efficiency as a result of the
direct competition for the landlocked countries’ trade.
POLITICAL RELATIONS
Plagued by the remnants of a civil war and one of the worst genocides in modern history,
Rwanda has only recently begun to establish a semblance of domestic stability. Regional
conflicts and less-than-stable relations with neighboring countries have further complicated
the country’s prospects for development. The most significant of these crises has been the
ongoing civil war in the DRC, in which Rwanda is directly involved. In 1999, Rwanda
invaded DRC in an attempt to remove the current government of President Laurent Kabila
and to protect its western border from Hutu rebel groups. Rwanda backs the Congolese Rally
for Democracy - Goma (RCD-Goma). Some suggest that Rwanda’s continuing involvement
is related to newly developed commercial and political interests in eastern parts of the DRC
(Reuters 2002a). Earlier this year a tentative peace agreement was signed, providing for the
withdrawal of Rwandan troops (Reuters 2002b).
The conflict in the DRC has also soured relations with Uganda. While Rwandan and
Ugandan forces began the war fighting on the same side, a split in the Congolese rebel forces
exposed the differing objectives of the two countries. Such tensions have been further
heightened by the personal tensions between President Museveni and President Kagame. In
1999-2000, there were several clashes between the two countries in the mineral-rich
16 This is the location where goods traveling from Dar-es-Salaam on the Tanzanian railway are currently
transferred to road.
- 42 -

Congolese town of Kisangani. Both sides appeared close to war in 2001, but attempts at
mediation by the UK calmed the situation. This tension between Rwanda and Uganda was
not new – a 1990 dispute led to the temporary closing of the border between the two
countries.
The final transit country on the Northern Corridor, Kenya, partially severed diplomatic ties
with Rwanda in 1996 when it ordered the closure of the Rwandan embassy in Nairobi. This
followed the arrest of a Rwandan official connected to the assassination of the Rwandan
Interior Minister. More recently, Kenya was accused of harboring genocide suspects from the
1994 killings.
Rwanda’s relations with the Central Corridor transit country, Tanzania, remain cordial but
have been strained by the lingering Rwandan refugee population. Tanzania called for the
repatriation of all refugees by December 31, 2002, which was largely accomplished on time.
The Rwandan government also harbours suspicions that the Tanzanian government supports
Rwandan rebel groups, further contributing to the tension. Tanzania denies such accusations.
- 43 -

BURUNDI
In addition to lying over 1,200km from the nearest port,
Burundi is faced with the constant challenge of navigating its
international freight through the surrounding, and internal
ebullitions of ethnic tensions and civil war. Unable to trade to
the West because of the violent civil war in the DRC and
limited trade routes, Burundi must rely on the Northern
Corridor (via Rwanda, Uganda and Kenya) to the port of
Mombasa (Kenya) and the Central Corridor to the port of Dar
es Salaam (Tanzania). The Northern corridor includes three
border crossings for Burundi, all of which have been
particularly vulnerable to regional instability. The Central
Corridor, while only necessitating one border crossing
(Burundi-Tanzania), is marred by relatively poor
infrastructure, and further threatened by increasing tensions
between Tanzania and Burundi.
In dire circumstances, as during the period of regional
sanctions (1996-7), a third corridor from Bujumbura to South
Africa via Mpulungu on Lake Tanganyika is an alternative
route. At a total distance of nearly 4,500km, and including up
to four border crossings and three modal changes (depending
on routing), this corridor is normally a poor substitute for the
more direct links.
The intense challenges to Burundi’s transit trade, coupled with
its low levels of overall development and high degree of
market dependence on the low value-to-volume products
coffee and tea, have resulted in extremely low overall export
levels. At only $9 per capita, Burundi exports approximately
half the amount per person of Rwanda’s already extremely
low $18 per capita.
BASIC INFORMATION
HDI Rank: 171
GDP per capita
2000 (PPP$): $591
Exports per capita
2000 (current USD): $9
Distance to port :
1,254km
Transport cost ratio
(2000): 0.31
Neighbors:
Democratic Republic of Congo,
Rwanda, Tanzania
Primary transit countries:
Rwanda, Uganda, Kenya,
Tanzania
Main trading partners (2001):
Imports: Belgium (16%)
Saudi Arabia (11%)
Exports: United Kingdom (28%)
Switzerland (26%)
Primary Exports (2000):
Coffee (73%)
Tea (26%)
Domestic Roads: good
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
Transit Country Ports:
none
poor
fair
TRANSPORTATION INFRASTRUCTURE
Neighboring Civil Conflict:
high
Relations w/ Neighbors: poor
Road
Both of Burundi’s direct transit corridors are largely dominated by road transport. The road
to Dar es Salaam, by which Burundi transports a majority of its freight, is marked by poor
conditions, and is considered to be significantly worse than the Northern Corridor roads.
Flooding associated with the wet season further hampers transport on these corridors.
However, a new EU-supported project in Tanzania will upgrade several segments of the
Central Corridor. The project will also include the construction of a weighbridge to ensure its
sustainability. For more discussion on these corridors, please refer to the Rwanda and
Uganda studies.
- 44 -

Burundi’s internal road network is in good condition. The trunk roads to the Rwanda and
Tanzania border have both recently undergone improvements, including the construction of a
modern parking facility at the Kobero (Tanzania) crossing.
Rail
Burundi has no internal rail system but depends on the Tanzanian rail from Kigoma
(Tanzania) on Lake Tanganyika to Dar es Salaam for much of its transport. The Tanzanian
railway is considered to be unreliable and in poor condition. In June 2002, the Tanzania
Railways Corporation suffered one of the deadliest train crashes in the continent’s history
when one of its trains lost power and rolled backwards down a slope crashing into a freight
train and reportedly killing over 200 people.
Burundi also uses the Ugandan railway from Kampala to Mombasa, although this corridor is
dominated by road transport. While this line has the potential to reduce the burden of transit
freight on the Kampala-Mombasa highway, its dilapidated condition and undependability
prevent it from doing so to any significant extent. As mentioned in the Uganda section of this
report, it is estimated that an average trip from Kampala to Mombasa takes 21 days. The
unreliability of the rail arrivals often make it impossible to book ships ahead of time at the
port of Mombasa, causing further delays (EIU 2002).
Ports/Waterways
Most of Burundi’s goods eventually pass through the port at Dar es Salaam, while a smaller
percent use the port at Mombasa. Handling charges at the port of Dar es Salaam are cheaper
than those at Mombasa: charges for a 20ft container at Dar es Salaam are about $1,470,
compared to $1,870 at Mombasa. Both ports have benefited from recent infrastructural
improvements, including the construction of a grain handling facility at the port of Mombasa.
Many of the recent improvements undertaken by these ports can be seen as a product of the
direct competition of these ports for East Africa’s landlocked countries’ trade.
The inland port of Bujumbura on Lake Tanganyika plays a major role in Burundi’s
international flow of goods. Approximately 80% of Burundi’s external trade passes through
this port on its way to Kigoma and ultimately Dar es Salaam. The port is operating at undercapacity,
and is not considered to require additional capacity in the near future (UNCTAD
1999a).
POLITICAL RELATIONS
For the last decade and much of its history Burundi has been marked by violent civil wars
and unstable relations with its neighbors. The 1993 assassination of its first democratically
president, Melchior Ndadaye, sparked a bloody war that has continued for over a decade
between the minority Tutsi-dominated army and ethnic Hutu rebels. Destruction of
infrastructure, regional economic sanctions, and aggravated tensions with neighbors due to
increasing spillovers of violence and refugee migrations have all compounded Burundi’s
position as a landlocked country. While a tenuous and long-sought cease fire was signed in
December 2002, both sides accused each other of breaking the agreement only days later.
- 45 -

In 1996, after Major Pierre Buyoya seized power, Burundi’s neighboring countries imposed
strict sanctions on the country, including the closure of all transportation links. It is estimated
that these sanctions led to a 50 per cent loss in Burundi's export earnings and a 25 per cent
increase in import costs in 1996. In addition to the sanctions, an international aid freeze was
inflicted on Burundi. The sanctions necessitated the diversion of much of Burundi’s external
trade to the ancillary Zambian corridor, and forced much of the regional trade into the
informal sector. Such instability has restricted Burundi’s former role as a regional exporter
and re-exporter of manufactured goods.
Burundi’s relations with its most vital transit neighbor, Tanzania, have been particularly
strained as a result of its own ongoing civil war. Tanzania continues to strongly oppose Tutsi
military rule, and led the campaign for regional sanctions in 1996. The hundreds of thousands
of Burundian refugees now living in Tanzania have further weakened relations (CNN 2000).
The refugees are not only a strain on the Tanzanian economy, but also often lead rebel
attacks on Burundi, undermining border security. Burundi accuses Tanzania of aiding such
anti-government rebels (BBC 2002).
Burundi is also involved in the civil war to its west in the DRC. Hostilities between the two
governments are largely a product of the Congolese government’s weapons support for one
of the main Burundian rebel groups, the CNDD-FDD. Similarly, the Burundian government
has good relations with Rassemblement congolais pour la démocratie (RCD), the main rebel
group opposing the DRC government.
Burundi has meanwhile suffered from increasing tensions with its northern neighbor
Rwanda. Despite facing similar internal ethnic tensions, the two governments are said to
mistrust each other. Rwanda took part in the 1996-99 economic sanctions levied on Burundi.
Burundi’s trade challenges have been exacerbated by conflicts independent of its own. All
three border crossings along the Northern Transit Corridor have been subject to instability: in
addition to the problems on the Burundi-Rwanda border, the Rwanda-Uganda border has
witnessed increasing violence as a result of differing objectives in the DRC war and the
Uganda-Kenya border has also been subject to periodic tensions and closures.
- 46 -

ETHIOPIA
Once a maritime country, Ethiopia now faces a difficult
political challenge in accessing the sea, having lost its
coastline to Eritrea in 1991. Throughout much of the 1990s
Ethiopia continued to depend on the Eritrean port of Assab,
which carried over 75% of its international trade. The recent
border conflict with Eritrea, which began in 1998 and led to
border closures dramatically reduced the viability of this port.
This has resulted in a major shift of trading routes used by
Ethiopia from Assab to the port of Djibouti, which now
handles the large majority of Ethiopian trade. The Djibouti
corridor, however, is hampered by both an unreliable and
poorly functioning railroad and limited port facilities.
Ethiopia’s other potential transit corridor, through Somalia, is
not used due to tense political relations, extremely poor
infrastructure and the Somali civil war.
TRANSPORTATION INFRASTRUCTURE
Road
As in most African countries, roads play a dominant role in
Ethiopia’s trade, carrying approximately 95% of the country’s
passenger and freight traffic (World Bank 2000).
While the primary road corridors from Addis Ababa to Assab
and Djibouti are considered to be of international standards
(Giorgis 1995), the recent closing of the Ethiopia-Eritrea
border has unduly shifted much of Ethiopia’s freight burden
onto the Djibouti corridor, leading to increased wear on the
road. The road now requires significant investment to sustain
present volumes of trade (EIU 2002).
BASIC INFORMATION
HDI Rank: 168
GDP per capita
2000 (PPP$): $668
Exports per capita
2000 (current USD): $15
Distance to port:
781km
Transport cost ratio
(2000): 0..29
Neighbors:
Djibouti, Eritrea, Ethiopia,
Kenya, Somalia
Primary transit countries:
Djibouti
Main trading partners (2001):
Imports: Saudi Arabia (29%)
Italy (7%)
Exports: Djibouti (14%)
Italy (10%)
Primary Exports (2000/1):
Coffee (40%)
Leather (17%)
Domestic Roads: fair
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
poor
poor
Despite its relatively adequate transit road corridors, Ethiopia
suffers from an inadequate internal transportation network. It
has one of the lowest road densities in the world, with only
20% its land area being within 10km of an all-weather road
and 70% of its farms being more than a half-day walk from an
Transit Country Ports:
all weather-road. The spoke-like nature of the road system, with Addis Ababa at the centre,
contributes to this problem and hinders direct transport and trade between rural areas.
Moreover, those roads that do exist are often of extremely poor quality. Such an inadequate
internal transport system has been particularly devastating where struggles with chronic food
shortages in certain areas are juxtaposed with surpluses in others. The last two years, for
example, witnessed a bumper harvest of maize in Ethiopia. Poor infrastructure and its
associated costs, however, have hindered the flow of this surplus to the deficit areas and have
left 11 million people at risk of starvation.
fair
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: poor
- 47 -

Recognizing the dramatic effects that the poor domestic infrastructure system has on the
economy, the Ethiopian government has recently exhibited significant political commitment
to improving the domestic road system. Matching its professed commitment to improving
road infrastructure, as emphasized in the Poverty Reduction Strategy Paper, the Ethiopian
government now allocates over 20% of its capital budget to improvements in the road
system. It has launched the second Road Sector Development Project (RSDPII 2002-2007)
hoping to improve upon the moderate successes of RSDPI. While RSDPI did not achieve
many of its targets, significant improvements were made: the percentage of federal roads in
good condition improved from 14% to 30% (the target was 60%), the percentage of regional
roads in fair condition improved from 15% to 30%, and the road system witnessed a 30%
increase in total length. Underscoring the importance of reliable coastal access, Ethiopia has
granted priority, under the RSDPs, to those roads that provide access to ports.
Rail
Ethiopia is connected by railway to the port of Djibouti. The poor performance of this
railway is one of the primary factors limiting growth on this corridor. The railway is more
than 100 years old, has limited capacity, and is subject to excessive delays and inefficiencies.
Since the closure of the Eritrean transit corridor, these inefficiencies have had a more
pronounced effect on Ethiopia’s trade costs. Ethiopia has recently announced plans to
revitalize the railway and reduce the number of checkpoints along its route. The EU has
provided funding for the design and documentation phase of upgrading the line. Ethiopia
plans to complete the rehabilitation project by 2004 (Africon 2002).
Ports
Shortly after losing its coastline, Ethiopia signed a transit services agreement with Eritrea in
1992 that provided for the expeditious movement of international freight between the two
countries. This agreement and the cooperative spirit between Ethiopia and Eritrea helped
maintain Assab as the primary port for Ethiopian trade, accounting for over 75% of
Ethiopia’s international cargo flow. The start of the Ethiopia-Eritrea conflict in 1998,
however, shifted the majority of Ethiopian trade toward the port of Djibouti.
Today, approximately 98% of Ethiopia’s international trade passes through the port of
Djibouti, amounting to 70% of all traffic passing through the port (World Bank 2001;
Africon 2002). This dominance has yielded significant bargaining leverage for Ethiopia.
Ethiopia benefits from the 1993 Djibouti Port Utilization Agreement, passed well-before the
Ethiopia-Eritrea conflict began, which allows Ethiopia the permanent right to use the port.
The agreement also ensures that any preferential tariffs on services offered by the port of
Djibouti are enjoyed by Ethiopia and that Ethiopia can obtain plots of land in the duty-free
area (Giorgis 1995). Given the increased traffic though the port of Djibouti, port authorities
have now formulated a $15 million expansion of the port's terminal, including $2 million to
pay for the computerization of the port facilities.
The only other proximate ports to Ethiopia are those in Somalia. These suffer from problems
of domestic disorder and are not significantly used by Ethiopia.
- 48 -

POLITICAL RELATIONS
Ethiopia’s access to the sea has been severely hindered by recent civil conflict and regional
wars. The most recent of these has been the devastating war with Eritrea, which was ignited
over a border dispute in 1998. Eritrea was annexed by Ethiopia in 1962 then regained
independence in 1993 after the conclusion of a bloody civil war. Tensions between the
countries were momentarily relaxed, when the post-war Ethiopian government allied itself
with the new Eritrean state. In 1998, however, such rapprochement was lost as a
disagreement over the location of the border and bilateral trade disputes led to an explosive
civil war. The war has cost Ethiopia not only thousands of lives, but also the loss of an
important regional trading partner and valuable access to the sea.
Relations with Somalia are also strained, dating back to the 1970s when Somalia launched a
war to capture the Ogaden region of south-eastern Ethiopia. Tensions remain high between
the countries with Ethiopian troops repeatedly entering Somalia in pursuit of groups hostile
to the Ethiopian government. Conversely, the Somali government has recently accused
Ethiopia of providing support to Somali rebel factions (BBC 2001).
Previous tensions with Sudan have recently abated, with both countries viewing themselves
as victims of Eritrean aggression. The two countries have tenuously united in an attempt to
isolate Eritrea.
- 49 -

AFRICA - WESTERN
TRANSIT ROUTES OF BURKINA FASO, MALI AND NIGER
- 50 -

TRANSIT ROUTES OF CENTRAL AFRICAN REPUBLIC AND CHAD
Amongst the landlocked countries of the world, those of western Africa have the lowest
levels of human development both on an absolute scale and in relation to their maritime
neighbors. These countries have suffered both from widespread internal strife and
surrounding civil wars which have rendered most transit corridors impassable at least once
over the past decade. Of the eight transit countries in the region, six have been involved in at
least one civil conflict severe enough to have blocked transit trade in the last ten years. 17
These conflicts not only impose significant direct costs through the need to use alternative
ports, but also limit long-term foreign investment delay because of the associated uncertainty
17 The only two countries not to have been involved in a significant civil conflict are Cameroon and Benin.
Cameroon is characterized by very poor levels of infrastructure – unpaved roads susceptible to flooding form
much of the transit route from Chad & the Central African Republic through Cameroon. Benin’s port at
Cotonou is considered to be one of the least well equipped in the region.
- 51 -

of transit. In fact, the landlocked countries of western Africa receive only 23% of the already
low levels of FDI per capita of their regional neighbors.
The political challenges of this region are exacerbated by the extremely poor transport
infrastructure, both in the landlocked countries and their transit neighbors. Contributing to
such poor infrastructure are the difficult geographic conditions of the region, in particular the
heavy rainy seasons. These rains can often leave the main roads flooded for months at a time
and have devastating effects on the rural feeder roads. Prolonged dry seasons, on the other
hand, often render the region’s many rivers impassable. The effects are particularly acute for
the large countries Niger, Mali and Chad, where significant areas of land are often cut off
from the rest of the country for much of the year.
Attempts to ease such transit challenges through regional integration have thus far been
unsuccessful, largely as a result of continuing political instability. Reflecting such instability,
severe corruption and bureaucratic limitations persist.
- 52 -

BURKINA FASO
Burkina Faso’s transit trade suffers from the concurrent
problems of high levels of civil conflict in its neighbors, poor
domestic infrastructure levels and cumbersome border and
administrative procedures. In addition, despite Burkina Faso’s
numerous potential routes to the sea, Burkinabe trade passes
almost solely through its Francophone neighbors Côte d’Ivoire
(to the port of Abidjan) and Togo (to the port of Lomé).
Shorter trade routes through Ghana are less frequently used 18
due to language difficulties, currency problems, and bad road
conditions (UNCTAD 1999).
Due to its dependence on these two routes, Burkina Faso is
highly vulnerable to the civil conflicts in Côte d’Ivoire and
Togo. Between 1990-93, as a result of the crisis in Togo, the
volume of Burkina Faso transit through the port of Lomé fell
by 60% (UNCTAD 1999). Similarly, the crises in Côte
d’Ivoire (previously the outlet for 80% of Burkinabe trade)
have significantly restricted transit movement, causing
Burkina Faso to attempt to open up a new route to the Gulf of
Guinea in Ghana (OECD/AfDB 2002)
TRANSPORT INFRASTRUCTURE
Road
While the two main transit road corridors from Ouagadougou
to Abidjan and Ouagadougou to Lomé are in fair condition,
the poor condition of road vehicles significantly hinders
efficient trade. Most Burkinabe road vehicles are over 10
years old and cannot be fastened or securely sealed to carry
international freight. In fact, it is estimated that transporting
using Burkinabe trucks costs up to 37.5% more than the same
shipment using Ghanian trucks (UNCTAD 99). Vehicle
overloading has also been a problem and has led to the
increasing deterioration of roads.
BASIC INFORMATION
HDI Rank: 169
GDP per capita
2000 (PPP$): $976
Exports per capita
2000 (current USD): $21
Distance to port:
1,154km
Transport cost ratio
(1994): 0.27
Neighbors:
Benin, Côte d’Ivoire, Ghana,
Mali, Niger, Togo
Primary transit neighbors:
Côte d’Ivoire, Togo
Main trading partners:
Imports: Côte d’Ivoire (25%)
France (24%)
Exports: Singapore (15%)
Italy (14%)
Primary Exports (2001):
Cotton Seed (57%)
Livestock products (19%)
Domestic Roads: fair
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
Transit Country Ports:
poor
poor
good
Neighboring Civil Conflict:
high
Relations w/ Neighbors: fair
Cumbersome administrative processes and border crossings present another significant
problem for these routes. It is estimated that delays at border crossing for customs procedures
can range anywhere from 24-48 hours. Trade routes are also littered with rigorous police
checkpoints that cost not only time, but often also money in the form of bribes. Furthermore,
customs escorts are required for transport but only depart three times a week resulting in
further delays. Vehicles waiting for a convoy to form often sit on the side of the road not
18 Less then 5% of Burkinabe transit passes through Ghana.
- 53 -

only hindering normal road traffic but also contributing to road damage. In fact, an ironic
consequence of a special anti-competitive provision that reserves two thirds of freight for
carriage by vehicles from landlocked countries has resulted in significant additional delays:
goods at maritime ports wait for the arrival of vehicles from landlocked countries, despite the
presence of vehicles from maritime countries. 19
Although still largely inefficient, Burkina Faso’s domestic transport network has seen
significant improvements in recent years, reflecting the government’s prioritization of this
sector and donors’ support for the recent US$360m transport sector adjustment programme.
This has resulted in an increase in the road network from a single main road to 15,000km of
good roads (OECD/AfDB 2002).
Rail
The Abidjan – Ouagadougou rail corridor is the principal railway serving Burkina Faso. Like
much of Africa’s rail infrastructure, it is in poor condition and lacks proper maintenance. The
average age of the rolling stock exceeds 25 years. A 1995 UNCTAD study reports that the
2,308 km round-trip between Abidjan and Ouagadougou takes approximately 30 days. 20 The
deterioration of the railway is also having adverse effects on the road system since more
freight must now be shipped by road. Recent efforts to improve this railway, including a
$31m dollar loan from the World Bank, have resulted in sharp increases in carried freight
(EIU 2002).
Ports/Waterways
The primary ports serving Burkina Faso, Abidjan and Lomé, are considered to be two of the
best ports in Western Africa. Both are well-equipped, competitive, and in good condition
with sufficient storage for processing Burkinabe cargo. Burkina Faso, however, only uses a
small fraction of its allotted storage space at these ports. The one problem lobbied in
negotiations regarding the port of Abidjan concerns the delays caused by cumbersome
customs formalities, which can often take up to 10 days. None of the three rivers passing
through Burkina Faso are navigable for commercial ships.
POLITICAL RELATIONS
While Burkina Faso has witnessed domestic civil unrest, violence, and political instability,
such internal tension has not been as explosive as that of surrounding countries. Rather,
Burkina Faso’s international trade has been primarily hampered by the surrounding turmoil
that has plagued the region for much of the last two decades. Its most serious constraint has
been the recent outbreak of civil war in Côte d’Ivoire. The conflict has not only taken the
lives of several thousand, but also virtually halted transport within the country. With the
north of the country being controlled by the rebels, the primary railroad corridor to the port
of Abidjan has been closed. Since the overwhelming majority of Burkinabe trade has
traditionally passed through this corridor, this crisis has severe effects on Burkina Faso’s
economy.
19 Hence, while assisting trucking companies from landlocked countries, it significantly delays the transit trade
of landlocked countries.
20 This is approximately the same distance as Paris - Berlin or Los Angeles - Salt Lake City, roundtrips that take
about 30 hours.
- 54 -

The effects of the surrounding instability are not always as direct. In the case of Togo, for
example, the broadly questioned results of the 1998 election provoked the EU, World Bank,
and IMF to suspend financial assistance thereby limiting investment in the transport sector.
The consequent deterioration of infrastructure has hurt Burkina Faso.
Burkina Faso’s position as a landlocked country is further weakened by poor relations with
its most important neighbor, Côte d’Ivoire. The Burkina Faso-Côte d’Ivoire relationship is
considered to have recently “hit rock bottom” (Vanguard 2003). Such escalated tensions have
largely been the result of Ivorian accusations that Burkina Faso instigated the recent rebel
war. Burkina Faso has now accused Côte d’Ivoire of persecuting and murdering Burkinabe
citizens living within its border.
Burkina Faso’s relations with its other neighbors have been mixed. In the mid 1990s Burkina
Faso supported Liberian President Charles Taylor and the rebels in Sierra Leone thus
isolating itself from the policies of some neighbors. Burkina Faso also engaged in a brief war
with Mali in 1985 over a disputed border. However, recent attempts have been made to better
integrate the area and bring about peace. Most notably, Burkina Faso has cooperated closely
with Ghana in making the Economic Community of Western African States functional. The
two countries agreed on bilateral relations recognizing the importance of the countries’
economic integration (News in Ghana 2002).
- 55 -

CENTRAL AFRICAN REPUBLIC
With only two transport corridors, from Bangui to Douala
(Cameroon) and Point Noire (Congo), Central African
Republic’s transport system is particularly vulnerable to the
harsh and unpredictable weather patterns and to the
surrounding political crises of the region. The Cameroonian
corridor, which includes both rail and road modalities, is
highly susceptible to heavy rains and can often be impassable
during the wet season. The Congo corridor, which depends on
river transport on the Oubangui River, is only passable during
the wet season when water levels are high. The result is that
Central African Republic (CAR) does not have a dependable
all-weather transport corridor to the coast. Moreover, both of
these corridors have suffered from regional political crises.
The border post on the Cameroonian corridor was closed in
2001 due to a dispute with Cameroon, effectively cutting CAR
trade from international markets. The Congo corridor has
been recently closed to CAR traffic due to the ongoing war in
the DRC.
Further complicating the challenges faced by CAR, two of its
lmain exports, coffee and cotton, are only harvested in the dry
season, when the Point Noire corridor is closed. The volatility
of world prices for these commodities makes them particularly
vulnerable to high transport prices.
TRANSPORT INFRASTRUCTURE
Road
In addition to the poor state of the transit road through
Cameroon and its susceptibility to heavy rains, the Douala –
Bangui transit corridor is subject to rigorous customs
procedures and seemingly arbitrary checkpoints by police and
the army, leading to further delays and higher transport costs.
Customs procedures at the border can take as long as two
weeks, with goods often waiting at the border for the requisite
information to be sent from Bangui. The full Doala-Bangui
trip generally takes three weeks to a month. The Central
BASIC INFORMATION
HDI Rank: 165
GDP per capita
2000 (PPP$): $1,172
Exports per capita
2000 (current USD): $34
Distance to port:
1,518km
Transport cost ratio
(1994): 0.26
Neighbors:
Chad, Cameroon, Congo,
Democratic Republic of the
Congo, Sudan
Primary transit neighbors:
Cameroon, Congo
Main trading partners:
Imports: Germany (29%),
Spain (7%),
Pakistan (7%)
Exports: Belgium (57%),
Spain (9%)
Primary Exports (2001):
Timber (41%)
Diamonds (41%)
Domestic Roads: poor
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
African Customs and Economic Union (UDEAC) has been less successful at streamlining
such processes and introducing regional standards than the Economic Community Of West
African States (ECOWAS).
Beyond the difficulties of transport to Bangui, the Central African Republic faces immense
difficulties with its internal transport network. Without any rail system, the Central Africa
none
fair
Transit Country Ports: poor
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: fair
- 56 -

Republic depends almost exclusively on its road network for internal transport. This road
system, however, with only 450 km of paved roads centered around Bangui (ITDN 2001) is
wholly inadequate for reaching much of the country. In fact, the northern and eastern parts of
the country remain largely inaccessible for several months each year during the wet season.
Rail
The Central African Republic has no rail system. It depends on the Cameroonian railway for
much of its trade passing through Douala. This railway is considered to be in good condition
and is operating below capacity. There are, however, delays associated with inadequate
transshipment facilities.
Ports/Waterways
The Oubangui River, which has traditionally played a vital role in the CAR’s trade, was
recently rendered impassable by the conflict in the Democratic Republic of Congo. River
transport is also severely limited by the season, only being possible during the wettest
months of the year. Even when the river is passable, river transit is extremely slow with the
journey from Point Noire to Bangui normally taking 2.5 months. With peace hopefully
returning to the DRC, allowing passage on the Oubangui River, the Lake Chad Basin
Commission has begun discussed damming the river in order to make it passable year round.
River transport in the Central African Republic also suffers from poorly equipped river ports
(i.e. Belabo and Bangui). Now that river transport has reopened, however, plans are
underway to develop Bangui’s port.
The Douala port has facilities for general cargo, container terminals, and specialized berths
for minerals and fruit, but suffers from extensive delays and limitations on access to larger
vessels in the access channel, which need to be loaded lightly in order to access the port. Port
and customs clearance can take as many as 30 days.
POLITICAL RELATIONS
The Central African Republic, like many of its Western African neighbors, has suffered from
a decade of political instability, border disputes, and neighboring crises. With only two
corridors to the sea, Central African Republic’s trade and economy have been particularly
vulnerable to such situations.
The recent political crisis in the DRC has had a dramatic effect on Central African Republic
trade as the DRC closed its border with the CAR in order to prevent the cross-border flow of
arms and to hinder the CAR’s involvement in the war. Not only had the DRC provided one
of the major transport corridors for Central African Republic, but it had also served as one of
the CAR’s major export destinations in Africa (IMF DOTS 2002). The crisis in the DRC also
resulted in a fuel shortage in 2000, further hampering the CAR economy (ITDN 2001).
Meanwhile, the CAR has witnessed increasing tensions with Chad over accusations in both
directions of supporting rebel groups. The CAR government has also accused Chad of trying
to annex the northern part of the CAR for its rich oil reserves (EIU 2002).
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Relations with the eastern neighbor, Sudan, were soured in 1989 when Sudan did not grant
the CAR government airspace for a trip to Israel. Diplomatic relations were temporarily
severed, but have since then been restored (Atlapedia 2001).
In terms of multilateral economic agreements, the Central African Republic is a member of
the Communauté économique et monétaire de l’Afrique centrale (CEMAC), and the Franc
Zone. While CEMAC’s stated objective is the regional integration of the Central Africa
countries, 21 implementation has lagged behind its sister organization Union Économique et
Monétaire Ouest Africaine (UEMOA) due to regional instability and resistance from Gabon
and Equatorial Guinea. According to the World Bank, only 2.6% of exports from CEMAC
countries were traded within the bloc, compared to 11.1% of exports of UEMOA countries.
21 CEMAC countries include Chad, Congo, Cameroon, Gabon, the Central African Republic, and Equatorial
Guinea
- 58 -

CHAD
Chad’s notably long distances of over 1500km to the nearest
ports of Douala, Port Harcourt and Point Noire are
compounded by one of the worst transport systems in western
Africa. Its domestic density of paved roads is the lowest
among all landlocked states; most of the transport tracks are
unusable during the wet season; and there is no rail system.
Moreover, Chad has fallen victim to a vicious cycle where
poor transport infrastructure has led to the development of
numerous regional enclaves making the development of
effective transport networks more difficult and more
necessary. With over 90% of the population living in rural
areas, the development of an adequate transport system will be
essential to Chad’s overall development. It is estimated that
transport charges can be as much as much as 80% of the gross
margin of local cereal prices in N’Djamena (Herman et al
1994). Recent efforts to improve this system, including the
Transport Sector Adjustment Project 1989-1993 and the
Second Transport Sector Project 1994-1999, have seen limited
results and a lack of sustainability (World Bank 1997).
The primary transit corridors to N’Djamena (Chad) are from:
(1) Douala (Cameroon) by rail to Ngaondéré (Cameroon),
then to N’djamena by road: this is Chad’s principal trade
route; (2) Douala (Cameroon) to N’Djamena by road; (3)
Point Noire (Congo) to Brazzaville (Congo) by rail, then by
river Oubangui to Bangui (CAR), and then by road to
N’djamena (less frequently used than the other corridors); and,
(4) Point Harcourt (Nigeria) by road, which passes briefly
through Cameroon. However, goods considered to be sensitive
(i.e. wheat, rice, maize, wines, vegetables, oils, etc.) do not
use this last route, as the Cameroon border crossing presents
addition difficulties and time delays.
Given that Chad is almost completely dependent on the
Douala – N’Djamena corridor, and that all but 17 km of this
route fall in Cameroon territory, Chad’s trade is deeply
impacted by Cameroon’s infrastructure and border facilities,
both of which are inadequate.
BASIC INFORMATION
HDI Rank: 166
GDP per capita
2000 (PPP$): $871
Exports per capita
2000 (current USD): $30
Distance to port:
1,669km
Transport cost ratio
(1994): 0.51
Neighbors:
Central African Republic,
Cameroon, Libya, Niger,
Nigeria, Sudan
Primary transit neighbors:
Cameroon, Central African
Republic, Nigeria
Main trading partners:
Imports: United States (40%),
France (27%)
Exports: Portugal (28%),
Germany (15%)
Primary Exports (2001):
Livestock (40%)
Cotton (37%)
Domestic Roads: poor
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
none
fair
Transit Country Ports: poor
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: good
- 59 -

TRANSPORT INFRASTRUCTURE
Road
While the roads of Chad’s neighbors are in poor to fair condition, with extensive delays
during the wet season, Chad’s internal road network, both primary and rural 22 , is even worse.
In fact, much of Chad’s primary road network is not passable for several months of the year.
The failure of the rural roads to reach the aforementioned agricultural enclaves has been a
major detriment to poverty eradication. For example, the Salamat region in southeast Chad,
considered to be the breadbasket of the country, is unreachable to larger vehicles for almost
half the year.
Rail
Compounding the difficulties of its poor road system, Chad does not have a rail system. It
does, however, depend heavily on the Cameroonian railway from Douala to Ngaoundere,
which is considered to be relatively good and is currently operating at under-capacity.
Improvements in the rail system are also planned with the construction of the new Chad-
Cameroon pipeline (ExxonMobil 2002).
Ports and Waterways
While the port of Douala has facilities for general cargo, container terminals, and specialized
berths for minerals and fruit, it suffers from extensive delays and limitations to larger vessels.
Port and customs clearance can take as many as 30 days (Evlo 1995).
River transport is also severely limited by the climatic variability. The Oubangui river, a
central component of the Point Noire transport route, for example, is normally impassable
between February and May.
Pipelines
A 1,500km pipeline is under construction to transport up to 250,000 barrels a day from Chad
through Cameroon to an offshore marine terminal near Kribi (World Bank 2003).
POLITICAL RELATIONS
Chad has not suffered to the same extent as its neighbors from the regional turmoil of
western Africa. It continues to maintain strong relations with its neighbors, with the notable
exceptions of Libya and Central African Republic. It has recently signed an agreement with
Sudan that provides for cooperation on issues relating to regional security, borders, and
cross-border trade (CountryWatch 2002).
Relations with Libya remain bitter over a disputed piece of land between the two countries
known as the Aouzou strip, which is speculated to contain significant mineral resources.
22 The distinctions between primary and rural roads in Chad are quite different than those for most African
countries. While primary roads normally have an average of 200-500 vehicles per day in Africa, Chad’s primary
roads generally have a traffic volume of 50 vehicles a day. Similarly, while rural roads have an average of 50
vehicles a day in most of Africa, Chad’s rural roads have an average of less than 5 vehicles per day (Evlo 1995).
- 60 -

While the International Court of Justice ruled in 1994 that the territory belongs to Chad,
tensions have remained high amidst accusations that Libya has been supporting rebel groups
in the north of Chad.
Chad’s relations with CAR have seen a rapid deterioration stemming from accusations by
CAR officials that the Chadian government supported the 2002 attack against its capital,
Bangui. The CAR government has also accused Chad of trying to annex the northern part of
CAR because of its oil resource (EIU Country Report). The Chadian government,
meanwhile, accuses the CAR of supporting Chadian rebel groups. Chad also involved itself
in the recent conflict in the Democratic Republic of Congo by sending 1,000 troops to assist
President Laurent Kabila’s forces.
Chad is a member of the Communauté économique et monétaire de l’Afrique centrale
(CEMAC), and the Franc Zone. While CEMAC’s stated objective is the regional integration
of the central African countries 23 , implementation has lagged behind its sister organization
UEMOA due to regional instability and resistance from Gabon and Equatorial Guinea.
23 CEMAC countries include Chad, Congo, Cameroon, Gabon, the Central African Republic, and Equatorial
Guinea
- 61 -

MALI
Upon declaring independence in 1960, and thereby ending the
Federation of Mali (which had included Senegal), Mali lost its
coastline and direct access to the sea. Since then, an unstable
border and civil conflicts in neighboring countries have posed
significant barriers to trade and caused considerable damage
to the Malian economy. This damage has been particularly
acute given the importance of transit trade for the Malian
economy. Mali not only depends more heavily on export trade
than any other landlocked country of West Africa, but also
since it has no domestic manufacturing sector, it must import
nearly all of its consumer products and energy supply (i.e. oil).
While Mali has seven neighbors, only two of them offer
effective transit routes – Senegal and Côte d’Ivoire.
Unfortunately even these routes provide poor access to the
coast: The road network from Bamako to Abidjan (Côte
d’Ivoire) has been hampered by civil unrest, and the rail
system from Bamako to Dakar (Senegal), is marred by poor
infrastructure. There is also a third possible route through
Burkina Faso to Lomé (Togo), which plays a very minor role
due to the difficulty of transit through Burkina Faso (Evlo
1995). Trade through other neighbors is hindered by poor
infrastructure levels (Guinea), the physical barrier of the
Sahara (Algeria, Mauritania), or further landlockedness
(Burkina Faso, Niger). Coupled with this is the high
concentration of civil war in its neighbors: each of Mali’s
coastal neighbors has been involved in violent civil conflict in
the last decade, often rendering transit routes impassable.
BASIC INFORMATION
HDI Rank: 164
GDP per capita
2000 (PPP$): $797
Exports per capita
2000 (current USD): $53
Distance to port:
1,225km
Transport cost ratio
(1997): 0.35
Neighbors:
Algeria, Burkina Faso, Côte
d’Ivoire , Guinea, Mauritania,
Niger, Senegal
Primary transit neighbor(s):
Côte d’Ivoire , Senegal
Main trading partners:
Imports: Côte d’Ivoire (16%)
France (14%)
Exports: Thailand (20%)
Italy (7%)
Primary Exports (2000):
Gold (51%)
Cotton (28%)
Domestic Roads: poor
Transit Country Roads: fair
TRANSPORT INFRASTRUCTURE
Domestic Rails:
Transit Country Rails:
poor
poor
Road
The primary transit road corridor for Malian trade is from
Bamako to Abidjan (Côte d’Ivoire). As discussed in the
Burkina Faso study, this road is in relatively good condition
but suffers from cumbersome border processes and delays
Transit Country Ports: good
Neighboring Civil Conflict:
high
Relations w/ Neighbors: fair
resulting from obligatory customs escorts. In addition to this, Mali’s road transport efficiency
has suffered from a unique excess of vehicles, an indirect consequence of the emergency
food aid delivered during the drought in the early 1980s. The excess capacity places a
downward pressure on transport prices, often making the sector unprofitable, and leads to
frequent overloading. Low transport prices have also discouraged investment, resulting in an
ageing stock where over 95% of trailers and tankers are more than 11 years old.
- 62 -

Mali’s domestic transport system, consisting largely of the road network, is considered to be
relatively poor, even by the standards of the region, resulting in inflated transport costs. 24 Its
road density of 0.01 km of road/km 2 remains one of the lowest in Western Africa and is the
lowest amongst all landlocked countries. Moreover, maintenance backlogs and insufficient
resources continue to contribute to further deterioration. Internal delays in transport are
acutely felt in Mali as the economy is agriculturally based. Perishables such as mangoes,
tomatoes, and oranges can often spoil as a result of excessive delays. A recent World Bank
(2002) study estimates that US$7-8m is needed annually for road maintenance. This is
approximately US$3m more than the current expenditure of US$4.6 million a year.
Rail
Mali’s most important rail corridor from Bamako to Dakar is in poor condition. As is
common in the region, recent deteriorations in the rail system have shifted trade towards the
road network: from 1993-1999 the market share of the railway fell by nearly 50%. Both the
rails and the rolling stock are old, and maintenance is inadequate. (Evlo 1995). The
governments of Mali and Senegal, however, have made recent attempts to improve the
efficiency and commercialize the rail system, including an agreement to transfer the rail
services to a private operator.
Ports/Waterways
Mali trades primarily through the ports of Dakar and Abidjan, which are both in good
physical condition. As in the case of Burkina Faso, due to the low trade volume, Mali does
not fully utilize its exclusive port facilities (both warehousing and other physical capabilities)
at Dakar or Abidjan (Evlo 1995). However, for the small amount of trade that does use the
port, there are some complaints about the cargo handling and stowage services at Dakar.
Before the current crisis in Cote d’Ivoire, most of Burkina Faso’s exports left from the port
of Abidjan, since it is geographically closer to the center of Mali’s cotton production, while
most imports entered from Dakar which is considered to have less cumbersome import
customs procedures.
River transport in Mali is minimal since it is highly dependent on the level of rains and
limited to only a few months of the year.
POLITICAL RELATIONS
The primary problems facing Malian transit trade are the ongoing political crises and civil
wars of its neighbors. Each of Mali’s coastal neighbors has been engaged in some form of
violent civil conflict in the last decade, often making transport routes unusable: Togo was
devastated by violent political protests and deep internal conflict in the early 1990s; Algeria
was involved in a macabre civil war for much of the decade; Ghana suffered from significant
ethnic violence in 1993-1994; Sierra Leone’s ten year civil war has just recently come to a
tenuous settlement; Guinea has been stricken by a series of coups and rebel wars; and Liberia
has spent most of the last decade in violent civil wars which have threatened to spillover into
neighboring countries, thus jeopardizing regional stability even further.
24 The World Bank (2002) estimates that transport costs account for 20-30% of the total cost for Mali’s most
essential products.
- 63 -

Finally, and most importantly for Mali, Cote d’Ivoire, a regional paradigm of stability, has
recently fallen into a devastating political crisis which continues to deepen and has rendered
Mali’s most important corridor to the sea effectively impassable. Given that 80% of Malian
imports pass through Cote d’Ivoire, an increase in the Malian price level is expected.
Shortages of basic necessities and significant increases in the prices of consumer products are
already being reported although no official data are available. The local press has estimated
“that 8m tons of imports, mainly rice, sugar and construction materials, were blocked in the
port of Abidjan after the outbreak of civil unrest” (EIU 2002). In addition, Cote D’Ivoire has
traditionally been the primary source of imports for Mali, making the effects of the current
crisis on Mali even more severe.
Relations with Mauritania are tense and have suffered from deep-seated resentment between
black Malians, and Mauritanian Arabs and Tuareg. 25 Moreover, a border dispute with
Burkina Faso in 1985 erupted into armed violence and has led to a legacy of strained
relations between the two countries.
Mali is a member of several regional trade agreements including the Economic Community
of West African States (ECOWAS), Franc Zone, Union economique et monetaire oustafricaine
(UEMOA), and the Comite inter-Etats de lutte contre la secheresse ay Sahel
(CILSS). It is has a relatively open trade regime compared to its neighbors and has been in
compliance with the tariff reductions adopted by the UEMOA. Moreover, Mali has not
implemented any of the safeguard measures (i.e. antidumping tariffs, decreasing protection
tax) used by several other countries of the UEMOA (IMF 2002). Mali is also a member of
the WTO, and receives preferential access to developed markets under the Generalised
System of Preferences.
25 Mauritania does not have diplomatic relations with Senegal, an ally to Mali.
- 64 -

NIGER
Niger exports largely to its most important neighbor, Nigeria,
and to France. Trade has suffered significantly from the civil
crises of its transit neighbors as well as internal political
conflict. The crisis in Togo in the early 1990s, for example,
had serious effects as much Nigerien transit trade had to be
diverted through other, less convenient, ports. Similarly,
recent crises in Nigeria led to the closure of the Lagos port
and subsequent price increases in Niger. Even the ongoing
conflict in Côte d’Ivoire is expected to have effects on the
Nigerien economy, as transport bottlenecks are expected to
reduce the supply of intermediate inputs (EIU 2002). In
addition to these regional crises, continuing domestic turmoil
since independence has plagued Niger. The last decade has
been no exception with the continuing violence by the Tuareg
rebels, several attempted political coups (two in the last three
years), and the assassination of President Maïnassara in 1999.
Niger is fortunate to have several access corridors to the sea
via Togo, Benin, Côte d’Ivoire, Nigeria and Ghana. Only two
of these corridors (Nigeria and Benin) provide direct access to
the sea, with the others requiring passage through a third
country. It is these two direct corridors that serve as the
primary transit routes for Nigerien trade – the Benin corridor
(to Cotonou) accounts for 65%, while the Nigerian route (to
Lagos) accounts for an additional 16%.
Efforts are also being made to liberalize the transport sector,
whose monopolistic nature has been traditionally responsible
for escalated costs, although implementation has thus far been
26
slow. Despite these efforts, the road transport union
(Synidcat des Transporteurs Routiers du Niger, STRN) has
implemented a system to “allocate domestic passenger traffic
and international freight from Benin and Togo” that
establishes tariffs at a rate two-thirds above those set by
Beninese truckers (Evlo 1995).
BASIC INFORMATION
HDI Rank: 172
GDP per capita
2000 (PPP$): $746
Exports per capita
2000 (current USD): $26
Distance to port:
1,057km
Transport cost ratio
(1995): 0.28
Neighbors:
Algeria, Benin, Burkina Faso,
Chad, Libya, Mali, Nigeria
Primary transit neighbors:
Benin, Nigeria
Main trading partners:
Imports: France (19%)
Côte d’Ivoire (15%)
Exports: Nigeria (37%)
France (36%)
Primary Exports:
Uranium (35%)
Livestock (17%)
Domestic Roads: fair
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
none
poor
Transit Country Ports: fair
Neighboring Civil Conflict:
high
Relations w/ Neighbors: good
26 The Organisation commune Benin-Niger (OCBN), a joint parastatal railway company, had a monopoly of
transit from Cotonou to Parakou, and a monopoly to organize transshipment and onward transit to Niamey; and
the national road transport company, Societe Nationale des Transports du Niger (SNTN) held a monopoly on
mining freight.
- 65 -

TRANSPORTATION INFRASTRUCTURE
Road
Niger’s primary international road corridors and domestic road network are both in relatively
good condition. The principal challenges facing the Nigerien road system are police
harassment, cumbersome border delays, poorly maintained vehicles, frequent accidents, and
a lack of competition amongst transport services. The national road transport company
(SNTN), for example, did not purchase any new vehicles between 1983 and 1995. Such poor
upkeep contributes to a large annual number of road accidents. Moreover, shortly after the
Cotonou (Benin) – Niamey (Niger) road was freshly paved and upgraded it remained
virtually unused for transport as the governments of Benin and Niger, having a monopoly on
the rail route from Cotonou (Benin) – Parakou (Benin), refused to authorize its use.
Rail
Although there is currently no domestic rail system in Niger, the Beninese railway to
Parakou plays a major role in Niger’s transit trade, accounting for approximately 65% of the
total (Evlo 1995). The railway suffers from similar problems to the other rail networks of the
region: old, poorly maintained rolling stock and infrastructure, and inadequate transshipment
facilities. Furthermore, the current stock is often insufficient to handle the high volume of
trade during the peak cotton harvest season. The construction of a railway from Parakou
(Benin) to Niamey (Niger), which would allow direct rail access to the sea, has also been
proposed.
Ports
The Cotonou port, the most important one serving Niger, is considered to be less well
equipped and less efficient than some of its Western African counterparts (i.e. Abidjan or
Lomé). Niger also uses the port of Lagos, which has recently suffered from extreme
congestion as a consequence of the implementation of 100% inspection of imported cargoes.
The congestion is estimated to have led to a 35% increase in the prices of certain
manufactured goods (OTAL 2002). The Lagos port is also subject to political risks, having
been temporarily closed in 1999 due to surrounding violence.
In contrast, the third major port for Nigerien transit trade, Lomé, is scheduled to become a
hub for central and western Africa with the new construction of a US$100m container
handling facility. The facility will provide loading and unloading for large container ships,
reducing shipping times significantly (OTAL 2002).
POLITICAL RELATIONS
Niger continues to maintain a good relations with its neighbors. Economic and trade relations
remain particularly strong with Nigeria, Niger’s most important export market. Relations
with Libya also remain strong, abetted by President Khadafi’s commitment of Libyan aid to
several development projects in Niger (CountryWatch 2002). Niger also signed an agreement
with Sudan in 1998 to increase cooperation and facilitate trade amongst the two countries.
Fortunately, the one source of ongoing confrontation, a border dispute with Benin over the
island of Lété, appears to be nearing its conclusion with both sides agreeing to hand it over to
- 66 -

the International Court of Justice for arbitration, and to abide by the ruling. Relations have
improved with Benin in other ways with several bilateral treaties including the “Accord surle
transit et l’utilization du port de Cotonou” which provides Niger with a duty-free area at
the port of Cotonou.
- 67 -

ASIA - CENTRAL
TRANSIT ROUTES OF CENTRAL ASIA
- 68 -

TRANSIT ROUTES OF MOLDOVA
- 69 -

TRANSIT ROUTES OF MONGOLIA
As part of the Soviet Union, the Central Asian republics were integrated into the centralized
Soviet command economy. Their role in this system was primarily to provide natural
resources (in particular petroleum and metals) and agricultural products (namely cotton and
grain) to the processing industries and principal markets located in today's Russia and
Ukraine. Accordingly, transport corridors developed during the Soviet era mainly connect the
individual republics with Russia and Ukraine, rather than with their neighbors. As a result of
this, the Central Asian countries face three main transit problems in the aftermath of the
collapse of the Soviet Union. First, such corridors were built well before today's international
borders were drawn. Important domestic transport arteries now often pass through
neighboring countries, which can result in long delays and additional costs. Some countries
are now building costly alternative routes to mitigate this problem. Second, connections
through China, Iran, and Afghanistan are limited and poorly developed. The consequent
dependence on Russian and Ukrainian transport links are used by Russia and Ukraine as a
political bargaining tool, seriously constraining landlocked countries' ability to increase their
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oil and gas exports. Third, the Soviet command economy’s allocation of specific economic
roles to each region led to poor diversification of exports for a number of these countries.
Ongoing regional tensions further hinder trade routes. Poorly defined borders which may not
reflect ethnic or political differences can fuel domestic and regional crises. Such tensions
have precluded any regional cooperation and have contributed to severe corruption. Problems
of international cooperation have limited the potential of this region to serve as a regional
crossroads.
Although Moldova is geographically removed from the former Soviet economies described
above, it faces similar issues. Situated between Romania and Ukraine, it is close to the Black
Sea, with its capital Chisinau only 170km from Odesa. However, its infrastructure is still
based on the former Soviet networks to Russia, to which it still exports a large portion of its
goods, so little of its trade actually uses the Ukrainian port. Furthermore, Moldova has
struggled with domestic and external tensions between ethnic Rumanians, Ukrainians and
Russians, weakening relations with both Russia and Ukraine.
Mongolia was also closely linked to the Soviet economy, and faces similar issues of
remoteness to many countries of central Asia but less of the regional ethnic and cross-border
tensions. The second-least densely populated country in our study, Mongolia has made great
progress in political reforms over the past decade, but still grapples with the fact that its
capital city, Ulaanbaatar, lies nearly 1700km from the nearest port. The country has only one
main highway, and relies mainly on rail for shipping. Railway infrastructure is in fair
condition but even problematic for trading with neighboring China, the world’s fastest
growing economy, since the two countries use different rail gauges and shipments needed to
be unloaded and reloaded at Zamyn Uud.
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AFGHANISTAN
Two decades of war, harsh geographic conditions (including
earthquakes, mountainous terrain, harsh winters, and
vulnerability to drought) and very poor infrastructure have all
exacerbated Afghanistan’s severe landlockedness, being over
1960km from the nearest port, Karachi. While the Taliban
government has been removed, warlords continue to dominate
many of the main trade routes limiting access to the country.
Afghanistan’s three potential trade corridors are northward
through Turkmenistan, Uzbekistan and Russia to the port of
Riga (Latvia), south to the port of Karachi (Pakistan), and
west to the port of Bandar-e Abbas (Iran). 27 The third of these
routes was not a significant transit corridor until after the war
in 2002, when it became important for aid cargo. The northern
corridor through the former Soviet Union takes about 3 weeks
and has declined in importance since the withdrawal of Soviet
troops from Afghanistan. The corridor through Karachi
remains Afghanistan’s principal corridor, but it has recently
suffered from stricter Pakistani transit controls (primarily on
Afghani exports) in response to illegal trafficking.
TRANSPORTATION INFRASTRUCTURE
BASIC INFORMATION
HDI Rank:
N/A
GDP per capita
2000 (PPP$): N/A
Exports per capita
2000 (current USD): N/A
Distance to port:
1960km
Transport cost ratio
(1989): 0.35
Neighbors:
Iran, Pakistan, Tajikistan,
Turkmenistan, Uzbekistan
Primary transit neighbor:
Pakistan
Main trading partners:
Imports: Pakistan (26%),
Korea (17%)
Exports: Pakistan (30%),
India (14%)
Road
Little has been done to maintain Afghanistan’s road
infrastructure since the initial American and Soviet
construction of the system in the 1960s and 1970s, that was
intended to better connect each superpower to their regional
sphere of influence. Two decades of war and neglect have all
but destroyed Afghanistan’s internal road network, with
nearly 50% of the primary network being in very poor
condition (Tahir and Dachiku 2002). Even the most essential
transport corridors have fallen into a state of complete
disrepair. The Salang Tunnel, which provides a main link
between the north and south of the country and transports
Primary Exports:
Natural Gas
Fruit, vegetables, nuts
Domestic Roads: poor
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
more than 70% of Kabul’s fuel supplies has become not only a source of inordinate
bottlenecks but also a major hazard.
Moreover, the road system was initially designed by the US and USSR to connect the major
urban centres of the country. The resulting ring-like structure of the network, with few
linking roads, provides limited access to rural communities.
none
fair
Transit Country Ports: good
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: poor
27 Through Turkmenistan, Uzbekistan and Russia.
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Since the fall of the Taliban regime in 2001, the international community has shown an
increased interest in revitalizing Afghanistan’s transport infrastructure. Emphasis has been
placed on improving the ring network and international links. The Asian Development Bank
(ADB) estimates that it will cost $650 million to repair these trunk roads. The primary donors
so far involved include the ADB, the World Bank, the United States, the EU and Saudi
Arabia.
Rail
In the late 19 th century Abdur Rehman, father of the modern Afghan state, proclaimed “as
long as Afghanistan has not arms enough to fight against any great attacking power, it would
be folly to allow railways to be laid throughout the country” (CNN 2002). He continued by
barring trains from the Afghan state. Over a century later, Afghanistan remains without a rail
system, despite several attempts. Neighboring countries’ rails, constructed during the “Great
Game” when Russia and British were rushing to lay tracks through Central Asia, terminate at
or near the Afghan border. In an attempt to take better advantage of these surrounding rail
links, the Afghan government has recently proposed a $120 million project to develop a
functional rail system.
Ports
Afghanistan depends primarily on the ports of Karachi (Pakistan) and Bandar Abbas (Iran)
for its overseas freight traffic. Bandar Abbas is primarily used for humanitarian aid imports.
It offers modern facilities and is considered to be operating relatively efficiently. The port of
Karachi is a major regional port, with 98% of Pakistan’s total foreign trade traveling. It is
being modernized with US$91.4m of assistance from the World Bank. According to a 1965
agreement, called the Afghan Trade Transit Agreement, all goods can pass through Pakistani
ports to Afghanistan duty-free. After the war in 2002, however, stricter border controls were
introduced and the agreement abandoned. It is estimated that billions of rupees worth of
goods lay at Peshawar (on the Afghan-Pakistini border) and Karachi, awaiting export and
costing Rs3000-5000 per day. Pakistan has recently begun allowing goods destined for
Afghanistan to pass duty free again.
POLITICAL RELATIONS
Marred by over two decades of internal war, Afghanistan is just beginning to emerge from
the resulting political isolation. Since the collapse of the Taliban in 2001, all three of
Afghanistan’s strategic neighbors – Iran, Pakistan and Russia – have made an effort to
establish closer links and preserve Afghanistan’s internal stability, which is vital for the
overall stability of the region. The Russian government has promised assistance to
Afghanistan in rebuilding its economy and supporting its military. Russian President
Vladimir Putin recently commented that “Russia has no other goals in Afghanistan except
one- to see an independent, prosperous, neutral, and friendly Afghanistan” (Russia Journal
2002). The past year has also witnessed unprecedented levels of cooperation between
Afghanistan and Pakistan. After the Afghan government demonstrated an increased
willingness to curb the re-export trade, Pakistan responded by reinstituting the Afghan Trade
Transit Agreement. Afghanistan’s relations with Iran have also shown dramatic signs of
improvement, symbolized by Iranian President Mohammad Khatami’s August 2002 visit to
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Afghanistan, the first by an Iranian President in 40 years. This is vast improvement since
1998, when tensions between Iran and the Taliban regime escalated after 10 Iranian
diplomats were killed.
Afghanistan is not a member of any major regional trade organizations and has not gained
admission to the WTO.
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KAZAKHSTAN
Kazakhstan relies on two main commodities for the bulk of its
export revenue: oil (49.3%) and base metals (24.4%), which
are destined for a highly diversified group of countries (EIU
2002). While infrastructure does exist to transport these goods
to market, utilising these infrastructure links is highly
politically dependent on Kazakhstan’s neighbors. Most
Kazakh oil and gas, for example, must be transported through
pipelines in either Russia or Iran, both of which compete
directly with Kazakhstan on the energy market.
A pipeline has been constructed (through Russia) to transport
oil to the Black Sea. However, the use of this route is limited
because oil tankers must pass through the narrow Bosporus,
where Turkey placed restrictions on passage as of October
2002 (DOE EIA 2002). The significance of this problem is
that an alternative route is being preliminarily investigated to
bypass the Bosporus by transporting oil through Bulgaria.
Base metals and other exports are shipped largely using the
railway system through Russia, which is ageing and suffering
from maintenance troubles. Rail transport through to China is
also limited by a required change in rail gauges at the border.
TRANSPORT INFRASTRUCTURE
Road
Although Kazakhstan’s road system is well linked with the
Russian road system, its roads are less important for transit
trade than those of most landlocked countries, as the rail
system is the primary mode of transit. Due to the
underinvestment in infrastructure in Russia and other former
Soviet states, the condition of the transit roads is relatively
poor. Some traditional services linkages with neighboring
countries have been severed in the wake of independence. For
example, as of 2000 only very few of the original bus
connections between Central Asian republics remained
(Mayhew 2002).
BASIC INFORMATION
HDI Rank: 79
GDP per capita
2000 (PPP$): $5,871
Exports per capita
2000 (current USD): $722
Distance to port:
3,750km
Transport cost ratio
(2000): 0.04
Neighbors:
Azerbaijan, China, Kyrgyzstan,
Russia, Turkmenistan,
Uzbekistan
Primary transit neighbor:
Russia
Main trading partners:
Imports: Germany (7%),
United States (5%)
Exports: Italy (11%),
China (8%)
Primary Exports:
Oil (49.3%)
Metals (24.4%)
Domestic Roads: poor
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
fair
fair
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: fair
Exacerbating the challenges of relatively poor surrounding transit roads, Kazakhstan’s
domestic roads are in poor condition. In 1996 only 10% of Kazakhstan roads could
accommodate trucks with an axle load of 10 tons or more (UNESCAP 2002). While this is
partly due to underinvestment, the Kazakh government states that difficult natural and
climatic conditions as well as a lack of suitable exits to China, India, Islamic Republic of
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Iran, Pakistan and Turkey constrain the development of domestic automobile transport. Yet,
the domestic road system is extremely important for internal transport as it accounts for 74%
of all domestic freight transport (Kazakhstan Statistics 2001).
Rail
Kazakhstan’s international transit trade depends heavily on its ageing and badly maintained
rail system. This includes 13,600km of rail lines of which 5,500km are double-track and
some 4,000km are electrified. Rolling stock and spare parts need to be imported from Russia
and Ukraine and are in short supply (EIU 2002).
The country recognizes the importance of international rail connections and has been actively
expanding its network. With the opening of the Druzhba-Alashankou and Tedjen-Serakhs-
Meshed transit routes, Beijing is now connected via Almaty to Istanbul as well as Western
Europe. This transport corridor could potentially rival the Trans-Siberian railway and
maritime routes. Rail traffic to China, however, is complicated by a difference in track gauge
standards. This requires border terminals for changing the wheels on carriages. To that end,
the Kazakh government has opened a new terminal in Druzhba in 1998 to facilitate
transshipments to China.
Pipelines
Kazakhstan still relies heavily on the pipeline system that was designed during the Soviet
Union to ship Kazakh oil from the Western part of the country to Russia and to bring
Russia’s Siberian oil to Kazakh refineries. Unfortunately, the design of this system now
requires Kazakh oil and gas exports to traverse the territory of two of Kazakhstan’s
competitors in the global energy markets, Russia and Iran.
Several efforts are underway to reduce this reliance. The first is the new Caspian Pipeline
Consortium pipeline built in 2001 to transport oil from the west of the country to the Black
Sea. The pipeline is expected to initially carry 28 million tons per year with a potential for 67
million (KIPC 2000). However, most Black Sea traffic needs to pass through the Bosporus.
This narrow waterway may impose constraints on the overall amount of oil that can be
shipped to the Mediterranean. To date it is not clear how much of a constraint the narrow
Bosporus may be on scaling up Kazakh oil production. The other effort is a proposed
pipeline to China. Turkmenistan and Kazakhstan have signed a $9 billion contract with China
to develop this pipeline (Nazar et al 1999).
Production costs in Kazakhstan’s future Caspian Sea offshore fields are likely to be as high
as $8/barrel – compared with $3/barrel in the Persian Gulf. Export pipeline fees through the
Caspian Pipeline Consortium add another $3.6/b to the cost of production 28 . It is estimated
that these fields will probably need to earn $15/b to break even (EIU 2002).
Ports/Waterways
The length of water routes in Kazakhstan is significant at around 6,000 kilometers. The Irtysh
is the main navigable river in the country, accounting for about 80% of cargo transported by
river. The Caspian is increasingly used for international shipment of dry cargo, crude oil and
28 This compares very favorably with the cost of rail transport ($7/barrel)
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oil products. Today it provides connections with Iran, Transcaucasia and, via the rivers and
canals of Russia, with the Black and Baltic seas (KIPC 2000). The latter routes can only be
used by barges.
The closest ports on the high seas are on the Russian and Georgian Black Sea coasts. Kazakh
barges can enter the Black Sea through the Volga-Don canal, but this is also a Russian
sovereign waterway.
POLITICAL RELATIONS
After having had several border disputes with other former Soviet Republics after
independence in 1991, Kazakhstan has now settled these and maintains strong relations with
its neighbors. The country has also settled its claims on the Caspian with Russia and
Azerbaijan. Kazakhstan has so far not been drawn into the looming conflict between
Azerbaijan and Iran over claims to the Caspian.
Long-serving President Nursultan Nazarbayev is keen on regional cooperation schemes as
building blocks for the promotion of free trade. However, recent initiatives such as the
Eurasian Economic Community (EEC) have so far not significantly enhanced intra-regional
trade.
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KYRGYZSTAN
Over 3600 km from the nearest open seas port, Kyrgyzstan is
the second most remote of all landlocked countries (after
Kazakhstan). Its extreme average elevation of 2,750m, with
40% of its territory over 3,000m, further exacerbates the
transit challenges it faces. Moreover, ongoing regional
instability and border disputes with neighboring China,
Uzbekistan, and Tajikistan have resulted in sporadic border
closures, and have prevented the effective implementation of
any multilateral agreements. And while it is slowly changing,
Kyrgyzstan’s transportation network is primarily the remnant
of the Soviet system, and does not reflect the changing nature
of the Kyrgyz economy and its trade patterns.
There are six international routes from Kyrgyzstan. The most
important of these are two routes to Kazakhstan and one to
Uzbekistan. Terrain and mediocre infrastructure levels,
however, limit the efficiency of these routes. Corridors to
China and Tajikistan are very difficult to traverse and are
closed in winter.
To deal with these transit trade challenges, Kyrgyzstan has
avidly pursued a democratized liberal market economy, and
boasts one of the most liberal trade regimes amongst the
former Soviet states. As of December 2002, Kyrgyzstan was
still the only CIS state to gain accession into the WTO.
Kyrgyzstan has also been relatively successful in diversifying
its economy –its newly developed gold mining sector as well
as its services sector now contribute 30% of GDP. Its
dependence on fuel imports, however, has been a significant
constraint to development.
BASIC INFORMATION
HDI Rank: 102
GDP per capita
2000 (PPP$): $2,711
Exports per capita
2000 (current USD): $117
Distance to port:
Transport cost ratio: 0.13
3,600km
Neighbors:
China, Kazakhstan, Tajikistan,
Uzbekistan
Primary transit neighbors:
Kazakhstan, Uzbekistan
Main trading partners:
Imports: Russia (18%),
Kazakhstan (18%)
Exports: Switzerland (26%),
Germany (20%)
Primary Exports:
Non-ferrous metallurgy (47%)
Electricity (16%)
Domestic Roads: poor
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
poor
fair
Transit Country Ports: good
TRANSPORTATION INFRASTRUCTURE
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: fair
Road
While the Asian Highway connects Kyrgyzstan to neighboring
Tajikistan, Uzbekistan, Kazakhstan, and China, most of these international corridors have
presented significant challenges. First, the primary road to Tajikistan is not an all weather
route, and is often rendered impassable during the harsh winter months of November-
February. Transit is further complicated by tensions with Tajikistan and Uzbekistan, and
disputed boundaries between the countries. From October-December 2002 Tajikistan erected
an ad hoc border post to harass Kyrgyz travelers. In retaliation, Kyrgyzstan set up a similar
post.
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Second, the border with Uzbekistan suffers from similar geopolitical disputes, as boundaries
are fiercely disputed. Uzbekistan also defends its border with particularly stringent border
regulations, and sometimes even physical boundaries. In one recent case, Uzbekistan is
reported to have placed cement blocks on a bridge at the Karu-Su border crossing.
Finally, transit to China has the option of passing through two routes: either the tortuous
Torugart Pass, which at 3900m presents serious physical obstacles, or the Irkeshtam crossing,
which is new and presents other difficulties. As of January 2002, the border was still closed
to vehicular traffic; freight needed to be unloaded and reloaded at the border. Such
restrictions are largely a product of Kyrgyzstan’s failure to develop adequate border
facilities, although the Chinese have already built a modern border facility.
Internal transport in Kyrgyzstan faces the same difficulties as international transport: poor
infrastructure, geographic constraints, and geopolitical difficulties. The 600 km journey
between the countries’ two main cities, Bishkek and Osh, for example, is reported to take 16
hours. Mountains divide the country into distinct north-south regions, severely limiting
transport between the two. Moreover, the presence of surrounding countries’ enclaves in
Kyrgyzstan often requires internal transport to pass through international borders subject to
the same strict control as the other borders.
Kyrgyzstan has begun road rehabilitation projects with assistance from international donor
agencies. Attempts to streamline regional border crossings have faltered as a result of
ongoing geopolitical tensions and corruption. The TIR Carnet, for example, which allows
freight to journey to its final destination (often Russia) without undergoing intermediate
customs procedures, was suspended in Russia on December 24, 2002. The suspension was
levied by the International Road Transport Union in response to Russian customs officials
who were using the system as “an effective tool for protecting organized crime.” (FT 2002)
Rail
Kyrgyzstan’s mountainous terrain makes rail transport particularly difficult. Moreover, the
rail network was constructed during the Soviet era and presents two problems: first, the
international rail corridors only provide links north through Uzbekistan and Kazakhstan to
Russia, not to China; second, the rail network is not appropriate for the current political
boundaries, as domestic transport through Kyrgyzstan now often requires passage through
parts of Uzbekistan and Kazakhstan, complicating internal transport. Both problems are
presently being addressed. Kyrgyzstan has recently reached an agreement with China to
construct a railway from Fergana (Uzbekistan) to Kashgar (China), which is linked to the
Chinese rail network. Plans for an internal north-south railway in Kyrgyzstan are also being
discussed.
Ports
Kyrgyzstan’s freight is mainly shipped from the eastern Black Sea ports. Trade also passes
through the northern Baltic Sea ports. These ports do not present any serious constraints to
Kyrgyzstan’s freight transit.
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POLITICAL RELATIONS
Generally recognized as a paradigm of internal stability, Kyrgyzstan has actively pursued
strong relations with its neighbors and regional CIS countries. It shares the closest political
ties with CIS countries and has ambassadors in all CIS capitals. Despite these attempts,
however, tensions with neighboring Uzbekistan and Tajikistan persist, stemming largely
from disputed boundaries.
Kyrgyzstan’s strained relations with Uzbekistan are complicated by the former’s dependence
on its larger neighbor for natural gas. Uzbekistan has used this dependence as a weapon to
influence Kyrgyz policy: gas supplies were cut off in 1993 when Kyrgyzstan became the first
former Soviet republic to introduce its own currency, and again in 1998 when it became the
first former Soviet Republic to gain accession into the WTO (Pannier 2001). Moreover,
Uzbekistan has ardently defended its borders with strict controls. In 2000, it even erected
fences and minefields around border areas.
Tajikistan’s civil war has further destabilized much of Kyrgyzstan’s western region and
hampered bilateral discussions to reach a border agreement. Cross-border riots and tension is
common, believed by most people to be the actions of Tajik separatists (RFE/RL 2003).
Despite its immediate border tensions, Kyrgyzstan is developing closer relations with the two
regional powers, Russia and China. In July 2000, Kyrgyz President Askar Akayev and
Russian President Vladimir Putin signed a Declaration on Eternal Friendship, Allied
Relations and Partnership between Russia and Kyrgyzstan. Kyrgyz-Sino relations have also
witnessed recent signs of improvement, including the joint venture to build a railway from
Fergana to Kashgar. In 1999, the two countries signed an agreement resolving a border
dispute.
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TAJIKISTAN
Geographically positioned at the center of three culturally and
politically distinct worlds, the Sino, Russian, and Islamic
regions, Tajikistan could potentially serve as a regional
crossroad. Instead, it has been an ongoing battleground
amongst the three surrounding regions. Such tensions are
reflected in the culturally and politically fragmented
population, which has suffered from intense civil conflict.
Further exacerbating Tajikistan’s landlocked situation, its
mountainous terrain has not only contributed to the country’s
atomization but has also severely hindered transit. Corruption
and excessive bureaucratic constraints have also adversely
affected transit costs. As Travel Tajikistan’s website warns,
while driving the international corridor roads is possible “it is
not advisable unless you have a great love of bureaucracy.”
Such geopolitical, geographical, and bureaucratic challenges
have affected each of Tajikistan’s potential transit corridors:
(1) The Uzbek corridors which carry 80% of Tajikistan’s
international traffic are all subject to arbitrary and frequent
border closures by the Uzbek government. (2) The highway to
Kyrgyzstan presents another possible route option but is
hampered by frequent violence along the border. Moreover,
this option is not particularly promising as Kyrgyzstan is also
landlocked and faces similar transport problems. (3) A
potential corridor through Afghanistan would provide the
shortest route to the sea for Tajik freight but has not been
viable because of conflict and poor infrastructure in
Afghanistan. A fourth potential transit route through China
could provide new opportunities but is currently under
construction.
TRANSPORT INFRASTRUCTURE
BASIC INFORMATION
HDI Rank: 112
GDP per capita
2000 (PPP$): $1,152
Exports per capita
2000 (current USD): $130
Distance to port:
Transport cost ratio:
3,100km
NA
Neighbors:
China, Kazakhstan, Tajikistan,
Uzbekistan
Primary transit neighbors:
Kazakhstan, Uzbekistan
Main trading partners:
Imports: Uzbekistan (22%)
Russia (18%)
Exports: Netherlands (30%)
Russia (16%)
Primary Exports (2001):
Aluminium (61%)
Electricity (12%)
Domestic Roads: fair
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
fair
poor
Transit Country Ports: good
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: poor
Road
Given its rugged natural terrain, Tajikistan is more dependent on road transport (82% of total
freight in 1997 (ADB 2000)) than most other former Soviet states. The declining importance
of trade with Russia will shift even more freight transport to the road system. And while
Tajikistan’s road network, constructed under the Soviet Union, is extensive and relatively
well developed it suffers from the harsh geographic conditions. Roads are regularly closed
due to snow, mudslides, landslides and floods. As one indication of the severity of these
issues, it is estimated that from 1992 to 1999, natural disasters and civil war destroyed 10%
of Tajikistan’s roads (Interfax 2003).
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The country’s two major highways, from Dushanbe to Aini and Kalaikhum to Khorog, are
normally closed for five to six months each winter. In order to access this province during the
winter, freight must be routed through Uzbekistan, which presents the problem of border
closures. The Uzbek government has been described as using Tajikistan’s dependence on
Uzbek roads for political leverage. Many though this was the case when, after opening the
Tajik transit roads in early 2000, the Uzbek government closed them again in December of
that year and cited independence anniversary preparations as the reason.
Tajikistan has also suffered from its lack of a road corridor linking to the Chinese road
network. Despite facing severely constrained budgets, Tajikistan has begun constructing a
road link to China and the Karakorum Highway, as well as a tunnel that will directly link the
northern and southern parts of the country. As of 2001 this road had not been completed.
Rail
Not only is Tajikistan’s rail network limited by its mountainous terrain, but the design of the
Soviet transport system has also been largely inappropriate for the emerging trade patterns
among new republics. The remnants of the Soviet network are in fairly good condition, but
remain concentrated in western Tajikistan. The rail system thus lacks links to emerging trade
corridors, especially China, while traditional links to Russia now require administratively
burdensome passage through at least two other countries.
For transit trade, the three primary rail lines are: (1) crossing the northern Fargana Valley
from Andijan (Uzbekistan) through Khojand (Tajikistan) to Samarkand (Uzebkistan); (2)
passing south from Dushanbe through Uzbekistan to Termiz at the Afghan border; and (3)
directly south from Dushanbe to Tugul on the Aghan border. Afghanistan’s lack of railways
and Uzbekistan’s aforementioned restrictions have hampered all three of these corridors.
Ports
Tajikistan uses the Baltic Sea ports (primarily Riga), Russian ports (e.g., Novorossiysk) and
European ports including Bremerhaven (Germany). These ports do not pose any significant
constraints to Tajikistan’s trade flows.
POLITICAL RELATIONS
Ethnically and culturally diverse, Tajikistan has suffered extensively from both internal
conflict and tensions with its neighbors. Comprised largely of Russian, Uzbek, and Islamic
ethnic groups, Tajikistan has witnessed extensive external involvement in its internal affairs
as each of the surrounding regions has attempted to exert the greatest influence: Russia,
seeking to protect its ethnic minority, is described as having actively involved itself in
Tajikistan’s internal affairs. Uzbekistan is said to have done likewise. As the Federation of
American Scientists describes the situation, “neither state [Uzbekistan or Russia] has
behaved as if it considered Tajikistan a genuinely sovereign and independent country.”
Such underlying ethnic and political tensions manifest themselves in Tajikistan’s bloody civil
war, which began in 1992. The war split the countries and its neighbors along religious and
ideological lines (Islamic and Communist), and is considered one of the bloodiest wars to
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have taken place amongst the post Soviet Republics. It also resulted in the closure of some of
Tajikistan’s borders as neighboring countries attempted to prevent the spread of war and
inflow of refugees. While a peace agreement was signed in 1997, sporadic violence persists.
In addition to such ethnic tensions, Tajikistan has been adversely affected by the weak
delineation of borders in Soviet times. These have led to a high degree of tension with
Uzbekistan and Kyrgyzstan. Much of this tension has centred on the Ferghana Valley, where
all three countries dispute state boundaries (IRIN 2002, UNFVDP 2002). There have been a
number of riots in the area, largely on the Kyrgyz-Tajik border (EurasiaNet 2003). While
Uzbekistan and Tajikistan have reached agreement on 86% of their common boundary,
further demarcation has been highly problematic (ICG 2002).
Such heightened tension with Uzbekistan has been of particular concern for Tajikistan, which
depends heavily on Uzbekistan for transport. Moreover, concerns of Islamic guerilla groups
operating from Tajikistan into Uzbekistan has led the Uzbek government to place landmines
on the border (Turaev 2002). In fact, the border between the two countries is regularly closed
by the Uzbek government (Travel Tajikistan 2002).
Relations with Russia, a vital trading partner, have generally been close but have become
more complicated due to Tajikistan’s allowance of overfly rights for US aircraft involved in
Afghanistan and the large number of illegal Tajik migrants in Russia. The latter have led to a
large number of Tajik citizens being deported from Russia (EurasiaNet 2003).
Tajikistan’s relations with its other neighbors have been fair and improving. Since 1992,
Tajikistan has maintained friendly and strengthening relations with Iran, one of the first
countries to open diplomatic relations with Tajikistan and helped mediate the 1997 domestic
peace agreement. Sino-Tajik relations have also witnessed recent improvements with the
2002 settlement of a border dispute. The Chinese corridor could potentially become
Tajikistan’s most important transit trade route (Najibullah 1997). Finally, the stability of
Afghanistan will likely lead to stronger bilateral relations and a more reliable transit corridor.
Despite these bilateral successes, regional security and trade agreements have had little
success in fostering the promotion of intra-regional cooperation and remain largely
ineffective.
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TURKMENISTAN
With direct access to the Caspian Sea, Turkmenistan is not as
geographically isolated as the other landlocked countries of
the central Asia. It has also benefited from its significant oil
and gas reserves and an extensive transport system that
surpasses those of its regional landlocked neighbors in both
quantity and quality. However, like the other former Soviet
states, Turkmenistan suffers from having a large majority of
its transport corridors directed toward Russia. To address this
constraint, the government has made a serious commitment to
developing other corridors. A rail link to Iran, for example,
was opened in 1996.
Interestingly, Turkmenistan’s relative political isolation due to
its autocratic regime has been beneficial, since it has limited
the influence of surrounding conflicts. Unlike many other
central Asian landlocked countries, Turkmenistan has not
suffered from a civil war. Poor international relations with
Uzbekistan, however, have not only limited transport to
Russia but also hindered domestic routes in the north of the
country, which require passage through Uzbekistan.
Despite Turkmenistan’s relatively well-maintained domestic
infrastructure and political stability, it faces both political and
infrastructural challenges on its primary corridors. These
include: (1) restrictive bureaucratic procedures on rail and
road routes through Uzbekistan to Kazakhstan and Russia; (2)
poorly developed and weather dependent road routes directly
through Kazakhstan; (3) underinvestment in the port of
Turkmenbashi; (4) poor infrastructure in Azerbaijan and
Georgia on the corridor through the Caspian Sea; and, (4) low
infrastructure levels on routes through Iran.
TRANSPORT INFRASTRUCTURE
Roads
While Turkmenistan’s domestic road system is extensive and
BASIC INFORMATION
HDI Rank: 87
GDP per capita
2000 (PPP$): $3,956
Exports per capita
2000 (current USD): $533
Distance to port:
1,700km
Transport cost ratio
(1997): 0.15
Neighbors:
Afghanistan, Azerbaijan, Iran,
Kazakhstan, Uzbekistan
Primary transit neighbors:
Azerbaijan, Kazakhstan,
Uzbekistan
Main trading partners:
Imports: United States (18%),
Ukraine (15%)
Exports: Iran (20%),
Ukraine (15%)
Primary Exports (2001):
Gas (57%)
Oil & Refined products (26%)
Domestic Roads: good
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
relatively well-developed, with over 82% of its roads paved (compared to 57% for
neighboring Kazakhstan), it has suffered from the inappropriate positioning of the network
during Soviet times. As with several of its Central Asian neighbors, key roads were built at
times when no international borders existed in the area. As a result the main road connecting
the north of the country with the East crosses through Uzbekistan. Similarly, important
transport arteries to the East of the country pass through Uzbekistan. This imposes significant
extra costs and visa requirements on all transit traffic (Mayhew 2002). In an effort to
poor
poor
Transit Country Ports: good
Neighboring Civil Conflict:
moderate
Relations w/ Neighbors: fair
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overcome this problem, the government has launched a major highway construction project
to link the capital Ashgabat with the Caspian Sea and Dashoguz in the north of the country
(EIU 2002).
As discussed above Turkmenistan’s road transit challenges are exacerbated by its neighbors’
low infrastructure levels. Weak infrastructure has so far limited development of the Iranian
corridor, and severely limited the efficiency on transit through Azerbaijan and Georgia.
Rail
Turkmenistan inherited its limited and insufficient railroad system from the Soviet Union.
With less than 2,500 km of poorly maintained railway track and a minimal supply of rolling
stock and spare parts, the country faces serious constraints in this sector. Moreover, the
break-up of the Soviet rail network in 1991 has left Turkmenistan with a fragmented
network. There are no main rail lines connecting the east or northwest with the rest of the
country. To deal with these issues the government is constructing new rail lines to improve
domestic transport. The government has also actively promoted new rail corridors to link
with surrounding rail systems. In 1996, Turkmenistan opened its first connection to Iran. See
the rail section in the Uzbekistan chapter for a description of the major corridors and
indicative pricing.
Pipelines
Turkmenistan’s key problem in exporting its gas is its reliance on Russian and former Soviet
gas pipelines. To access world markets, gas must either pass through pipeline routes through
Russia, Iran or the Caucasus, each of which is constrained.
The route via Russia is limited because Russia will not pay its debt accumulated in
purchasing Turkmen gas. Hence, Turkmenistan has found it necessary to suspend the gas
flow four times since 1991. 29 In addition, Russia’s gas distributor, Gazprom, refuses to allow
Turkmen gas to transit to Europe, limiting Turkmenistan’s prospects for exporting gas
outside the CIS.
While a pipeline to Iran exists and is used for export, these shipments have consistently fallen
below the target and hence only account for a small share of total gas exports. The pipeline
has had various problems, culminating in March 2002 when exports via this pipeline
temporarily ground to a halt (Lelyveld 2002).
Since independence, the government has been pursuing the construction of a pipeline through
Afghanistan to Pakistan, which would give it access to deep-sea ports and possibly the Indian
market. A construction agreement was signed in December 2002. However, it remains
unclear whether the project will be able to attract the necessary investments. Key concerns
include political volatility in Afghanistan and the low throughput of the planned pipeline,
which may make the project economically unsustainable. Similarly, Turkmenistan and
Kazakhstan have signed a $9 billion contract with China to develop a pipeline to ship oil and
natural gas to China (Nazar et al 1999).
29 Total arrears in gas bills accumulated by Russia and Ukraine are equivalent to 75% of Turkmenistan’s GDP
(EIU 2002).
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Ports and Waterways
Turkmenistan has direct access to the Caspian Sea via its port at Turkmenbashi, which
requires significant investment before it can be used as a major transit hub. The Caspian Sea
then allows access to two main transit routes. The most common route is the land route
through Azerbaijan and Georgia, using the ports of Baku (Azerbaijan) and Bat’umi
(Georgia). An alternative route is via the Volga-Don canal, which is capacity limited and is
Russian sovereign territory. It is unclear the extent to which Turkmenistan uses this route.
POLITICAL RELATIONS
Under the totalitarian government of Saparmurad Niyazov, Turkmenistan has pursued an
official policy of neutrality, and limited its relationship with neighboring countries to a point
of isolation. While Turkmenistan is ethnically fragmented like the other former Soviet
republics, it has not engaged in civil war and has not been involved in the region’s geo-ethnic
positioning. Rather, the country’s foreign policy focuses on the need to secure export routes
and markets for its oil and gas exports. The most important of these routes is via Russia, and
the most important market, Ukraine. Relations with Russia have typically been cordial, but
have been increasingly unstable as the Russian state-owned firm, Gazprom, has restricted
Turkmenistan’s exports to Europe. Ukraine, however, has publicly mentioned the possibility
of re-exporting Turkmen gas to Europe.
Turkmenistan has also recently witnessed deteriorating relations with Uzbekistan.
Competition on the gas market, domestic tensions with the Uzbek minority, and the recent
expulsion of the Uzbek ambassador to Turkmenistan on accusations of participating in a plot
to assassinate the president, have all hampered relations. A long running dispute over
property rights on the Caspian Sea has also weakened Turkmenistan’s relationships with
some of its neighbors, most notably Azerbaijan.
In contrast, relationships with Iran and the new government in Kabul are fair. Turkmenistan
has recently signed an agreement with Afghanistan and Pakistan to build a 1,500km-long gas
pipeline through both countries.
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UZBEKISTAN
As the only doubly landlocked country in our study, 30
Uzbekistan faces the unique challenge of having to transit
another landlocked country to access the high seas.
Uzbekistan’s neighbors not only are landlocked, but also
suffer from severe political tensions and internal conflicts, as
well as poor infrastructure. Moreover, domestic conditions
have done little to mitigate such obstacles and have actually
worsened the situation. Civil conflict between the Uzbek
government and the Islamic Movement of Uzbekistan (IMU)
continue to threaten the nation’s stability. The government
also interferes heavily in the economy refusing to remove
selective currency exchange restrictions and on occasion
shutting down cross-border traffic. Corruption also continues
to be a major problem for Uzbekistan.
Although Uzbekistan’s transport system, like those of the
other CIS countries, is centered on corridors to Russia, it is
one of the most extensive systems of the CIS countries and
provides major links to all five of Uzbekistan’s neighbors.
Each of these links, however, presents significant challenges:
the corridor through Afghanistan has been rendered virtually
impassable by the past civil wars, and suffers from severely
dilapidated infrastructure; tensions with Tajikistan have led
the Uzbek government to plant landmines across the border
and strictly limit access; the Kyrgyz corridor is hindered by an
ongoing border conflict between the two countries; the
Turkmen corridor is hampered by increasingly poor relations
between Uzbekistan and Turkmenistan, which are considered
to be at an all time low; and, finally, the routes passing
through Kazakhstan are constrained by the ongoing struggle
for regional power between Kazakhstan and Uzbekistan.
None of these Kazakh routes are all-weather.
TRANSPORT INFRASTRUCTURE
BASIC INFORMATION
HDI Rank: 95
GDP per capita
2000 (PPP$): $2,441
Exports per capita
2000 (current USD): $137
Distance to port:
Transport cost ratio:
2,950km
NA
Neighbors:
Afghanistan, Kazakhstan,
Kyrgyzstan, Tajikistan,
Turkmenistan
Primary transit neighbors:
Kazakhstan, Turkmenistan
Main trading partners:
Imports: Russia (12%),
Korea (12%)
Exports: Russia (17%),
Ukraine (6%)
Primary Exports (2001):
Cotton fibre (28%)
Energy (12%)
Domestic Roads: fair
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
fair
fair
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: poor
Roads
Uzbekistan has one of the most extensive road networks of the former Soviet republics,
connecting it to the road systems of all of its neighbors. However, many of these domestic
corridor roads have fallen into a state of disrepair. In response, the Uzbek government has
given priority to improving its international corridor links. Several are now in the process of
the being upgraded to international standards.
30 Liechtenstein is the only other doubly landlocked country.
- 87 -

Domestic transport is hampered by the now anachronistic Soviet road network. The
independence of the republics now requires several major domestic roads to pass through
neighboring countries’ territory. 31 Due to complex and time-consuming border procedures,
trade within the country is significantly hampered. In particular Turkmenistan charges high
transit fees on a number of commodities passing through its territory and continues to require
special transit visas for each trip (Mayhew 2002).
Rail
As in most of the former Soviet republics, Tajikistan being a leading exception, railways play
the dominant role in Uzbekistan’s international freight traffic, accounting for 86% of all
import/export cargo compared to 14% for air and road. Its primary rail corridors pass through
Russia, Ukraine, the Baltic States, and then onward through eastern Europe. These routes are
plagued not only by political challenges, but also extreme distances. Poor maintenance and
limited rolling stock further hamper the rail system.
The following table summarizes the costs and duration of rail transit of cotton for several of
the main corridors:
Port Country Distance Duration Cost Cost/ton per
(km) (days) (/t cotton) 1000km
Riga Latvia 3929 20-23 84.82 21.59
Ilichebvsk Ukraine 4312 25-26 98.90 22.94
Nakhodka Russia (Sea of Japan) 8622 45-50 156.29 18.13
Brest
Belarus (border Poland, 4179 21-23 74.25 17.77
via road)
Lyanyunganang China (Yellow Sea) 5991 20-25 215.49 35.97
Farob-Poti Georgia (Black Sea) 2025 10-15 75.32 37.20
Source: (US Embassy Tashkent 2001)
Rates for Georgian ports are given with 50% discounts based on 1996 agreement. Rate for Lyanyunganang given
with 30% liability mark-up
Uzbekistan’s domestic rail system is hampered by the inopportune border delineations
discussed above. A number of domestic connections (i.e. Bukhara to Urgench to Nukus)
currently pass through Turkmenistan. And since Turkmenistan has not signed the 72 hour
transit agreement, all train passengers must acquire a transit visa for Turkmenistan or risk
fines (Mayhew et al. 2000). To address this problem, Uzbekistan is now building a new train
line bypassing Turkmenistan.
Pipelines
While Uzbekistan exports natural gas to both Kyrgyzstan and Tajikistan, its gas is exported
mainly to Ukraine via Kazakh pipelines. Like most of the Central Asian republics,
Kazakhstan is not able to sell oil through to Europe due to Russian restrictions.
Ports/Waterways
Uzbekistan uses the Baltic Sea ports (primarily Riga), Russian ports (e.g., Novorossiysk),
European ports including Bremerhaven (Germany), and more recently the ports of Poti
31 The principal road connecting Nukus in the east with the rest of the country passes twice through
Turkmenistan. Similarly, The main eastbound road to the Fergana Valley crosses through Tajikistan.
- 88 -

(Georgria) and Lianyungang. The only of these ports that has posed a constraint to
Uzbekistan’s trade is that of Poti. As outlined in the Armenian case study, the port of Potu
was severely damaged during Georgia’s civil war in the 1990s.
Uzbekistan has an internal port at Termiz on the Amu Darya Riverat the Afghan border. The
river constitutes an important waterway to the Caspian, but its passage through Turkmenistan
requires payments in scarcely available hard-currency.
POLITICAL RELATIONS
Uzbekistan’s foreign policy has been characterized by an unusual mix of aspirations for
regional influence, and tendencies toward isolation. This combination of policies is seen to
be one of the main factors contributing to the failure of regional integration, as Uzbekistan is
the only country that borders the other four central Asian countries.
Recently, for example, the Uzbek government was accused by Turkmenistan of aiding the
attempted assassination of the Turkmen president. Relations have consequently weakened to
what is considered an all-time low. As a CIS analyst notes, ‘“The issues between
Turkmenistan and Uzbekistan right now are a little ill-defined and have led to increased
security measures on the borders, an increased number of checkpoints” (Pannier 2003). Such
increased border controls have a direct effect on international transport costs, and further
weaken Uzbekistan’s position as a landlocked country.
Relations with Kazakhstan and Kyrgyzstan have also been recently strained over issues of
water resources, gas debts, and border delineations. Moreover, Kazakhstan is seen to be
vying for regional influence and thus competing with Uzbekistan. As a result of these
increased tensions, the Uzbek government has closed its borders with both countries (Pannier
2003).
Internal strife between the government and the Islamic Movement of Uzbekistan,
surrounding civil wars, and bitter relationships with all of its neighbors have severely
crippled Uzbekistan’s transport system. The Islamic movement in Uzbekistan, while not as
conspicuously violent as that in Tajikistan, remains a threat to domestic stability and is a
serious concern of the Uzbek government. The ongoing tension has also weakened
Uzbekistan’s relations with neighboring Tajikistan. As a result, these corridors have been of
limited use and will require significant restructuring before they can play a major role in
Uzbek transit. In contrast, relations with Russia, Uzbekistan’s most important trading partner,
have been recently improving as a result of the continued cooperation between the countries
in the fight against such Islamist extremism.
- 89 -

MOLDOVA
Although the former Soviet Republic country of Moldova is
only 50km from the Black Sea - the shortest distance of all
landlocked countries in our study - and has relatively wealthy
neighbors, it remains the poorest country in Europe, suffering
acutely from its landlocked status. Located between Romania
and Ukraine, Moldova has become the centre of a
geopolitical tug of war between these countries. With the
eastern part of the country controlled by ethnic Russians and
Ukrainians, and the west by ethnic Rumanians, Moldova
itself is a bitterly divided country suffering from the ongoing
civil war over the separatist Transdniestr region in the east.
The current situation has profoundly affected Moldovan
trade, further limiting its potential transit corridors. Trade
through Romania is limited because of minimal connecting
infrastructure. Moldova’s eastward orientated infrastructure
still reflects its former position in the Soviet command
economy. Trade through Ukraine is limited because of the
ongoing civil war in the separatist Transdniestr region.
TRANSPORT INFRASTRUCTURE
Roads
As part of the former Soviet Union, Moldova was deeply
integrated into its centrally-planned economy. With little
development after independence, Moldova’s road network
reflects its former role: road connections between Chisinau
and the Ukraine (in particular Kiev, Odessa and Western
Ukraine) are reasonably extensive. In contrast, there is only
one major road that crosses into neighboring Romania. As a
result, road-based exports to Western Europe generally pass
via Ukraine and Poland.
BASIC INFORMATION
HDI Rank: 105
GDP per capita
2000 (PPP$): $2,109
Exports per capita
2000 (current USD): $150
Distance to port:
170km
Transport cost ratio
(2000): 0.10
Neighbors:
Romania, Ukraine
Primary transit countries:
Romania, Ukraine
Main trading partners (2001):
Imports: Romania (17%)
Ukraine (14%)
Exports: Russia (45%)
Romania (8.2%)
Primary Exports:
Food, beverages & tobacco (42%)
Domestic Roads: poor
Transit Country Roads: good
Domestic Rails:
Transit Country Rails:
poor
good
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: fair
In addition to such design limitations, Moldova’s road network has suffered from a decade of
neglect, leaving it in a severely dilapidated condition, with significantly worse roads than its
neighbors’. Only four years after independence, Moldova’s road network had already
deteriorated to a state where 20% of the roads were considered to be in a critical technical
condition. Paralleling this rapid deterioration, the amount of transported goods fell by 31
percent from 1993-4 (Library of Congress 1995).
The road system has been further hampered by the Transdniestr conflict, which has led to the
closure of the main road linking Chisinau with Kiev. Consequentially, all road traffic must
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now make a significant detour via Tiraspol on small and poorly-maintained roads (Williams
and Wildman 2001).
Rail
Moldova’s rail network includes 1,140 km of tracks and forms the principal means of
transporting cargo, accounting for 95% of transborder shipments (US Embassy Chisinau
2001). Like the road network, the rail network suffers from dilapidated infrastructure, the
Transdniestr conflict and design challenges due to its former role in the Soviet economy.
Links with Romania are made difficult by the fact that the Moldovan railway network uses
the wider Soviet gauge standard, implying that every carriage needs to be transferred onto a
different rolling stock – a costly procedure that can take several days for cargo trains.
Moreover, reflecting the geopolitical tensions of the regions, Russia has occasionally wielded
its power by threatening to blockade Moldova’s rail system (Economist 2000).
Ports/Waterways
Since Moldova’s primary trading partners are still Russia and the countries of the former
CIS, which account for over 50% of total exports, coastal ports play a somewhat limited role
in trade. With the recent development of inland waterways, including the construction of
facilities at Giurgioulesti on the Danube, however, the importance of the Romanian ports will
increase significantly. One of the main purposes of constructions along the river is to
facilitate oil import from non-CIS countries to reduce Moldova’s dependence on Russian
primary energy sources.
POLITICAL RELATIONS
The geopolitical tensions that have marked Moldova’s short history have had severe effects
on its trade costs. Initially belonging to Romania in the 19 th and early 20 th centuries, and then
the USSR as of 1940, Moldova did not gain its independence until 1991. Shortly thereafter,
bitter ethnic tensions erupted into civil war in 1992, with the Russian and Ukrainian
ethnically dominated Transdniestr region declaring its independence. The civil war had a
polarizing effect on Moldova’s neighbors, with the Russian army supplying arms to the
Transdniestr separatists while Romania provided military support for Moldova. While a
cease-fire was negotiated in 1992, tensions persist and have weakened Moldova’s relations
with both Russia and Ukraine.
- 91 -

MONGOLIA
As the landlocked country with the largest area and lowest
population density 32 , Mongolian trade is significantly hindered
by the distances required to travel within the country. This
problem is exacerbated by the lack of good infrastructure:
Mongolia has only one significant highway and the state of
most roads are poor.
While nearly half of Mongolia’s exports go to China, an
overwhelming portion of the other half go overseas to the
United States. For these exports, transit routes through Russia
(to St Petersburg, Vladivostok, Nakhoda or Vostochny) and
China (to Tianjin) are used and are almost without exception
by rail. Transit infrastructure levels are reasonable although a
diversification of modes to facilitate competition between road
and rail would be advantageous. Mongolia’s relations with
Russia and China are reasonably good and improving.
BASIC INFORMATION
HDI Rank: 113
GDP per capita
2000 (PPP$): $1,783
Exports per capita
2000 (current USD): $265
Distance to port:
1,693km
Transport cost ratio
(1999): 0.16
Neighbors:
China, Russia
Primary transit countries:
China, Russia
TRANSPORT INFRASTRUCTURE
Road
While Mongolia has significant road coverage on an absolute
scale, the development of the road network is limited relative
to the needs of the country. Roads are largely unpaved and of
poor quality (Canning 1998), leading to the dual problems of
long transport times and the significant damage to goods. 33 On
the positive side, the government is making efforts to upgrade
roads, largely through external aid. A total of $US250m in
development assistance was committed to improving transport
infrastructure between 1990-99 (Stone 2001). Construction of
an east-west arterial road began in 2001.
Although roads are not used for transit through China nor
Russia, there is potential for a road route through to Tianjin
(China). Currently the main obstacle to using such a road
Main trading partners (2001):
Imports: Russia (35%),
China (20%),
Exports: China (48%),
US (31%)
Primary Exports:
Copper, gold, cashmere
Domestic Roads: poor
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
route is due to regulatory barriers: Mongolian, Russian and Chinese trucks have not been
able to operate within each other’s territory (United Nations General Assembly 2000). Such
regulations, however, are showing signs of easing: a protocol was signed with Russia to
enable the transport of passengers by road in either territory without taxes or fees (UNCTAD
1999a). Negotiations are currently underway to allow the right of transit for Mongolian,
fair
fair
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: good
32 Mongolia has a land area of 1,566,500 sq km and population density of 1.5 persons/sq km. Botswana is the
second most sparsely populated with 2.7 persons/km 2 (WDI 2002)
33 Drivers also suffer from limited supplies of fuel (EIU 2001).
- 92 -

Russian and Chinese trucks, and the obligation to provide transit facilities (UNCTAD
2002a).
Rail
The Ulaanbaatar Railway is Mongolia’s primary transportation infrastructure, linking freight
and passengers with Russia and China. It serves the three largest industrial areas of
Mongolia: Ulaanbaatar, Darkhan and Erdenet. There is little competition to the rail network
from the road network.
The three principal rail transit routes are via China to Tianjin (Xingang),via Russia to
Vladivostok, Nakhoda or Vostochny, and via Russia to St Petersburg. Rail cargo to and from
Russia and Europe is transported via a broad-gauge line with no interruption. Cargo to and
from China however must be transshipped at Zamyn Uud because of two different rail
gauges. Slow transshipment during peak harvest period in China is reported to remain a
major concern to Mongolia (UNCTAD 1999a).
POLITICAL RELATIONS
Mongolia has a free trade regime, with no quotas or onerous licensing requirements (USCS
2001). China is Mongolia’s largest trade partner (IMF DOTS 2002) and the largest foreign
investor (CountryWatch 2002). Relations with China had been mixed prior to 1989, with a
general improvement since then to the point where President Bagabandi was the first
Mongolian head of state to visit China. Mongolia’s relationship with Russia has also been
improving since the early 1990s and the Soviet troop withdrawal in September 1992. The
two countries have signed a number of treaties on trade, security and stability, including a
transit agreement allowing tax-free and fee-free transit.
- 93 -

CAUCASUS
TRANSIT ROUTES OF THE CAUCASUS
The location of the Caucasus landlocked countries, Armenia and Azerbaijan, at the bridge of
the traditional east-west Silk Route connecting East Asia to Europe, holds large potential
benefits for both countries. The planned revival of the Silk Route as a network of major
transport corridors could potentially help these countries become vital transit links between
East and West. Yet, in their current state, both Armenia and Azerbaijan suffer extensively as
landlocked countries. Regional tensions, including boundary disputes over the Caspian Sea,
ethnic disputes and steadfast Russian alliances have hindered any serious attempts at regional
integration. In fact, such disputes have resulted in the closure of both the Armenia-
Azerbaijan and Armenia-Turkey border.
Armenia and Azerbaijan have also suffered from surrounding civil conflicts that have limited
the use of potential corridors. The Georgian civil war began in 1992, hindering the use of the
Georgian corridor and resulting in severely dilapidated infrastructure on the route. Similarly,
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the Chechen war has limited trade to the north and weakened Azerbaijan’s relations with
Russia.
Reflecting the weak political institutions of the region, corruption is widespread and has
become a serious concern for Armenia and Azerbaijan. Having to transport their trade across
international borders, where bribe paying is particularly persistent, these landlocked
economies suffer hugely from both internal corruption and from the corruption of their
neighbors. Such institutional issues will need to be addressed immediately if the landlocked
countries hope to play a substantial role in the revival of the Silk Route.
Further complicating the situation, the ongoing ethno-politic conflicts and political instability
of the region have left the transport infrastructure in a severe state of dilapidation. The
European Bank for Reconstruction and Development estimated that nearly 40% of Armenian
roads were in need of immediate repair in 1998, while 56% of Azerbaijan’s main road
network has been described as being in a poor state of repair. The infrastructure of
neighboring Georgia infrastructure is in even worse condition. Significant investment will be
required to restore the regional transit system.
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ARMENIA
While Armenia’s central geographic position in the Caucasus
potentially allows it to serve as a regional crossroad like it did
prior to independence in 1991, this has not been possible over
the last decade due to conflicts with neighbors Turkey and
Azerbaijan and severely deteriorated infrastructure. Such
challenges have contributed to Armenia’s high transport costs,
which are significantly greater than those of most former
Soviet Union republics. One estimate of these costs,
calculated by the World Bank, suggests that if Armenia’s
average freight factor was that of the EU - 8 times less than
Armenia’s - it could save approximately US$100 million per
year. 34
The trade costs of conflict have been severe. Armenia’s
traditional trade route through Azerbaijan, which accounted
for over 85% of Armenian trade flows, was blockaded in 1991
as a result of the conflict over Nagoro-Karabakh. Shortly
thereafter the Turkish border was also closed to transport.
With transit corridors undeveloped to the south, Armenia was
forced to reroute nearly all of its trade through Georgia. This
too presented problems for Armenia when a ravaging civil war
broke out in Georgia. A recently developed corridor to Iran
has been witnessing an increased trade flow.
TRANSPORTATION INFRASTRUCTURE
Road
With the closure of the Azerbaijan rail corridor, most of
Armenia’s freight transit traffic has been rerouted to the road
corridor from Yerevan to Georgia. This increasing
dependence on the road network has been accompanied by
significant deterioration in the infrastructure, resulting from
years of neglect following independence. A 1998 European
Bank for Reconstruction and Development study estimated
that nearly 40% of Armenian roads were in need of immediate
BASIC INFORMATION
HDI Rank: 76
GDP per capita
2000 (PPP$): $2,559
Exports per capita
2000 (current USD): $118
Distance to port:
693km
Transport cost ratio
(1999): 0.29
Neighbors:
Azerbaijan, Georgia, Iran,
Turkey
Primary transit neighbor:
Georgia
Main trading partners (2001):
Imports: United States (16%)
Russia (11%)
Exports: Russia (20%)
United Kingdom (10%)
Primary Exports (2001):
Precious stones & metals (36%)
Prepared foodstuffs (14%)
Domestic Roads: poor
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
repair. Many of these roads are considered to be so dilapidated that rehabilitation will soon
no longer be possible. The lack of upkeep has been aggravated by the country’s harsh
winters, extreme altitudes, and susceptibility to earthquakes such as the one that devastated
the country in 1988. In an attempt to address the deteriorated condition of the domestic road
system, Armenia initiated a US$16 million Highway Project and more recently, in 2000, a
US$40 million Transport Sector Project, both with assistance from the World Bank.
poor
poor
Transit Country Ports: poor
Neighboring Civil Conflict:
high
Relations w/ Neighbors: poor
34 The ratio of freight costs to merchandise value.
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Rail
Prior to its collapse, the Soviet Union depended heavily on its extensive railway network for
internal movement of raw materials. As part of this network, the Armenian railway played a
significant role as a central transport corridor in the Caucasus. Since the fall of the Soviet
Union, however, rail traffic has declined significantly. Freight traffic in Armenia is estimated
to be only 5% of the level prior to independence (World Bank 2000). The closure of the
Turkish and Azerbaijani borders, the dissolution of the Soviet command economy, and the
dilapidated state of the rail infrastructure have all contributed to this decline. As of 2000,
only 350 km out of 796 km (44%) of Armenian railways were in operation. This has
contributed to the high cost of Armenia’s rail transport, as has the poor state of Georgia’s
connecting railway and the monopolistic nature of Armenia Railways.
The launch of the European Union Transport Corridor Europe Caucasus Asia (TRACECA)
program, intended to better integrate Europe, the Caucasus, and Asia through the
development of an interconnected transport network, would place Armenia at the center of
the inter-continental traffic route. Process has been delayed, however, since the governments
of Azerbaijan and Turkey refuse to cooperate with Armenia.
Ports
With the closure of the Azerbaijan and Turkey corridors, Armenia has relied exclusively on
the ports of Georgia and Iran. Georgia’s primary port, Poti, was established in 1858 and is
considered to be outdated. The port’s infrastructure was damaged in Georgia’s two civil wars
in the mid 1990s. It has traditionally been used to transport cargo in bulk and will require
significant improvements if it is to serve as one of the principle ports along the TRACECA
route. Recent efforts have been made to improve the efficiency and increase the overall
capacity of the port.
The primary Iranian port for Armenian freight traffic has been Bandar Abbas, which is now
Iran’s major port and handles over 75% of Iran’s total port cargo. Bandar Abbas offers
modern facilities and is considered to be operating relatively efficiently.
POLITICAL RELATIONS
The challenges Armenia faces as a landlocked nation have been severely aggravated by its
conflict with neighboring Azerbaijan, which has resulted in the closure of not only the
Azerbaijan-Armenia border but also the Turkey-Armenia border. Dating back to the 1920s,
the conflict originated in a debated boundary demarcation by the Soviet Union. It was not
until the late 1980s that the conflict exploded into a full scale military conflict with the
resulting border closure. The ongoing conflict, which continues to dominate Armenia’s
geopolitical relations, has at its root the disputed Nagorny Karabakh territory. The conflict
has resulted in severed relations with not only Azerbaijan, but also Turkey, which supports
Azerbaijan and continues to maintain an effective blockade against Armenian trade. With
continuing pressure from the United States and Europe, however, Turkey has begun to ease
restrictions on Armenia as relations begin to thaw.
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With the closure of the Turkish and Azerbaijani borders, Armenia has become increasingly
dependent on Georgia and Iran. Armenia’s relations with Iran are warm, and have witnessed
increased efforts by both governments to further political relations in order to facilitate the
nations’ increasing economic interdependence. Relations with Georgia have also seen recent
improvements, deriving largely from an increasing economic interdependence. Tensions
between Armenia and Georgia, however, still exist, stemming largely from Georgia’s
increasing alliance with the West and political distance from Russia, its cooperation with
Azerbaijan and Turkey in the construction of the Baku-Ceyhan pipeline, and discrimination
against Armenians in Georgia. Attempting to improve their bilateral relations, Georgia and
Armenia signed an agreement in 2001 promising not to enter into alliances considered to be
hostile to the other country. Political instability in Georgia, most notably the two recent civil
wars, also placed on this trade route for Armenia.
Despite the ongoing tensions with its neighbors, Armenia continues to maintain extremely
close political relations with its most important trade partner, Russia. In fact, Russia
maintains a military presence in Armenia, controlling its borders and protecting its national
security.
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AZERBAIJAN
“Ever since ancient man first began to migrate, Azerbaijan has been the key
landbridge between Europe and Asia. The country also sits astride the main
route between Russia and Iran and onward points in the Middle East and
South Asia. So, the country truly is the crossroads of North-South and East-
West traffic.” – (Azerbaijan Special Report 2002)
Azerbaijan’s strategic location has placed it at the centre of
discussions for the restoration of both the traditional eastwest
Silk Route and a north-south corridor being discussed
by India, Iran and Russia. In addition to its fortuitous
geographic position, Azerbaijan has benefited from a
favorable climate, geography, and abundant natural
resources. All of these domestic factors contributed to the
development of an extensive transportation network during
the period of the former Soviet Union. However, Azerbaijan
still faces extremely high transport costs due to serious
neglect of its infrastructure; dilapidated infrastructure in its
most vital transit country, Georgia; widespread corruption,
considered to be the worst in the region; and, regional
disputes following the collapse of the Soviet Union have
resulted in relative transport costs (measured as ratio of
freight costs to value of merchandise) more than five times
the EU average (World Bank 2001). The vast majority of
the country’s export are oil products, a majority of which go
to Italy.
The three main transport corridors linking Azerbaijan to the
sea are through Georgia, Iran, and Russia. Each of these
corridors has presented significant obstacles to Azerbaijani
trade: the Georgian corridor has suffered from particularly
poor infrastructure on the Georgian side of the border as well
as the Georgian civil wars of the 1990s; the Iranian corridor
is the longest of the three, generally taking 10-12 days by
road; and the Russian corridor has been subject to the
tensions between Russia and Georgia (e.g., the 1994
blockade) as well as the Chechnyan war.
TRANSPORT INFRASTRUCTURE
BASIC INFORMATION
HDI Rank: 88
GDP per capita
2000 (PPP$): $2,936
Exports per capita
2000 (current USD): $267
Distance to port:
870km
Transport cost ratio
(2000): 0.07
Neighbors:
Armenia, Georgia, Iran, Russia
Primary transit neighbor(s):
Georgia
Main trading partners (2001):
Imports: United States (16%),
Russia (11%)
Exports: Italy (57%),
Georgia (4%)
Primary Exports (2001):
Oil Products (91%)
Food and associated products (2%)
Domestic Roads: poor
Transit Country Roads: poor
Domestic Rails:
Transit Country Rails:
Road
Since the collapse of the Soviet Union, road transport has become increasingly important for
Azerbaijan. The east-west transit corridor from Baku through Alyat (Azerbaijan) to Georgia
has now become the most important corridor for Azerbaijani trade. While the Azerbaijani
portion of this route is in poor/bad condition, the Georgian section is considered to be even
poor
poor
Transit Country Ports: poor
Neighboring Civil Conflict:
high
Relations w/ Neighbors: poor
- 99 -

worse (World Bank 2000). In fact, while shipment of a container via this highway only takes
3-5 days, the average cost is US$2,200; shipment to Bandar Abbas (Iran) takes 10-12 days
and costs US$700-800 (World Bank 2002). The highway’s incorporation into the new
Transport Corridor Europe Caucasus Asia (TRACECA ) Silk Route project should bring
about significant improvements. A US$40 million World Bank sponsored Highway Project
has already been initiated to improve this route.
Azerbaijan’s internal road network, while extensive, is also in a severely dilapidated state
due to poor maintenance; Kocks Consult recently estimated that 56% of the main road
network was in a poor state of repair while funding for maintenance is only one quarter of the
required level (World Bank 2002). The poor condition of the roads has not only contributed
to costs associated with delays and accidents but is considered to have increased vehicle
operating costs by between 28 and 44 percent (World Bank 2001). The dilapidated condition
of Azerbaijani roads can largely be attributed to minimal road funding since independence –
only one quarter of the required level.
Rail
Since the fall of the Soviet Union, Azerbaijan’s railways have witnessed a precipitous decline
in freight traffic to 10% of previous levels. Lines are now in a state of disrepair: the EU
estimates that nearly 900 km of rail need to be replaced and only 30 locomotives out of an
“inherited fleet” of 560 are operable (TRACECA 2002). On the positive side, recent efforts
associated with TRACECA have already brought about significant improvements in rail
efficiency. Most of the improvements have been focused on improving the east-west rail
corridor, from Baku to Georgia, which is Azerbaijan’s most important. The European Bank
for Reconstruction and Development has specifically allotted US$20.2m for rehabilitation of
these railways.
Azerbaijan has also benefited from the recent (1999) construction of a rail line to Russia that
bypasses Chechnya, thereby avoiding the Chechen war. The rail corridor to Iran remains of
minimal importance, suffering from limited capacity, disrepair, and vandalism.
Ports/Waterways
As part of the new Silk Route the port of Poti (Georgia) will continue to play the leading role
in Azerbaijan’s freight traffic. For more information on this port, see the section on Armenia.
Azerbaijan’s own port of Baku on the Caspian sea primarily serves as a transshipment point
for trade with the Central Asian states. Since Azerbaijan’s primary trading partners are
Russia and member states of the EU, the port does not handle much Azerbaijani freight
traffic. The port is currently operating at only 30% of capacity and its potential efficiency
suffers from low levels of infrastructure.
POLITICAL RELATIONS
Although Azerbaijan has been adversely affected by internal civil war in its main transit
neighbor, Georgia, the two countries maintain warm relations. Earlier this year the countries
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met and promised to seek greater political and economic cooperation. Both countries have
been cooperating on the construction of the new Baku-Ceyhan pipeline.
Unfortunately, Azerbaijan’s recent political history has otherwise been marked by domestic
instability and regional boundary conflicts. Since independence, Azerbaijan has suffered
several coups and attempted coups, many of which have related directly to the current level
of success of the Azerbaijani war against Armenia over Nagorny Karabakh. The ongoing
struggle with Armenia over this enclave, situated between the two Azerbaijani territories,
continues to dominate Azerbaijan’s political scene. Dating back to the 1920s, the conflict’s
roots lie in a debated Soviet boundary demarcation. It was not, however, until the late 1980s
that the conflict exploded into a full scale military conflict and the resulting border closure.
The dispute has left the country of Azerbaijan divided into two disjoint sections, severely
complicating transport to and from the western enclave.
Boundary disputes over the Caspian Sea and its rich natural resources have further weakened
Azerbaijan’s regional relations. The most notable of these disputes has been with
Azerbaijan’s southern neighbor Iran. Tensions escalated in July 2001 when two Azerbaijani
ships surveying the Caspian Sea were confronted by an Iranian gunboat and forced to turn
back. Azerbaijan’s economic ties to the US and Israel and the presence of separatist
Azerbaijani groups in Iran have further weakened relations between the two countries.
Paralleling the deteriorating relations, Azerbaijan’s exports to Iran have fallen from 24% of
total exports in 1997 to less than 0.5% in 2001.
Azerbaijan’s relations with Russia have shown recent signs of improvement, but have
traditionally been uneasy as a result of Azerbaijan’s support for Chechnya. During the first
Chechen conflict in 1994, Russia imposed a complete transport blockade of Azerbaijan,
closing both its maritime and overland borders. At that time, Russia was a vital trading
partner of Azerbaijan accounting for 70% of its exports (Hadjy-zadeh 2000). Russia’s close
ties and military support for Armenia, as well as property right disputes on the Caspian Sea
have further contributed to the strained relations. Current Russian President Vladimir Putin,
however, has demonstrated a new resolve to strengthen relations with Azerbaijan, including a
proposed settlement over the disputed areas of the Caspian Sea.
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ASIA – SOUTH & SOUTH-EAST
TRANSIT ROUTES OF BHUTAN AND NEPAL
- 102 -

TRANSIT ROUTES OF LAOS
- 103 -

With the exception of western Africa, the south and southeast Asian landlocked countries,
Nepal, Bhutan and Laos are performing worse relative to their neighbors in human
development than the landlocked countries of any other region. Yet, the region is the only
one where the landlocked countries have a lower ratio of transportation and insurance costs
to value of exports than their maritime neighbors. This discrepancy seems to be accounted
for by the fact that all three of these countries trade predominantly with their immediate
neighbors. In the case of Bhutan and Nepal, India is the main trading partner, while for Laos
it is Thailand and Viet Nam.
The minimal transoceanic trade of these countries appears to result from the limited number
of transit corridors. With the exception of Lesotho, the countries of Nepal and Bhutan are
unique in the fact that they have only one transit neighbor, India. This implies complete
dependence on India for access to the coast, giving India enormous negotiating power.
Interestingly, each has a very different political relationship with India. Bhutan has enjoyed a
very close working relationship with India, and as a result has been granted liberal access to
transit through India. In fact, India allows Bhutanese transit trade to be conducted under the
supervision of Bhutanese customs, yielding little administrative hassle. In contrast, Nepal’s
relations with India have often been strained, with India often seen to have more influence in
the negotiation of treaties and disputes. In 2001/2002, for example, India placed restrictions
on Nepalese trade while the two countries renegotiated trade treaties.
Relatively poor domestic infrastructure has further complicated transit for the south and
southeastern Asian landlocked countries and has precluded them from taking full advantage
of the better surrounding infrastructure. Transit trade entering Laos on the Thai rail system,
for example, must currently be unloaded and placed on trucks since Laos has not yet
developed a rail system.
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BHUTAN
Bhutan is overwhelmingly dependent on trade with India –
which accounts for 94.6% of Bhutan’s exports and 69.4% of
Bhutan’s imports – and the export of hydroelectricity. Thus,
Bhutan is less dependent on transit corridors (IMF 1999) than
most landlocked countries. For its limited exports to overseas
markets, Bhutan is dependent on India for transit since the
Himalayan mountain range blocks the route to China. Its
bilateral relationship with India is therefore critically
important and remains very strong.
BASIC INFORMATION
HDI Rank: 140
GDP per capita
2000 (PPP$): $1,412
Exports per capita
2000 (current USD): $179
Distance to port:
775km
Reflecting such strong relations, the small amount of
Bhutanese transit trade through India is not subject to customs
duties and trade restrictions by Indian authorities. In fact,
Bhutan’s transit trade from Calcutta is controlled by the Royal
Bhutan Customs and not Indian Customs. This relative
freedom of transit contrasts greatly with the challenges faced
by Nepalese transit, which has been historically subject to
significant interference (Chakra Infrastructure Consultants
2001).
TRANSPORT INFRASTRUCTURE
Road
While Bhutan boasts a high percentage of paved roads, nearly
67%, and fair quality road infrastructure, its mountainous
terrain presents significant challenges. The harsh topography
limits not only the speed of vehicles but also the size of trucks
that can use the roads: Bhutan’s roads generally only handle
trucks under 10 tons. Since most of the transit goods coming
from India are transported break-bulk in larger trucks, these
trucks must often stop at the border for goods to be unloaded
and reloaded on smaller trucks for continuation. Such delays
Transport cost ratio:
Neighbors:
China, India
Primary transit countries:
India
further aggravate the inefficiencies associated with the Indian road system – considered to be
worse than many African roads (Canning 1998).
Rail
Bhutan has no rail system and depends primarily on road transport for transit through India.
While it is possible for Bhutan to use the Indian rail system from the Indian/Bhutanese
border, information is not available as to whether this mode of transport is used.
Ports
For its small amount of trade with regions outside of India, Bhutan depends almost
exclusively on Calcutta Port. It estimated that only 6,000 tons per year of Bhutanese imports
N/A
Main trading partners (1997):
Imports: India (69.4%)
Exports: India (94.6%)
Primary Exports (1997):
Hydroelectricity (31.9%)
Wood products (13.3%)
Domestic Roads: fair
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
none
fair
Transit Country Ports: fair
Neighboring Civil Conflict:
low
Relations w/ Neighbors: good
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and exports pass through the port per year. While this port is reported to be struggling with
inefficiencies, cumbersome procedures, and weak infrastructure, it is unclear the extent to
which this affects Bhutanese trade. Since so much of Bhutan’s trade is with India,
procedures at Calcutta’s port might not have a large direct impact. Alternative routes have
not been developed since they would offer limited benefits to Bhutan’s low volume of transit
traffic. Moreover, the other nearby ports in Bangladesh are less attractive due to the
constraint of two border crossings.
POLITICAL RELATIONS
Given Bhutan’s overwhelming economic and transit dependence on India, a strong bilateral
relationship is crucially important for Bhutan. Fortunately, this relationship has been
historically consolidated with Bhutan and India signing a Treaty of Friendship in 1949.
Under this Treaty, Bhutan is required to consult India on its external affairs. Conversely,
India protects Bhutan’s borders from external threat. India also continues to be Bhutan’s
largest donor. More recently, the relationship has been slightly strained due to the use of
southern Bhutan by north-east Indian militant groups fighting against India. To minimize the
strain, the Bhutanese military has provided cooperation with the Indian military
(CountryWatch 2002).
While Bhutan does not have formal diplomatic ties with its other neighbor, China, relations
have shown recent improvements. The central source of historic tensions has been border
disputes. Negotiations between the two countries over the disputed land are progressing
positively with several recent high-level visits and the 1998 agreement “to maintain peace
and tranquility on the Sino-Bhutanese border" (EIU 2003). Relations, however, are still far
from being tension free.
At the multilateral level, Bhutan is a member of the South Asian Association for Regional
Cooperation (SAARC) with Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka
(WDI 2002). The SAARC has established a Preferential Trading Arrangement (SAPTA) to
promote trade and economic cooperation amongst the region (WDI 2002). While SAARC
has had some success in promoting cooperation among its members, the level of integration
and cooperation does not match that of other regions such southern Africa.
- 106 -

LAOS
Laos trades primarily with its neighbors Thailand and Viet
Nam, which account for 44% of Laos’ total exports and 74%
of imports. While transit through Viet Nam is limited by the
mountainous terrain, Thailand continues to provide extremely
strong transport links which are the primary routes for Laos’
overseas trade. Thailand has also been actively cooperating to
promote Laotian transit and bilateral trade, having developed
facilities and legal frameworks to facilitate the movement of
Laotian goods through the country (UNCTAD 1999a). Laos’
large dependence on Thailand’s corridors, due to limited
alternative, has limited the opportunities for competition
between corridors. Transit routes through Cambodia are not
yet operational but will potentially provide a link through the
port of Sihanoukville in Cambodia (Cabanius and Bouaphanh
2001). There are no alternate routes through Myanmar due to
mountainous terrain, poor infrastructure and political issues.
m ntma ie limited us terrain, poor infrastructure and political
issues.
Unfortunately, Laos’ poor levels of domestic infrastructure
have precluded it from taking full advantage of these strong
surrounding systems. It is reported to have an extremely poor
road system with single-carriage highways made worse during
the rainy season. There is no rail system. Any freight not
shipped by roads is transported by river.
TRANSPORT INFRASTRUCTURE
Road
While two thirds of Laos’ domestic freight traffic is
transported by road, the country’s 23,300 km of roads are
considered to be of poor quality (EIU 2002). As of 1998,
fewer than half the roads were paved and of those highways
that were, most were single-carriage. Approximately 41% of
the population lives more then 6km from a main road and
many dirt roads are unusable in the rainy season, which
generally lasts for five months (EIU 2001).
BASIC INFORMATION
HDI Rank: 143
GDP per capita
2000 (PPP$): $1,575
Exports per capita
2000 (current USD): N/A
Distance to port:
620km
Transport cost ratio: 0.08
(1998)
Neighbors:
Cambodia, China, Myanmar,
Thailand, Viet Nam
Primary transit countries:
Thailand
Main trading partners (2001):
Imports: Thailand (62%),
Viet Nam (12%)
Exports: Viet Nam (25%),
Thailand (19%)
Primary Exports:
Wood & wood products (31%)
Hydroelectricity (28%)
Domestic Roads: poor
Transit Country Roads: good
Domestic Rails:
Transit Country Rails:
none
good
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: good
The surrounding Thai road system is of notably high quality. There are three main road
transit corridors between Bangkok and Laos. The first is through Vientiane, the second is
through Savannaket, where a bridge across the Mekong is under construction, and the third is
through Pakse. Unfortunately, Thai-owned freight trucks (which are run as a monopoly on
Laos trade) cannot enter Laos, and vice versa. Hence, transshipment must occur at Nong
- 107 -

Khai (at the Thai-Laos border) to transfer between Thai and Laotian owned trucks. In
contrast, Laotian and Viet Namese trucks may carry transit goods freely between the two
countries. This transshipment of goods through Thailand increases the prices of Laos’ goods
greatly, between 60 – 300% depending on the good and source of data (Cabanius and
Bouaphanh 2001).
Laos’ other main transit neighbor, Viet Nam, carries only a small proportion of its transit
export trade as Thai routes are generally cheaper and more reliable. The main routes between
Laos and Vietnamese pass through steep mountains and are therefore somewhat difficult for
truck traffic (Cabanius and Bouaphanh 2001).
Road links with Laos’ other neighbors are of minimal importance. Routes through Myanmar
are severely hindered by the mountainous terrain, poor infrastructure and political issues.
The road link between China and Laos involves a 100 km stretch of dirt track passable only
during the dry season (Library of Congress 2002).
Rail
Laos has no domestic rail system. Thus, while Thailand has shown its willingness in
supporting Laos – Thai trade by completing a railway section from Bangkok to the centre of
the Friendship Bridge on the Mekong River at Nong Khai, Laos still must unload the cargo at
the border and reload it on trucks. The short link on the Laos side from the Friendship
Bridge to Vientiane is still under survey. (Cabanius and Bouaphanh 2001)(Library of
Congress 2002).
Ports/Waterways
The majority of Laos’ transit trade passes through the port of Bangkok. While the port offers
modern facilities, Thailand’s growth has put increasing pressure on its capacity. To deal with
the congestion, Thailanda has constructed two new deep sea ports. Much of Laos’ transit
trade through Viet Nam passes through the port of Da Nang, and to a lesser extent, the ports
of Cua Lo, Xuan Hai and Quy Nhon. The port of Vung Ang is currently under construction
and is envisaged to be dedicated to Lao PDR transit goods.
Lao’s extensive internal waterways have provided an alternate means of transport. The
Mekong River has 4600km of navigable waterways available along the river and its
tributaries (EIU 2001). The government is encouraging waterway use by upgrading river
ports and improving river access. However, the river is only navigable upstream to China by
small craft and passage through Cambodia to the sea is prevented by Phapheng Falls.
POLITICAL RELATIONS
Laos’ relations with its most important transit neighbor, Thailand, have often been tense.
The two countries recently fought a border war in 1987 and, although the two countries have
grown closer through trade and investment, political relations are still strained and
characterized by border disputes. Laos also has a history of border disputes with Cambodia
and Myanmar. Cambodia and Laos have held four rounds of talks since 1995, agreeing to
recognize the internationally accepted principles of border limitation. Myanmar and Laos
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have had improved relations following the signing of the Treaty on the Demarcation of
Boundaries in 1994.
Internationally, Laos is a member of the ASEAN Free Trade Agreement (AFTA), which
allows the free movement of capital and is also expanding to include primary products.
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NEPAL
Due to the Himalayan range to the north of the country
limiting trade and contact with China, Nepal remains heavily
dependent for both bilateral and transit trade upon its only
other neighbor, India. India has had a strong role in Nepalese
politics for many years, but since India’s 1990 trade blockade
of Nepal was followed by the internal overthrow of the
Nepalese panchayat government, many have questioned the
degree to which Nepal is actually independent of India. One
Indian commentator stated that Nepal only maintains an
“image of independence.” (Spotlight, May 1991, as cited in
Mishra (2002). A more recent example of this influence came
in 2001 and 2002, when India placed restrictions on Nepalese
trade while the two countries renegotiated trade treaties. Nepal
often has little leverage in such negotiations due to its
dependence on India for transit trade.
Today, transit operations between India and Nepal are mainly
governed by the Indo-Nepal Treaty of Transit, which was
renewed in 2002 and assists in the development of multimodal
transport systems to and from Nepal through India
(Government of Nepal 2002). When blockades or restrictions
are not in place, Nepal is able to use the good quality Indian
rail network as well as several Indian road corridors to the
ports of Calcutta and Haldia. 35 India has also recently agreed
to provide facilities for Nepalese transit trade through Mumbai
and Kandla in addition to the existing facilities at Calcutta and
Haldia (UNCTAD 1999b). This India-Nepal transport network
has recently been enhanced by the construction of three inland
container depots (dry ports) on the border. They allow for the
stuffing, customs clearance and loading of containers at the
border so that there is only a modal change and no customs
procedures at the land/sea port.
BASIC INFORMATION
HDI Rank: 142
GDP per capita
2000 (PPP$): $1,327
Exports per capita
2000 (current USD): $57
Distance to port:
1160km
Transport cost ratio
(2000): 0.05
Neighbors:
China, India
Primary transit countries:
India
Main trading partners (2001):
Imports: India (44%),
China (12%)
Exports: United States (35%),
India (34%)
Primary Exports:
Carpets
Ready-made Garments
Domestic Roads: poor
Transit Country Roads: fair
Domestic Rails:
Transit Country Rails:
While Nepal could potentially also transit through Bangladesh
or China, these routes face serious limitations and are currently not used. The Bangladesh
corridor would still require Nepalese trade to transit India, and routes through China are
limited by the Himalayan mountains. However, potential Nepal – China routes are being
investigated (WTNN 1995).
fair
good
Transit Country Ports: fair
Neighboring Civil Conflict:
low
Relations w/ Neighbors: poor
35 There are now a total of 15 transit routes available.
- 110 -

TRANSPORT INFRASTRUCTURE
Roads
The bulk of Nepal’s transit trade has traditionally traveled by road over India’s poorly
maintained and highly congested road system. With the newly constructed containerized
cargo facilities at Biratnagara and Bhairava at the border, road transport from Nepal through
India is significantly faster and cheaper than before.
Domestically, Nepal has a 5,500km road network of, less then one third of which is paved.
The majority of roads are graveled or dirt roads, and wash out frequently during the June-
September rainy season. Most hill and mountain trails are only suitable for pedestrians and
pack animals (EIU 2001). Construction and maintenance of paved highways is heavily reliant
on foreign aid. Development assistance to the transport sector totaled $US 450m between
1990-99 (Stone 2001).
Rail
Despite only having 59km of rails, the Nepalese rail system provides direct and adequate
transport of cargo to Indian ports. The recent construction of a 5.2 km railway connecting
the new inland container port of Birganj directly to India’s rail network has further improved
this system and is predicted to increase rail traffic significantly. The port offers an
improvement in cost, speed (up to 10 days faster) and reliability of transit (Chakra
Infrastructure Consultants 2001). Moreover, the Indian rail network, to which this railway
connects, is of good quality. Shipping costs on the rail system, however, are alleged to be
high since freight transport is used to subsidize passenger transport.
Ports
Transit trade passes mainly through Calcutta Port (425,000 tons p.a.) and Haldia Port
(160,000 tons p.a., mainly imports), both of which have been described as having inefficient
management, excessive delays and high costs (Subramanian and Arnold 2001). The ports are
operating at excess capacity and can have turnaround times of several days, with the average
at Indian ports being 4.7 days (EIU 2002).
POLITICAL RELATIONS
As discussed, Nepal’s geographic location requires transit trade to pass through India. Such
dependence has rendered Nepal subject to political pressure from India, which has often been
able to leverage its strategic position in trade negotiations, with implications for Nepalese
politics. An Indian blockade of Nepal in 1990, for example, is considered to have
precipitated the downfall of the Nepalese panchayat government. And while several bilateral
treaties such as the 1950 Peace and Friendship Treaty and the Treaty of Trade and Commerce
provide the basis for the free movement of goods between the two countries, these have not
been uniformly applied. In 1989, for example, India declared several transit treaties expired
and closed all but two border crossings. Such limitations on trade and transit are considered
to have been imposed in retaliation for Nepal’s importation of weapons from China.
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More recently, India delayed the automatic renewal of a preferential trade treaty agreement in
late 2001 so that the original rules could be renegotiated. The ultimate renewal in March
2002 places quota restrictions on several key Nepalese exports and is considered to be
antithetical to the spirit of the initial treaty. As stated by the EIU, it “effectively bring[s] an
end to their [Nepal’s] preferential treatment beyond a certain level.” (EIU 2001) Beyond
tensions stemming from trade relations and Nepal’s dependence on India’s transit corridors,
ongoing border disputes have further weakened relations.
While relations with India have often been strained, Nepal has maintained a cordial
relationship with China since establishing diplomatic relations in 1955. This relationship has
been strengthened by increasing aid flows and technical assistance from China in addition to
several high-level visits in recent years. Trade between the countries, however, is limited by
the natural barrier of the Himalayan Mountains.
At the multilateral level, Nepal is a member of the South Asian Association for Regional
Cooperation (SAARC) with Bangladesh, Bhutan, India, Maldives, Pakistan and Sri Lanka.
The SAARC has established a Preferential Trading Arrangement (SAPTA) to promote trade
and economic cooperation amongst the region (WDI 2002). While SAARC has had some
success in promoting cooperation among its members, the level of integration and
cooperation does not match that of other regions such southern Africa.
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SOUTH AMERICA
TRANSIT ROUTES OF SOUTH AMERICA
Unlike the landlocked countries of other regions, most notably those of central Asia and
southern Africa, Bolivia and Paraguay do not share deep historical, cultural, or political
bonds nor are they geographically similar. Bolivia is most closely integrated with the
members of the Andean Community (CAN) customs union, while Paraguay is integrated in
the MERCOSUR region. Bolivia’s landscape is dominated by mountains, while Paraguay is
primarily planar. And Bolivia has a large indigenous population, while Paraguay is
predominantly mestizo. Nonetheless, these countries face strikingly similar challenges.
Both suffer from poor domestic infrastructure, and unlike most African landlocked countries,
are surrounded by relatively extensive and well maintained transport corridors. The poor
maintenance and operation of domestic linkages, however, have prevented these countries
from benefiting from such strong external transit corridors. Paraguay’s railroad, for example,
- 113 -

links to the railways of Argentina, Uruguay and Brazil, and could serve a primary role in
international transport, but has fallen into a state of disuse.
Bolivia and Paraguay also both face political challenges with their transit neighbors. While
they are not subject to the same level of domestic or surrounding strife of the countries of
Africa, nor the frequent border closures of the central Asia region, the South American
landlocked countries have suffered from political tensions with their transit neighbors. Most
recently, for example, an ambitious Bolivian plan that could double exports by exporting
natural gas via Chilean ports has been delayed by ongoing domestic protest in Bolivia against
the use of Chilean corridors. Such protest is largely a product of the ongoing and century-old
tensions between the two countries.
On the positive side, Bolivia and Paraguay also have similar opportunities: both are
advantageously located in the heart of South America, potentially allowing them to serve as
the South American trade cross-roads, between MERCOSUR and the Andean Community.
This central location could allow them to serve as regional hubs for new technologies less
dependent on transport costs, such as telecommunications. Both Bolivia and Paraguay also
hold the potential to be major regional energy hubs since they both possess significant
reserves. Bolivia recently discovered expansive reserves of natural gas and oil, and Paraguay
has the potential to be a major exporter of hydroelectric power. Since these sectors are not
primarily dependent on road and rail infrastructure, it will be possible to develop and benefit
from them even before domestic transport infrastructure is improved to an adequate level.
- 114 -

BOLIVIA
Bolivia lost access to the Pacific coast in its 1878-1883 war
with Chile. Its harsh natural environment, dominated by a
topography of steep mountains that bisect the country, with a
mean elevation of over 1,000m and mountain ranges with
heights of 3,650-3,900m, has presented significant challenges
to transport. Extremely poor internal infrastructure and tense
relations with neighboring Chile further exacerbate Bolivia’s
situation as a landlocked country. Its central location,
however, provides the opportunity to serve as a regional trade
and transport hub between the Andean and MERCOSUR
countries. Large natural gas and oil reserves may also
contribute to the development of the country as a regional
energy centre. According to Castellón (2001), “it is expected
that within 10 years, 80% of regional trade could be passing
through Bolivia’s Tax Free Zone, making it a potential
regional centre of energy and trade.” Bolivia has also seen
significant growth in its telecommunications sector after
privatization and has become a fiber optics cable network
distribution centre for South America.
While more than a fifth of Bolivia’s exports are to Brazil,
smoothly functioning sea-access corridors are critical for its
significant volume of trade with overseas markets (primarily
the US). The dominant corridors have traditionally been those
accessing the northern Chilean ports of Arica, Iquique and
Antofagasta, which account for nearly 80% of Bolivia’s
export and import trade. The recent development of the
southern Peruvian ports and concerted efforts to improve this
corridor will provide Bolivia with a significant alternative.
Corridors to the ports of Brazil and Argentina are being
developed, but are of ancillary importance.
TRANSPORT INFRASTRUCTURE
BASIC INFORMATION
HDI Rank: 114
GDP per capita
2000 (PPP$): $2,424
Exports per capita
2000 (current USD): $175
Distance to port:
414km
Transport cost ratio
(2000): 0.21
Neighbors:
Argentina, Brazil, Chile,
Paraguay, Peru
Primary transit neighbor(s):
Chile, Peru
Main trading partners (2001):
Imports: Argentina (17%),
United States (17%)
Exports: Brazil (22%),
Colombia (14%)
Primary Exports:
Hydrocarbons
Gas & Oil
Domestic Roads: poor
Transit Country Roads: good
Domestic Rails:
Transit Country Rails:
Road
While 95% of Bolivia’s exporting firms do so by road, the country’s roads are considered the
least developed in South America (World Bank 2002). Only 5-20% of the road system is
paved (Castellón 2001, EIU 2002), and approximately 70% consists of unmade earth.
Moreover, the quality of the roads is extremely poor with only 10-15% considered passable
(Langman 2000). The US Department of State warns that road conditions in Bolivia are
“extremely hazardous” (US Dept. of State). Many of these difficulties stem from the harsh
topography, frequent flooding, low population density, and weak management systems. To
address these issues, the Bolivian government has recently affirmed its commitment to better
poor
good
Transit Country Ports: good
Neighboring Civil Conflict:
low
Relations w/ Neighbors: fair
- 115 -

developing the nation’s road infrastructure. The plan emphasizes strengthening domestic
road links to Peru, Chile, Argentina and Brazil.
The road corridors of these surrounding transit neighbors are in reasonably good condition
and have recently benefited from significant improvements. Efforts to develop the Andean
Highway System will further strengthen the surrounding transit routes.
Rail
To compensate Bolivia for the loss if its coast, Chile helped Bolivia develop its rail corridors
with the inauguration of the Arica-La Paz railway in 1913 under the 1904 Peace and
Friendship treaty. Unfortunately, the Bolivian rail system is now considered extremely
inefficient and largely inadequate, with many of the rails in a state of disuse. Many of the
recent difficulties faced by the system can be directly attributed to low levels of investment,
the disconnection of the two rail networks (one on each side of the Andean ranges) and a lack
of forwarders to consolidate cargo, thereby limiting the amount of container traffic.
The weak rail system has had serious consequences for Bolivian traders. In 1995, for
example, less than half of the soya produced was able to be transported due to a lack of
hauling capacity of the railroad system. The system continues to face difficulties dealing with
the peak soya season, which poses a particular problem since it is essential to reach the ports
during winter (in the Northern hemisphere) when the prices are high. Much of the Bolivian
soya does not reach the ports until the prices have begun falling.
Ports/Waterways
Bolivia has traditionally depended on the northern Chilean ports of Arica, Iquique and
Antofagasta for its international freight trade. Recent improvements to the Peruvian ports of
Ilo and Matarani, however, have increased the importance of these ports and helped foster
competition between Chile and Peru for Bolivia’s transit trade.
While river transport has yet to play a significant role in trade due to a lack of technology and
resources, it holds the potential to do so. In 1996 the Accord of Fluvial Navigation on the
Paraguay-Paraná Rivers was signed by Argentina, Bolivia, Brazil, Paraguay and Uruguay. It
provides for “free navigation, equal treatment, free transit and reciprocity, multilateral
treatment of cargo reservations, transport and trade facilitation, and port and navigational
services.” Bolivia is also in the process of constructing a road that will
connect La Paz with Puerto Suárez on the Paraguay River (St. John 2001).
POLITICAL RELATIONS
While Bolivia has good political relationships with neighboring Peru, Brazil, Paraguay, and
Argentina – strengthened by regional groupings such as the Organisation of American States,
the Rio Group, and MERCOSUR – tensions with its most important transit country, Chile,
have remained high since the war of 1878-1883 when Bolivia lost control of the coastal
province of Atacama. Since then Bolivia has gained preferential rights of access to some of
Chile’s Pacific coast, but has never regained sovereign access to the land lost – a longstanding
goal of Bolivia’s foreign policy. Many of the arrangements between Bolivia and
Chile are considered largely inadequate by the Bolivians and continue to fuel tension. In fact,
- 116 -

official diplomatic ties have been severed between the two countries, with Bolivia only
maintaining consular relations with Chile. The underlying tension has been manifest in
recent social upheaval and opposition to a proposal to develop a gas pipeline to a Chilean
port. The pipeline would allow Bolivia to take advantage of the recent increase in gas supply
and a proposed multinational $5 billion project. Despite such problems, relations have been
slowly improving; in 2000, Bolivia and Chile’s Ministers of Defense met to discuss their
border problem (EIU 2002).
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PARAGUAY
Dependent primarily on trade with its neighbors (its
immediate neighbors account for over 50% of total exports)
and the export of hydroelectricity, Paraguay is not as directly
affected by its landlocked position as most other landlocked
countries. The well-developed transport infrastructure of
Paraguay’s maritime neighbors, Argentina and Brazil, further
limits the immediate challenges of being landlocked. Yet
Paraguay has been unable to take full advantage of these high
infrastructure levels as a result of its poor internal transport
system. Such internal infrastructure problems are exacerbated
by a historically volatile domestic situation characterized by
coups and infighting. This internal conflict has fostered a
sense of distrust between Paraguay and its neighbors.
Paraguay’s primary transit corridors are by road through
Brazil to the ports of Paranagua and Santos, and through
Argentina to the ports of Rosario and Buenos Aires. Internal
river transport, once of primary importance, is now considered
ancillary, but has seen a recent increase in trade via the
Hidrovia.
BASIC INFORMATION
HDI Rank: 90
GDP per capita
2000 (PPP$): $4,426
Exports per capita
2000 (current USD): $278
Distance to port:
1,022km
Transport cost ratio
(2000): 0.17
Neighbors:
Argentina, Bolivia, Brazil
Primary transit countries:
Argentina, Brazil
Main trading partners (2001):
Imports: Brazil (31%),
Argentina (21%)
Exports: Brazil (26%),
Argentina (23%)
TRANSPORT INFRASTRUCTURE
Roads
Having become the primary mode of transit freight in the
1980s, Paraguay’s road system is of critical importance for
both domestic and international trade - over 80% of domestic
freight being transported via roadways. This network is
largely inadequate and of poor quality, with only 3,224 km
(6%) of roads paved. Castellón suggests that there has been a
significant improvement over the past fifteen years (Castellón
2001). Such poor domestic road infrastructure has not
Primary Exports:
Hydoelectricity
Agricultural Products
Domestic Roads:
Transit Country Roads:
Domestic Rails:
Transit Country Rails:
Transit Country Ports:
allowed Paraguay to benefit from the strong surrounding road networks of Argentina and
Brazil. Recognizing the weaknesses of its road system, the Paraguayan government has
placed emphasis on its development and has negotiated a $82.3 million dollar loan from the
IADB for several road system projects. The government will have to compensate for
significant damage to roads and bridges caused by excessive flooding of the Paraguay River
during the mid-1990s El Niño cycle (UN DHA 1997).
Rail
Paraguay’s 135 year old railroad, The Ferrocarril Central del Paraguay, is no longer
functioning. The main line, which links Asunción with Encarnación will need substantial
poor
good
poor
good
good
Neighboring Civil Conflict: low
Relations w/ Neighbors: fair
- 118 -

enovation to become operational. It would provide links with railroads in Argentina,
Uruguay, and Brazil. While the Paraguayan government has tried to privatize the railroad, the
substantial investment needed to upgrade the current system has so far precluded any private
interest.
Ports /Waterways
Paraguay’s major transit ports are Paranagua and Santos, Brazil and Buenos Aires and
Rosario, Argentina. All of these ports offer Paraguay duty free zones or sheds and are of
international standards.
The potential of Paraguay’s extensive domestic river system for transport has not been fully
realized owing to insufficient storage facilities, severe financial constraints in developing and
upgrading inland ports, irregular services, very high freight charges, and a lack of shipping
space. These problems are complicated by navigational difficulties, in particular shallow
waters which limit the size of container traffic. To address these issues and facilitate the
interconnection of the region, the Paraguay-Paraná Hidrovia Project was proposed. If
completed, it would allow for the year-round passage of freight from the Atlantic Ocean
through Paraguay all the way to Bolivia. This project, however, has been delayed due to
environmental concerns.
POLITICAL RELATIONS
While Paraguay has emerged from the isolation associated with the authoritarian rule of
General Alfredo Stroessner (1954-1989), relations with its MERCOSUR partners Argentina,
Brazil and Uruguay remain strained. These tensions stem largely from Paraguay’s ongoing
domestic instability that has been characterized by attempted coups and impeachments,
assassinations, resignations, and frequent changes in political leadership. Following a
political upheaval in 1996, the MERCOSUR partners jointly announced that democratic
governance would be a prerequisite of membership in the trading bloc.
Further tensions with MERCOSUR partners have resulted from Paraguay’s role as a centre
for contraband and re-exports. In response, Brazil recently decided to increase border
enforcement and limit duty-free purchases. This has had dramatic consequences for the
Paraguayan economy, including a doubling of its trade deficit (Castellón 2001).
- 119 -

BOPS
Break Bulk
CAN
CAR
CEEAC/ECCAS
CEMAC
CEPGL
CIF
CILSS
COMESA
DAF
DRC
EAC
ECOWAS
EU
FEZ
FDI
FOB
FTAA
HDI
IMF
LDC
LLC
MERCOSUR
NTB
OCBN
Rake
RCD-Goma
SAARC
SADC
SAPTA
SNTN
STRN
TC
Transit Country
UDEAC
UEMOA
UN
UNCTAD
WDI
GLOSSARY
IMF Balance of Payment Statistics.
Cargo which is shipped as a unit ( i.e. palletized cargo, boxed cargo, large machinery,
trucks and pre-slung cargo). This type of cargo is not containerized.
Comunidad Andina (Andean Community).
Central African Republic.
Communauté Economique des Etats de l’Afrique Centrale (Economic Community of
Central African States).
Communauté économique et monétaire de l’Afrique centrale (Central African Economic
and Monetary Community).
Communauté économique des pays des grands lacs (Economic Community of the Great
Lakes Countries).
Cost of a good, including insurance and freight. See also FOB and CIF/FOB ratio.
Comite inter-Etats de llutte contre la secheresse ay Sahel (Permanent Interstate
Committee for Drought Control in the Sahel).
Common Market for Eastern and Southern Africa.
Delivered at Frontier.
Democratic Republic of Congo.
East African Community.
Economic Community Of West African States.
European Union.
Foreign Economic Zones/Foreign Trade Zones.
Foreign Direct Investment.
Cost of a good, free on board. That is, cost of a good without the cost of freight and
insurance. See also CIF and CIF/FOB ratio.
Free Trade Area of the Americas.
Human Development Index.
International Monetary Fund.
Least Developed Country.
Landlocked Country.
Southern Common Market/Treaty of Asunción.
Non-tariff barrier.
Organisation commune Benin-Niger (Benin-Niger Organisation).
Wagons/carriages semi permanently joined in an articulation.
Congolese Rally for Democracy – Goma.
South Asian Association for Regional Cooperation.
Southern African Development Community.
SAARC Preferential Trading Arrangement.
Societe Nationale des Transports du Niger (Niger National Transport Society).
Synidcat des Transporteurs Routiers du Niger (Niger Transport Route Syndicate).
Transit Country.
A country over which a landlocked country’s trade usually passes in order to reach a
port.
Douanière des Etats de l'Afrique Centrale (Central African Customs and Economic
Union).
Union economique et momonetaire oust-africaine (West African Economic and
Monetary Union).
United Nations.
United Nations Conference on Trade and Development.
World Bank World Development Indicators.
- 120 -

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ZAMBIA
Chikoti, V. (?). Overview of Mobility in Zambia, Kabwe Municipality.
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US DoS (2003). Economic Trends and Outlook, U.S. Commercial Service, U.S. Department
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- 131 -

AFRICA - CENTRAL AND EASTERN
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SMIDO (2002). Business Opportunities with the COMESA Free Trade AREA, Small and
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ETHIOPIA
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EIU (2002). Ethiopia Country Report 2002. London, Economist Intelligence Unit.
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Ports and Sea Terminals Industry (2002). Djibouti Port Expansion, http://www.porttechnology.com/projects/djibouti/.
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UGANDA
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Mutumba-Lule, A. (2001). 17 Firms Vying for Malaba Contract. The East African. 8 October
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RWANDA
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- 136 -

IRIN (1996). Great Lakes: IRIN Weekly Round Up #14:. United Nations, Department of
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- 137 -

- 138 -

AFRICA - WESTERN
ECOWAS (1999). Development of Physical Infrastructure for Roads, Telecommunications
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BURKINA FASO
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Jean-Bertin, O. (2002). Burkina Faso- Burkina Faso Transport Sector Program, Ministry of
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CENTRAL AFRICAN REPUBLIC
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- 140 -

Economist (2002). The Road to Hell is Unpaved. The Economist. 19 December 2002.
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CHAD & NIGER
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Washington, World Bank. 23864.
- 143 -

ASIA - CENTRAL
United Nations (1994). Transit Transport Systems of the Newly Independent and Developing
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IAS (2002). Afghanistan Foreign Relations, Institute for Afghan Studies,
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UNESCAP (2002). Afghanistan: Status of the Asian Highway (AH) project, United Nations
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CAUCASUS
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ASIA - EASTERN
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EIU (2002). Country Report: Nepal, Mongolia, Bhutan, Economist Intelligence Unit.
Government of Nepal (2002). Treaty of Transit Between His Majesty's Government of Nepal
and the Government of India. Calcutta, Government of Nepal Trade Promotion Centre.
ICIMOD-SNV (1997). Districts of Nepal: Indicators of Development. Kathmandu, ICIMOD.
IMF DOTS (2002). Direction of Trade Statistics Yearbook. Washington, IMF.
Kahn, A. R. (2000). Globalisation and Sustainable Human Development: An Assessment of
Challenges Facing Nepal. Geneva, UNCTAD. UNCTAD/EDM/Misc.124.
Mishra, R. R. (2002). Does Nepal Deserve a Better Deal? The Kathmandu Post. Kathmandu.
14 March 2002.
Pradhan, G. M. (1990). Transit of Land-Locked Countries and Nepal. Jaipur, Nirala
Publications.
Stone, J. I. (2001). Infrastructure Development in Landlocked and Transit Developing
Countries: Foreign Aid, Private Investment and the Transport Cost Burden of Landlocked
Developing Countries. Geneva, UNCTAD. UNCTAD/LDC/112.
Subramanian, U. and J. Arnold (2001). Forging Subregional Links in Transportation and
Logistics in South Asia. Washington, World Bank.
UNCTAD (1999b). Improvement of Transit Transport Systems in Landlocked and Transit
Developing Countries: Issues for Consideration. New York, UNCTAD. TD/B/LDC/AC.1/13.
- 161 -

WDI (2002). World Development Indicators. Washington, World Bank.
WTNN (1995). China to study Nepal trade route proposal. World Tibet News. Kathmandu. 1
May 1995.
- 162 -

SOUTH AMERICA
BOLIVIA
Bojanic, A. (2001). "Bolivia's Participation in International Trade." Overseas Development
Institute Working Paper.
Castellón, R. P. (2001). Review of Recent Progress in the Development of Transit Transport
Systems in Latin America, UNCTAD: Geneva. UNCTAD/LDC/113.
EIU (2002). Bolivia Country Profile 2002. London, Economist Intelligence Unit.
EIU (2002). Country Report 2002. London, Economist Intelligence Unit.
EIU (2002). Country Report 2003-04. London, Economist Intelligence Unit.
Langman, Jimmy (2000). "Sad state of roads a sign of Bolivia's rocky path to development."
The Dallas Morning News.
St. John, R. B. (2001). "Same Space, Different Dreams: Bolivia's Quest for a Pacific Port."
The Bolivian Research Review 1(1).
UNESCAP (2001). Roads and Road Transport. Review of Developments in Transport and
Communications in the ESCAP Region 1996-2001, UN Economic and Social Commission
for Asia and the Pacific.
US DoS (2002). Consular Information Sheet : Bolivia, US Department of State,
http://travel.state.gov/bolivia.html.
World Bank (2002). Project Information Document: Bolivia-Road Rehabilitation and
Maintenance Project. Washington DC, World Bank.
PARAGUAY
Aguirre, A. V. (1997). "Transport Infrastructure in Latin America." Inter-American
Development Bank Working Paper Series.
Castellón, R. P. (2001). Review of Recent Progress in the Development of Transit Transport
Systems in Latin America, UNCTAD: Geneva. UNCTAD/LDC/113.
EIU (2001). Paraguay Country Profile 2001. London, Economist Intelligence Unit.
EIU (2002). Paraguay Country Report. London, Economist Intelligence Unit.
Planet Latino (2002). Paraguay, Planet Latino, http://www.planetlatino.net/paraguay.htm.
- 163 -

UN DHA (1997). Paraguay El Niño Floods Situation Report No. 2. Geneva, UN Department
of Humanitarian Affairs. DHAGVA-97/0881.
US DoC (1999). Paraguay - Economic Trends and Outlook, U.S. Department of Commerce,
http://www.tradeport.org/ts/countries/paraguay/trends.html.
WTO (1997). WTO and Regional Commitments Shape Paraguay's Integration, World Trade
Organisation. WTO-PRESS/TPRB/1997.
- 164 -

APPENDICES
- 165 -

Map 1

HDI
rank
Table 1: Human Development - Rankings and Components
Country HDI HDI Components
HDI Country HDI
rank
GDP Life
/capita Expectancy Education
GDP
/capita
HDI Components
Life
Expectancy Education
Medium human development 117 Gabon 0.64 6,237 0.46 0.76
54 Mexico 0.80 9,023 0.79 0.84 118 Nicaragua 0.64 2,366 0.72 0.65
55 Cuba 0.80 0.85 0.90 119 Sao Tome and Principe 0.63 1,792 0.67 0.75
56 Belarus 0.79 7,544 0.73 0.92 120 Guatemala 0.63 3,821 0.66 0.62
57 Panama 0.79 6,000 0.82 0.86 121 Solomon Islands 0.62 1,648 0.72 0.68
58 Belize 0.78 5,606 0.82 0.86 122 Namibia 0.61 6,431 0.33 0.81
59 Malaysia 0.78 9,068 0.79 0.80 123 Morocco 0.60 3,546 0.71 0.50
60 Russian Federation 0.78 8,377 0.68 0.92 124 India 0.58 2,358 0.64 0.57
61 Dominica 0.78 5,880 0.80 0.86 125 Swaziland 0.58 4,492 0.32 0.77
62 Bulgaria 0.78 5,710 0.76 0.90 126 Botswana 0.57 7,184 0.25 0.75
63 Romania 0.78 6,423 0.75 0.88 127 Myanmar 0.55 1,027 0.52 0.75
64 Libya 0.77 7,570 0.76 0.84 128 Zimbabwe 0.55 2,635 0.30 0.81
65 Macedonia 0.77 5,086 0.80 0.86 129 Ghana 0.55 1,964 0.53 0.62
66 Saint Lucia 0.77 5,703 0.81 0.83 130 Cambodia 0.54 1,446 0.52 0.66
67 Mauritius 0.77 10,017 0.77 0.77 131 Vanuatu 0.54 2,802 0.72 0.35
68 Colombia 0.77 6,248 0.77 0.85 132 Lesotho 0.54 2,031 0.34 0.76
69 Venezuela 0.77 5,794 0.80 0.83 133 Papua New Guinea 0.54 2,280 0.53 0.55
70 Thailand 0.76 6,402 0.75 0.84 134 Kenya 0.51 1,022 0.43 0.72
71 Saudi Arabia 0.76 11,367 0.78 0.71 135 Cameroon 0.51 1,703 0.42 0.65
72 Fiji 0.76 4,668 0.73 0.90 136 Congo 0.51 825 0.44 0.75
73 Brazil 0.76 7,625 0.71 0.83 137 Comoros 0.51 1,588 0.58 0.49
74 Suriname 0.76 3,799 0.76 0.90
75 Lebanon 0.76 4,308 0.80 0.83 Low human development
76 Armenia 0.75 2,559 0.80 0.92 138 Pakistan 0.50 1,928 0.58 0.42
77 Philippines 0.75 3,971 0.74 0.91 139 Sudan 0.50 1,797 0.52 0.50
78 Oman 0.75 13,356 0.77 0.67 140 Bhutan 0.49 1,412 0.62 0.42
79 Kazakhstan 0.75 5,871 0.66 0.91 141 Togo 0.49 1,442 0.45 0.59
80 Ukraine 0.75 3,816 0.72 0.92 142 Nepal 0.49 1,327 0.56 0.48
81 Georgia 0.75 2,664 0.80 0.89 143 Laos 0.49 1,575 0.47 0.52
82 Peru 0.75 4,799 0.73 0.87 144 Yemen 0.48 893 0.59 0.48
83 Grenada 0.75 7,580 0.67 0.85 145 Bangladesh 0.48 1,602 0.57 0.40
84 Maldives 0.74 4,485 0.69 0.90 146 Haiti 0.47 1,467 0.46 0.50
85 Turkey 0.74 6,974 0.75 0.77 147 Madagascar 0.47 840 0.46 0.59
86 Jamaica 0.74 3,639 0.84 0.79 148 Nigeria 0.46 896 0.44 0.58
87 Turkmenistan 0.74 3,956 0.69 0.92 149 Djibouti 0.45 2,377 0.30 0.50
88 Azerbaijan 0.74 2,936 0.78 0.88 150 Uganda 0.44 1,208 0.32 0.60
89 Sri Lanka 0.74 3,530 0.79 0.84 151 Tanzania 0.44 523 0.43 0.61
90 Paraguay 0.74 4,426 0.75 0.83 152 Mauritania 0.44 1,677 0.44 0.40
91 Saint Vincent and the Gre0.73 5,555 0.74 0.79 153 Zambia 0.43 780 0.27 0.68
92 Albania 0.73 3,506 0.80 0.80 154 Senegal 0.43 1,510 0.47 0.37
93 Ecuador 0.73 3,203 0.75 0.87 155 Congo, DR 0.43 765 0.44 0.51
94 Dominican Republic 0.73 6,033 0.70 0.80 156 Côte d'Ivoire 0.43 1,630 0.38 0.44
95 Uzbekistan 0.73 2,441 0.73 0.91 157 Eritrea 0.42 837 0.45 0.46
96 China 0.73 3,976 0.76 0.80 158 Benin 0.42 990 0.48 0.40
97 Tunisia 0.72 6,363 0.75 0.72 159 Guinea 0.41 1,982 0.38 0.37
98 Iran, Islamic Rep. of 0.72 5,884 0.73 0.75 160 Gambia 0.41 1,649 0.35 0.39
99 Jordan 0.72 3,966 0.76 0.78 161 Angola 0.40 2,187 0.34 0.36
100 Cape Verde 0.72 4,863 0.75 0.75 162 Rwanda 0.40 943 0.25 0.58
101 Samoa (Western) 0.72 5,041 0.74 0.75 163 Malawi 0.40 615 0.25 0.65
102 Kyrgyzstan 0.71 2,711 0.71 0.87 164 Mali 0.39 797 0.44 0.37
103 Guyana 0.71 3,963 0.63 0.88 165 CAR 0.38 1,172 0.32 0.39
104 El Salvador 0.71 4,497 0.75 0.74 166 Chad 0.37 871 0.35 0.39
105 Moldova 0.70 2,109 0.69 0.90 167 Guinea-Bissau 0.35 755 0.33 0.38
106 Algeria 0.70 5,308 0.74 0.69 168 Ethiopia 0.33 668 0.31 0.35
107 South Africa 0.70 9,401 0.45 0.88 169 Burkina Faso 0.33 976 0.36 0.23
108 Syrian Arab Republic 0.69 3,556 0.77 0.71 170 Mozambique 0.32 854 0.24 0.37
109 Viet Nam 0.69 1,996 0.72 0.84 171 Burundi 0.31 591 0.26 0.38
110 Indonesia 0.68 3,043 0.69 0.79 172 Niger 0.28 746 0.34 0.16
111 Equatorial Guinea 0.68 15,073 0.43 0.77 173 Sierra Leone 0.28 490 0.23 0.33
112 Tajikistan 0.67 1,152 0.71 0.88 . Afghanistan . . . .
113 Mongolia 0.66 1,783 0.63 0.85
114 Bolivia 0.65 2,424 0.62 0.80 Average 0.61 3636.01 0.60 0.69
115 Egypt 0.64 3,635 0.70 0.62 Average over maritime 0.82 4902.48 0.80 0.93
116 Honduras 0.64 2,453 0.68 0.70 Average over landlocked 0.55 2420.03 0.50 0.67
Source: Human Development Report (2002)
Note: No data available for Afghanistan

Table 2: Human Development - Rankings and Components by Region
Southern Africa
East Asia
HDI Country HDI HDI Components
HDI Country HDI
HDI Components
rank
GDP Life
/capita Expectancy Education rank
GDP Life
/capita Expectancy
Education
107 South Africa 0.70 9401 0.45 0.88 70 Thailand 0.76 6402 0.75 0.84
122 Namibia 0.61 6431 0.33 0.81 109 Vietnam 0.69 1996 0.72 0.84
125 Swaziland 0.58 4492 0.32 0.77 124 India 0.58 2358 0.64 0.57
126 Botswana 0.57 7184 0.25 0.75 127 Myanmar 0.55 1027 0.52 0.75
128 Zimbabwe 0.55 2635 0.3 0.81 130 Cambodia 0.54 1446 0.52 0.66
132 Lesotho 0.54 2031 0.34 0.76 140 Bhutan 0.49 1412 0.62 0.42
153 Zambia 0.43 780 0.27 0.68 142 Nepal 0.49 1327 0.56 0.48
161 Angola 0.40 2187 0.34 0.36 143 Laos 0.49 1575 0.47 0.52
163 Malawi 0.40 615 0.25 0.65 145 Bangladesh 0.48 1602 0.57 0.40
170 Mozambique 0.32 854 0.24 0.37 Average over maritime 0.60 2472 0.62 0.68
Average over maritime 0.51 5211 0.32 0.63 Average over landlocked 0.49 1438 0.55 0.47
Average over landlocked 0.51 2111 0.30 0.73
Western Africa
Central Asia
HDI Country HDI HDI Components
HDI Country HDI
HDI Components
rank
GDP Life
/capita Expectancy Education rank
GDP Life
/capita Expectancy
Education
111 Equatorial Guinea 0.68 15073 0.43 0.77 60 Russia 0.78 8377 0.68 0.92
117 Gabon 0.64 6237 0.46 0.76 62 Bulgaria 0.78 5710 0.76 0.90
129 Ghana 0.55 1964 0.53 0.62 63 Romania 0.78 6423 0.75 0.88
135 Cameroon 0.51 1703 0.42 0.65 76 Armenia 0.75 2559 0.80 0.92
136 Congo 0.51 825 0.44 0.75 79 Kazakhstan 0.75 5871 0.66 0.91
141 Togo 0.49 1442 0.45 0.59 80 Ukraine 0.75 3816 0.72 0.92
148 Nigeria 0.46 896 0.44 0.58 81 Georgia 0.75 2664 0.80 0.89
152 Mauritania 0.44 1677 0.44 0.40 85 Turkey 0.74 6974 0.75 0.77
154 Senegal 0.43 1510 0.47 0.37 87 Turkmenistan 0.74 3956 0.69 0.92
156 Cote d'Ivoire 0.43 1630 0.38 0.44 88 Azerbaijan 0.74 2936 0.78 0.88
158 Benin 0.42 990 0.48 0.40 95 Uzbekistan 0.73 2441 0.73 0.91
159 Guinea 0.41 1982 0.38 0.37 102 Kyrgyzstan 0.71 2711 0.71 0.87
160 Gambia 0.41 1649 0.35 0.39 105 Moldova 0.70 2109 0.69 0.90
164 Mali 0.39 797 0.44 0.37 112 Tajikistan 0.67 1152 0.71 0.88
165 Central African Republic 0.38 1172 0.32 0.39 113 Mongolia 0.66 1783 0.63 0.85
166 Chad 0.37 871 0.35 0.39 . Afghanistan . . . .
167 Guinea-Bissau 0.35 755 0.33 0.38 Average over maritime 0.76 5661 0.74 0.88
169 Burkina Faso 0.33 976 0.36 0.23 Average over landlocked 0.72 2835 0.71 0.89
172 Niger 0.28 746 0.34 0.16
173 Sierra Leone 0.28 490 0.23 0.33
Average over maritime 0.47 2588 0.42 0.52
Average over landlocked 0.35 912 0.36 0.31
Eastern Africa
Latin America
HDI Country HDI HDI Components
HDI Country HDI
HDI Components
rank
GDP Life
/capita Expectancy Education rank
GDP Life
/capita Expectancy
Education
134 Kenya 0.51 1022 0.43 0.72 34 Argentina 0.84 12377 0.81 0.92
139 Sudan 0.50 1797 0.52 0.50 38 Chile 0.83 9417 0.84 0.90
149 Djibouti 0.45 2377 0.30 0.50 40 Uruguay 0.83 9035 0.82 0.92
150 Uganda 0.44 1208 0.32 0.60 73 Brazil 0.76 7625 0.71 0.83
151 Tanzania 0.44 523 0.43 0.61 82 Peru 0.75 4799 0.73 0.87
157 Eritrea 0.42 837 0.45 0.46 90 Paraguay 0.74 4426 0.75 0.83
162 Rwanda 0.40 943 0.25 0.58 114 Bolivia 0.65 2424 0.62 0.80
168 Ethiopia 0.33 668 0.31 0.35 Average over maritime 0.80 8651 0.78 0.89
171 Burundi 0.31 591 0.26 0.38 Average over landlocked 0.70 3425 0.69 0.82
Average over maritime 0.46 1311 0.43 0.56
Average over landlocked 0.37 853 0.29 0.48 Source: Human Development Report (2002)

Table 3: Cost of Trade - Ratio of Transportation and Insurance to Value of Exports
Country
Southern Africa
Ratio of Transport Costs
to Value of Exports
Country
Ratio of Transport Costs to
Value of Exports
Swaziland 0.02 Nepal 0.05
Angola 0.08 Laos 0.08
South Africa 0.08 Thailand 0.08
Namibia 0.09 Cambodia 0.11
Lesotho 0.12 India 0.13
Zimbabwe 0.15 Bangladesh 0.14
Botswana 0.16 Myanmar .
Zambia 0.17 Vietnam .
Mozambique 0.28 Bhutan .
Malawi 0.55 Average over maritime 0.12
Average over maritime 0.13 Average over landlocked 0.07
Average over landlocked 0.20
Western Africa
East Asia
Central Asia
Country
Ratio of Transport Costs
to Value of Exports
Country
Ratio of Transport Costs to
Value of Exports
Nigeria 0.05 Russia 0.00
Sierra Leone 0.09 Ukraine 0.02
Cameroon 0.09 Kazakhstan 0.04
Cote d'Ivoire 0.11 Romania 0.05
Mauritania 0.12 Turkey 0.06
Guinea 0.14 Azerbaijan 0.07
Gabon 0.15 Georgia 0.08
Congo 0.17 Moldova 0.10
Senegal 0.18 Bulgaria 0.11
Ghana 0.18 Kyrgyzstan 0.13
Gambia 0.18 Turkmenistan 0.15
Togo 0.21 Mongolia 0.16
Central African Republic 0.26 Armenia 0.29
Burkina Faso 0.27 Afghanistan 0.35
Niger 0.28 Tajikistan .
Guinea-Bissau 0.30 Uzbekistan .
Mali 0.35 Average over maritime 0.05
Benin 0.37 Average over landlocked 0.16
Chad 0.51
Liberia .
Equatorial Guinea .
Average over maritime 0.17
Average over landlocked 0.33
Eastern Africa
Latin America
Country
Ratio of Transport Costs
to Value of Exports
Country
Ratio of Transport Costs to
Value of Exports
Kenya 0.13 Brazil 0.08
Tanzania 0.18 Argentina 0.08
Djibouti 0.21 Uruguay 0.10
Ethiopia 0.29 Peru 0.11
Sudan 0.29 Chile 0.11
Burundi 0.31 Paraguay 0.17
Uganda 0.35 Bolivia 0.21
Rwanda 0.51 Average over maritime 0.10
Eritrea . Average over landlocked 0.19
Somalia .
Average over maritime 0.20
Average over landlocked 0.36
Source: IMF Balance of Payments Statistics (2001); World Development Indicators (2002); Transport Costs & Exports have been matched by year.

Table 4: Exports per Capita (2000 current US$)
Southern Africa
East Asia
Country Exports per Capita Country Exports per Capita
Swaziland 927 Thailand 1349
South Africa 854 Bhutan 179
Angola 606 Cambodia 106
Zimbabwe 178 India 63
Lesotho 126 Nepal 57
Zambia 88 Bangladesh 50
Malawi 43 Laos .
Mozambique 32 Myanmar .
Botswana . Viet Nam .
Namibia . Average over maritime 391.9
Average over maritime 497.6 Average over landlocked 117.9
Average over landlocked 272.5
Western Africa
Central Asia
Country Exports per Capita Country Exports per Capita
Equatorial Guinea 2784 Bulgaria 859
Gabon 1484 Russian Federation 791
Congo, Rep. 837 Turkey 746
Cote d'Ivoire 268 Kazakhstan 722
Cameroon 183 Romania 557
Nigeria 169 Turkmenistan 534
Gambia, The 155 Ukraine 394
Mauritania 145 Azerbaijan 266
Senegal 140 Mongolia 265
Ghana 132 Georgia 226
Guinea 105 Moldova 150
Togo 96 Uzbekistan 137
Guinea-Bissau 57 Tajikistan 130
Benin 53 Armenia 117
Mali 53 Kyrgyz Republic 115
Central African Republic 34 Afghanistan .
Chad 30 Average over maritime 595.66
Niger 26 Average over landlocked 271
Sierra Leone 22
Burkina Faso 21
Liberia .
Average over maritime 442.12
Average over landlocked 33
Eastern Africa
Country Exports per Capita Country Exports per Capita
Djibouti 390 Chile 1477.1
Kenya 91 Uruguay 1140.4
Sudan 62 Argentina 829.8
Tanzania 39 Brazil 380.0
Uganda 28 Peru 333.0
Eritrea 23 Paraguay 277.5
Rwanda 18 Bolivia 174.5
Ethiopia 15 Average over maritime 832.07
Burundi 9 Average over landlocked 225.98
Somalia .
Average over maritime 121.17
Average over landlocked 17.54
Source: World Development Indicators (2002)
Latin America

Table 5: Degree of Landlockedness
Measure of Distance
Proportion TC's
of paved proportion of
roads paved roads
(index) (index)
Paved Road
Quality
(index)
Paved Road
Quality of
Neighbours
(index)
Normalized Measures of Civil and External Conflict (1981-2001)
TC's
TC's
Length & length &
Length & length & TC's length Length & severity of severity of
severity of severity of & severity of severity of external external
civil conflict
(index)
civil
conflict
civil conflict
(index)
external
conflict
conflict
(index)
conflict
(index)
Country
Freight Costs
(index)
Export volume
(index)
Distance to Port
(km)
Afghanistan 0.38 1960 0.01 1.00 0.28 0.76 0.57 0.88 0.97
Armenia 0.51 0.08 693 0.36 0.00 0.78 0.00 0.29 0.74 0.60
Azerbaijan 0.92 0.15 870 0.70 0.52 0.88 0.29 0.74 1.00
Burundi 0.47 0.00 1254 0.37 0.16 0.72 0.49 0.81 0.00 0.00 0.00 0.00
Burkina Faso 0.54 0.01 1154 0.41 0.68 0.48 0.12 0.19 0.02 0.19 0.14 0.59
Bolivia 0.64 0.16 414 0.07 0.22 0.44 0.16 0.00 0.26 0.00 0.00 0.00 0.00
Bhutan 775 0.00 0.00 0.97 0.00 0.00 0.00 0.00
Botswana 0.75 1.00 905 1.00 1.00 1.00 0.00 0.91 0.00 0.00 0.00 0.00
Central African Republic 0.55 0.03 1518 0.01 0.00 0.53 0.27 0.00 0.01 0.00 0.02 0.21 0.82
Ethiopia 0.50 0.00 781 0.33 0.36 0.69 0.74 0.98 0.06 0.46 0.55 0.87
Kazakhstan 0.96 0.47 3750 0.61 0.07 0.00 0.22 0.00 0.00 0.00 0.00
Kyrgyzstan 0.81 0.10 3600 0.61 0.07 0.00 0.00 0.00 0.05 0.36 0.74
Laos 0.89 0.07 620 0.63 0.61 0.46 0.06 0.46 0.07 0.44 0.45
Lesotho 0.81 0.10 575 0.36 1.00 0.72 0.19 0.91 0.99 0.00 0.00 0.00
Moldova 0.86 0.15 170 1.00 0.33 0.02 0.19 0.00 0.00 0.00
Mali 0.38 0.04 1225 0.36 0.41 0.81 0.47 0.33 0.08 0.51 0.02 0.21 0.60
Mongolia 0.75 0.22 1693 0.45 0.61 0.07 0.00 0.22 0.00 0.00 0.00 0.00
Malawi 0.00 0.03 803 0.40 0.21 0.76 0.34 0.00 0.46 0.00 0.00 0.00 0.00
Niger 0.52 0.02 1057 0.52 0.84 0.73 0.37 0.00 0.01 0.00 0.00 0.00 0.00
Nepal 0.95 0.04 1160 0.95 0.58 0.00 0.54 0.97 1.00 0.00 0.00 0.00
Paraguay 0.73 0.34 1022 0.30 0.87 0.16 0.19 0.00 0.00 0.00 0.00
Rwanda 0.08 0.00 1867 0.11 0.26 0.62 0.23 0.84 0.51 0.87 0.36 0.78 0.58
Swaziland 1.00 0.89 193 0.65 0.51 0.52 0.19 0.00 0.92 0.00 0.00 0.00 0.00
Chad 0.08 0.02 1669 0.00 0.00 0.00 0.27 0.62 0.01 0.06 0.98 0.99 0.21
Tajikistan 0.09 3100 0.61 0.07 0.67 0.50 0.87 0.43 0.82 0.83
Turkmenistan 0.77 0.27 1700 0.00 0.76 0.00 0.00 0.00 0.00
Uganda 0.39 0.02 1187 0.34 0.16 0.40 0.47 1.00 0.15 0.64 0.26 0.72 0.56
Uzbekistan 0.12 2950 0.00 1.00 0.00 0.29 0.74 0.89
Zambia 0.72 0.07 1975 0.40 0.47 0.55 0.91 0.00 0.38 0.00 0.00 0.00 0.00
Zimbabwe 0.76 0.20 464 0.36 0.72 0.86 0.82 0.00 0.61 0.00 0.26 0.72 0.68
TC = Transit Country
Normalized Measures of Trade
Normalized Measures of Infrastructure Quality
Note: All variables, except distance to port, have been nornalized to a 0-1 scale with 1 as the "best" score
Sources: Trade Data: IMF BOPS (2001), WDI (2002)
Distance Data: Various
Infrastructure Data: Canning (World Bank) (2002)
Conflict Data: PRIO (2002)

Figure 1: Human Development Indicator (HDI):
Landlocked Countries vs. their Regional Neighbours
Ratio of Country HDI / Average Regional HDI
1.2
1
.8
.6
Uganda
Rwanda
Ethiopia
Mali
CAR
Chad
Burkina Faso
Burundi
East
Africa
(0.42)
Niger
West
Africa
(0.44)
Swaziland
Botswana
Zimbabwe
Lesotho
Zambia
Malawi
Southern
Africa
(0.51)
Bhutan
Nepal
Laos
East
Asia
(0.56)
Average Regional HDI
Belarus
Armenia
Kazakhstan
Turkmenistan
Azerbaijan
Uzbekistan
Kyrgyzstan
Moldova
Paraguay
Tajikistan
Mongolia
Central
Asia
(0.74)
Bolivia
South
America
(0.77)
Figure 2: Exports per Capita:
Landlocked Countries vs. their Regional Neighbours
3
a
Ratio of Exports/capita of landlocked country
to the regional average exports/capita
2
1
0
Uganda
Swaziland
Kazakhstan
Turkmenistan
Azerbaijan
Mongolia
Rwanda
Zimbabwe
Ethiopia
Moldova
Uzbekistan
Lesotho Tajikistan
Burundi Mali Zambia Armenia
Central African Nepal Kyrgyzstan
Chad
Niger
Malawi
Burkina Faso
Southern Africa ($367.2)
Eastern Asia ($327.9)
Paraguay
Bolivia
Eastern
Africa
($37.0)
Western
Africa
($217.1)
Southern
America
($ 667.5)
Central Asia ($381.9)
Exports per capita (US$), by region

Figure 3: FDI per Capita:
Landlocked Countries vs. their Regional Neighbours
2
Uganda
Ratio of FDI/capita of landlocked country
to the regional average FDI/capita
1.5
1
.5
0
Rwanda
Ethiopia
Burundi
Laos
Nepal
Chad
Mali
Burkina Faso
Central African
Niger
Swaziland
Lesotho
Botswana
Zambia
Malawi
Zimbabwe
Bolivia
Paraguay
Eastern
Africa
($5.4)
Eastern
Asia
($12)
West
Africa
($18.6)
Southern
Africa
($49.4)
Latin
America
($119.4)
FDI per capita (US$), by region
(logarithmic scale)