THE PHILIPPINES has improved in terms of shipping connectivity, moving up five places to 62nd alongside developing states which have cornered an even larger share of seaborne trade services, a United Nations (UN) agency said in a report issued last week.
The country, however, is at risk of falling behind as other nations have made swifter and more consistent improvements in the Liner Shipping Connectivity Index (LSCI).
The UN Conference on Trade and Development (UNCTAD) thus underscored the role of public-private partnerships (PPP) in building and upgrading infrastructure for lower income economies with limited public funds.
World seaborne trade grew by 7.69% to 8.4 billion tons in 2010 from a year earlier, showing rapid recovery from a decline posted during the 2009 global trade collapse, UNCTAD’s 2011 Review of Maritime Transport states.
Developing countries continued to account for more than half of total sea trade volume — 60.2% and 55.7% of goods loaded and unloaded last year — as shipping from these areas have grown beyond raw materials exports. Asian developing countries, particularly, were noted for leading an expansion in shipping services.
“[D]eveloping countries are not only users of shipping services but increasingly participants in the provision of these services, through the operation of seaports, the construction of ships, containers, and in the transport of equipment,” the review read.
“In shipbuilding (China and the Republic of Korea), scrapping (Bangladesh), and the provision of seafarers (Philippines), developing countries now account for more than three-quarters of the world’s supply,” it continued.
The dominance of developing countries in shipping indicates that the developed world is no longer the major driver of global economic growth, the UN agency said.
Shipping connectivity, the UNCTAD explained, is an important factor of trade costs and consequently, a country’s competitiveness.
The Philippines, which scored 18.56 points in the latest LSCI index, posted improvements from its 2010 mark of 15.19. The progress, however, is still below the country’s peak 30.26 rating in 2008.
Addressing transport infrastructure gap requires massive investments from the public sector but the UNCTAD noted the limited financial capacity of developing economies. PPPs were thus cited as an effective means of developing infrastructure, but the agency saw poor utilization of this scheme.
“PPP transport projects have been fluctuating… from 1990 to 2010, with a peak in 2006 reaching about $32 billion,” it said.
“In the first quarter of 2010, the trend of investment commitments to new transport projects had not changed compared with the first quarter of 2009. An estimated 440 projects in 61developing countries were reported to be at the final tender stage, or had been awarded contracts, or were seeking financing, or were yet to start looking for finance,” it said.
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By: E. J. Diaz
Source: Business World, Nov. 28, 2011
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