Trade Infrastructure and the Budget

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Title: Trade Infrastructure and the Budget
Author: Sengwaketse, Margaret; Maiketso, Johnson
Abstract: Infrastructure facilitates trade by reducing trade costs, that is, the costs of moving goods and services from an exporting country (place of production) to the importer (point of consumption). Empirical evidence suggests a strong link between infrastructure and trade1. Infrastructure includes both physical infrastructure (roads, bridges railway lines, energy, etc.) and soft infrastructure such as business environment, border procedures, logistics, etc. (UNCTAD, 2009). Addressing trade costs is an imperative for landlocked countries. Due to their long distances and lack of direct access to the sea, landlocked countries face particular challenges such as high transport costs, poor infrastructure, time needed to trade and inadequate logistics (Hallaert, et al., 2011). All these contribute to low trade performance in landlocked countries 1 See Ismail and Mahyideen (2015) for a review on literature on trade and infrastructure. and make these countries a less favourable destination for foreign direct investment. Botswana has improved its logistics performance ranking from 68 in 2012 to 57 in 2016 (out of 160 countries), and compares favourably with other countries in the region. However, its trading across borders ranking and the logistics quality and competence rank has remained unchanged at 75 (out of 160 countries) between 2012 and 2016, and this suggests that more needs to be done to improve quantity and quality of trade-related infrastructure.
Description: While every attempt is taken to ensure the accuracy of the information contained in this document, no responsibility can be assumed for any action based thereon. The Botswana Institute for Development Policy Analysis (BIDPA) is an independent non-government research institute with two main areas of interest: development policy analysis and capacity building. BIDPA functions include carrying out research and consultancy in the field of economic and social policy, as well as monitoring the performance of the economy and the management of public policy. BIDPA’s clients include government, international organizations, NGO’s and private companies.
Date: 2018-06

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