ISLAMABAD: South Asia has had outstanding economic growth in the last two decades and could grab a bigger share of international trade, but inefficiencies in its ports threaten to hinder progress and stop it from matching other regions like East Asia, said a new World Bank report ‘Competitiveness of South Asia’s Container Ports’ released on Thursday.

The analysis of the report shows that governments interested in increasing the competitiveness of their exports need to focus on improving the performance of their port sector.

While some South Asian countries took great strides to improve performance at container ports amid a worldwide boom in sea-borne trade, the region as a whole has lagged and its ports are seen as expensive and slow, the report said.

The comprehensive World Bank study of the status, structure and deficiencies of the region’s container ports found that if ports in Bangladesh, India and Pakistan had been as efficient as those of Sri Lanka it could have cut shipping costs by up to nearly 9 per cent, boosting the value of the region’s exports by up to 7pc.

The average value of Pakistan’s exports to US would have been 0.5 to 7.0pc higher if the port sector had been efficient said the report, which recommends building greater private sector participation, improved governance of port authorities and creating more competition within and between ports of the South Asian region.

The report says that capacity at Pakistani ports has been consistently adequate over the past 20 years. At Karachi three container terminals were developed, partly through private sector investment. The Karachi International Container Terminal was completed in 1998, and the Pakistan International Container Terminal was completed in 2004, each at a cost of about $150 million.

The South Asian container traffic grew steadily between 2000 and 2013, increasing by a factor of more than four. Pakistan’s container throughput grew fastest, increasing at a compound annual growth rate of 15pc. Exports of textiles are the major drivers of increases in throughput in Pakistan, via Port of Karachi and Port Qasim.

Karachi Port handled 61pc and Port Qasim 39pc of the country’s throughput in 2012-13. In recent years both ports dredged their channels to accommodate ships with 13-meter drafts.

The Karachi Port Trust is currently constructing a deep-water container terminal at the entrance to the port, with a water depth of 16–18 meters, to be operated by Hutchison Ports, a subsidiary of Hong Kong-based investment company Hutchison Whampoa Ltd, and a major port investor, developer and operator.

The report says that potential gains associated with improving port performance in South Asia are huge. Trade in South Asia almost doubled between 2000 and 2014, rising from 29pc to 47 pc of GDP. It relies almost exclusively on sea transport, with about 75pc of trade by value moving through ports.

Published in Dawn, April 29th, 2017