Reducing Supply Chain Barriers & Impact on GDP

Enabling Trade: Valuing Growth Opportunities (a new report released by the World Economic Forum in collaboration with Bain & Company and the World Bank) finds that if all countries reduce supply chain barriers halfway to global best practice, global GDP could increase by 4.7% and world trade by 14.5%, far outweighing the benefits from the elimination of all import tariffs.
 
Some examples from the 18 country and sector case studies in the report include the following:
  • In Brazil, managing customs paperwork for exports of agricultural commodities can take 12 times longer than in the European Union (a full day versus a couple of hours).
  • Poor quality infrastructure services can increase the input material costs of consumer goods by up to 200% in certain African countries.
  • Obtaining licenses and lack of coordination among regulatory agencies in the US lead to delays in up to 30% of chemical shipments for one company – each late shipment costs US$ 60,000 per day.
  • In Russia, product testing and licensing in the computer sector can lead to high administrative costs and delay time-to-market anywhere from 10 days to eight weeks.
  • Eliminating supply chain barriers in the South East Asian rubber market could reduce carried inventories by 90 days, representing a 10% reduction in product cost.
  • India’s Preferential Market Access regulation, which provides preference for locally produced high-tech products in government procurement, could increase costs by 10%, over the cost of imports.
  • Easing regulatory compliance of international trade that SMEs face when selling through the Internet could increase cross-border SME sales by 60-80%.
The complete report is available on;


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