Thread by @PoorvaKarkare

1/9 Why are trade and transport costs high in #Malawi despite efforts to reduce them?
Just out: our #PEA study mapping (f)actors that shape the use of #Nacala and #Beira corridors connecting Malawi 🇲🇼 to ports in #Mozambique 🇲🇿 @BruceByiers @Lustarnde 👉 bit.ly/3iBZmq2

2/9 International partners are keen to invest in trade and transportation, with a view to promoting socio-economic development in the region, but it is important to understand the context in which this development takes place.

3/9 There is an assumption that the problem is lack of trade facilitation hardware and software - but structural issues and their interaction with cross-border and local politics is also important. Thus transport is not just technical, but also a political issue.

4/9 🇲🇼 is a small market - slow growing, with agricultural exports that are better handled at #Beira port transported by road than by the railway to #Nacala. Limited volume and irregular service do not make the railway an attractive option, even though it’s cheaper.

5/9 Longstanding cooperation agreements exist on paper but state-business relations in both countries as well as informal rules of the game shape the real dynamics and potential entry points for corridor reform

6/9 Key political and business interests around Beira seem to have somewhat aligned through time. Beira = transit hub serving the wider region, managing to professionalise. This is not the case in Nacala where ownership issues and politics have mingled.

7/9 Increasing focus on mineral extraction in 🇲🇿 undermines incentives to improve Nacala rail efficiency. Gas and related “presource curse” (unhinging of economy by the mere prospect of future resource exports) may make things worse as unproductive rents are sought after.

8/9 Threats on the horizon - conflict in the North which could seriously derail any progress to establish 🇲🇿 as a stable gateway to serve the hinterlands, not to mention #COVID19 related trade disruptions.

9/9 So what implications for donors funding trade facilitation? Stimulate greater cross-border collaboration - identify key bottlenecks, align state-business relations towards greater efficiency. This may be difficult w/o political champions. For more
👉 bit.ly/3iBZmq2