Transport and Logistics Services - From achieving development goals to implementing strategic initiatives

The Gulf Cooperation Council (GCC) is experiencing tremendous growth, and the transport sector, a strong growth driver in the GCC's economies, continues to promise the highest economic dividends for investors. In recognition of this fact, the Qatar Chamber of Commerce and Industry, the General Secretariat of the Cooperation Council of the Arab States of the Gulf and the Federation of GCC Chambers are proud to hold The 1st GCC Transport and Logistics Conference - Vision 2020 in Doha, Qatar. The conference's foremost objective aims to highlight the key role of the transport sector in leading the regional drive to achieve the highest targets of development goals and strategies of all GCC States.

The conference will be a first-class business event with an intention to introduce the economic pillars to build a successful investment future in the GCC. It will be a forum for discussions of the opportunities and challenges facing the economies of the Arab Gulf States in light of the trade liberalization initiatives in the world and the start of the Gulf Common Market by early 2008.

The conference will focus on the transport sector, including maritime, land and civil aviation service industries. Logistics services represent the nerve of Gulf and international businesses looking for long-term opportunities in the GCC and will be the second major theme in the conference. Most importantly, the conference aims to reflect that the strength and efficiency of the GCC transport industry are necessary for the growth, prosperity and continuity of all other industries throughout the region.

Transport and logistics services are central to regional trade and to the exchange of goods and services, knowledge and education as well as cultures and civilizations for the GCC States. Within that context, the biggest challenge confronting the GCC States today is the building of road networks, harbors, airports and state-of-the-art transportation networks that are capable of supporting and sustaining the region's tremendous and fast-moving development. The pressing question ultimately becomes of the mechanisms to creating economic entities capable of managing this sector and directing its resources amid the fierce competition among local and international companies and corporations.

To address these challenges, The 1st GCC Transport and Logistics Conference with its diverse agenda will focus on the importance of the transport sector in accomplishing comprehensive and continuing development for the GCC States. The role of transport and logistics in enabling successful implementation of the Gulf Common Market, while supporting the integration of the public and the private sectors in creating a strong, competitive transport sector, will be discussed during the event. The conference will also tackle the most important challenges facing the industry concerning law or legislation, technical and infrastructure frameworks and investment capabilities.

In such an event, investment opportunities of high economic dividends will be presented, namely in projects in the railroad, port and airport sectors. Proposals to create integrated Gulf companies for land and sea transport services will be included in the workshops of the conference.

Through the presentations and discussions of projects and investment proposals, the conference will conclude with viable recommendations that should evolve with an integrated framework for the future of the transport sector in the GCC. The conference will present this sector as a valuable bridge of communication and contact among the GCC States, as an instrumental pillar in the success of the Gulf Common Market, and as a vital economic driver in making the GCC the center for regional and international transport and logistics services.

In The Common Gulf Market, transport services are among most important support services of the economy

Upon its launching during the 28th summit of the GCC states held in the State of Qatar in January 2008, the Gulf Common Market (GCM) has entered its implementation phases in preparation for the practical launching of common market initiatives under the common market system.

Each Member State of the GCC is implementing the common market determination in accordance to state-level constitutional and legal system. Within the GCM, governmental systems and concerns are grouped into ten common market domains to include the following sub-systems: Transportation and accommodation; employment in government and private sector entities; social security; pension plans; practicing careers and handicrafts; all economic, investment and service activities; property sales and purchases, movement of capital, customs and taxation; share trading and purchasing; company establishment; and education, health and social service benefits.

Potential for opportunity

The implementation of the Gulf Common Market will generate opportunities for citizens of the GCC countries, as well as for national corporations and establishments, since the GCC countries are experiencing a period of accelerated economic development and growth. This growth resulted in its Gross Domestic Product (GDP) reaching approximately 750 billion USD in 2007, double the amount recorded five years ago.

The conference will be an activity to discuss the promising business opportunities, especially in the field of transport services integration for all GCC citizens seeking to build on and benefit from an ever-evolving, ever-prosperous economic powerhouse.

Now, more than ever before, the Gulf Common Market can help citizens profit from opportunities that are available in every GCC State. The endeavor also aims to achieve economic integration among the GCC States, in addition to championing absolute equality in the treatment of all national citizens related to the common market domains covered by GCM, thus to overcome all difficulties and barriers that could hinder its implementation.

The role of the private sector: it's contribution to the development of transport infrastructure and logistics

Ultimately, the GCC States are embarking on initiatives to foster economic integration. To reach such a target, many measures are in the planning: Implementing a free trade area; strengthening the implementing of the GCC Customs Union (Gulf Customs Union) supported by a common market system (Gulf Common Market); implementing steps towards a monetary union and the issuance of a unified Gulf currency; and the integration of transport and logistic services modes. All of these measures would increase the dividends of the common market, ease the movement of GCC nationals (as individuals and workers) throughout the GCC, and promote inter-regional investment as well as the mobility for national business persons and enterprises. Opening and unifying implementation mechanism of the Gulf Market will contribute to enhancing the competitiveness, growth and economic integration of the GCC States.

Governments of the GCC States are in support of an enabling environment for a stronger private sector role in economic development in the GCC. By facilitating the development of an integrated transport infrastructure and logistics network in the GCC and by implementing the Gulf Common Market, business people have wider opportunities to contribute to economic growth and prosperity. One of the effective approaches to enhancing the partnership between the public and private sectors will be through efficient transport and logistics services; the application of common market measures; the removal of barriers that might obstruct the integration of respective transport infrastructure and service entities and enterprises; and through the mechanization of the Gulf Common Market and subsequent economic and social determinations.

Applicable solutions to eliminate barriers for investment that may hinder development of the GCC transport sector

To enhance private sector participation in the development of the GCC transport sector, the General Secretariat of the Cooperation Council of the Arab States of the Gulf cooperated with the Federation of GCC Chambers and other private sector concerns to study barriers to interregional investment and to recommend measures for effective removal of these barriers. The Council's General Secretariat has been also working on implementing specific recommendations presented by public and private entities requesting applicable solutions for the difficulties confronting investors and operators in the transport sector. These difficulties include: Basic infrastructure limitations, (some of which include the transport sector); impediments to inter-regional (GCC-level) investments; bureaucratic constraints; inconveniences of obtaining project licenses; long durations on clearing export and import shipments; inadequate trade dispute resolutions; absence of competition legislation; lack of laws and legislation protecting competition; complexity of obtaining visas and regulatory procedure as well as delays on borders; in addition to the multitude of authorities in charge of investment registration and licensing, including the consequential conflicts resulting from double responsibility and power sharing.

Law and legislative impediments

Governments of the GCC States are studying appropriate measures to remove legal and regulatory impediments affecting the development of the transport sector. They are also motivating private sector collaboration to develop the necessary transport infrastructure and to invest in providing the transport-related support services.

Governments of the GCC States realize the negative impact of legal and regulatory constraints reflected by the weakness of laws on dispute resolution; absence of legislation that deals with competition; lack of investment protection; weak protection of intellectual property rights and patents; inadequacy of the tax system; lack of transparency in certain regulations and procedures. All of these obstacles exist in addition to the absence of efficient economic accountability of the concerned governmental bodies; weak economic incentives and privileges provided to investors; delays in allowing foreign corporations to be listed on the regional financial markets; and imposing conditions on companies and institutions to set up offices. The interference of some countries in setting the prices for certain commodities and services in addition to the lack of skilled labor in the Gulf market are significant impediments to be overcome, as well.

The conference will be a venue to discuss steps taken to overcome these barriers and additional measures in the planning to remove all obstacles in the GCC transport and logistics services sectors.

Among the findings in the General Secretariat's study on barriers to investments that proved to be cumbersome were: The insufficient development of exports; lack of strategies and procedures to promote investment advantages to American entities; ineffective participation of the private sector in political decision-making; absence of a clear strategy that supports institutional and small-business establishment and growth; lack of a clear privatization strategy; and the scarcity and insufficiency of available funding sources. The study concludes that above-mentioned problems were only compounded due to the non-existence of appropriate infrastructure to activate bilateral trade and achieve balanced regional development and due to underdeveloped services related to transport and insurance.

The GCC States are actively seeking the proper means to enforce dispute resolution policies and procedures and to finding alternative ways to control trade conflicts, which includes assessing the arbitration clause, and procedures, and related jurisdictional authorities. Governments of the Gulf States are studying the implementation of the electronic arbitration system of the FDIC and are examining the lack of arbitration centers all over the GCC.

The foundation of progress and development, and the vision of the conference

Conference participants will agree that the transport sector is the basis for strong and sustainable economic development by permitting the efficient flow of individuals, goods and services, all while promoting social progress. Essentially, transportation affects the lives of individuals, citizens and nations as a whole.

The 1st GCC Transport and Logistics Conference will reflect a realization that the GCC States have become major hubs for regional and international business ventures and investments. Effectively, the GCC States are developing comprehensive, modern highways that connect cities to the suburbs; national and international trade ways to highways that transverse the GCC States. Major ports in Gulf States will also be a source of permanent and continuous productivity with rapid clearance; the railways will constitute profitable means for transporting heavy shipments and many passengers; thus relieving highway traffic; and the airports will support activities that will spearhead the vital tourism and air freight industries.

Bolstered by a completely integrated transportation system, the GCC's commercial and industrial sectors will grow, and economic progress will prevail among all the Gulf countries. The health, education and social services sectors will expand and prosper to benefit both GCC citizens and residents, as well.

The Public and the Private sectors- from yesterday to today

In the past, the contribution of GCC governments to the public and private sectors was limited to offering minimal public services to the majority of the economic sector. Since then, the private sector has overcome this deficiency by gaining the experience and financial resources necessary for improving its capacity to provide efficient and high quality services.

Numerous private sector investors are trying to invest in government projects that include infrastructure and service delivery in the varying domains of transport. Due to past restrictive policies and legislation instruments governing the participation of private investors, potential funds were left unused, leading slow paced growth and development in certain potential sectors of the national economies.

Lately, the GCC States have agreed to remove impediments hindering the effective participation of the private sector as an instrumental player in economic development, especially in the advancement of the GCC transportation industry. The Governments of the GCC States have reduced the cumbersome licensing procedures and requirements significantly. Today, private investors can get licenses through acceptable, more convenient means. This improvement is just the beginning as the GCC States plan to permanently revise legislation instruments and regulatory procedures governing private investments and the participation the private sector in the economy.

On the conference's agenda will be topics related to assessing and supporting investors in the GCC transport and logistics services sector.

In response to these challenges, the conference will include discussions and workshops that will call for the collaboration of all private sector organizations and operators in the transport sector to put that sector on the right course of development and to lead the way to faster and stronger economic integration in the GCC. The conference will highlight efforts by the GCC Sates to capitalize on their strategic geographical locations that connect the East and the West through a network of roads, airports, ports and railroads, thus, competing with the most advanced countries in this field and attracting tremendous private investment.

Transparency and open competition

In addition to removing the obstacles facing the private sector, the GCC States have committed to continue collaborating with the private sector and to open local markets in most industry sectors to local and international investments. GCC Economic plans aim at: Creating the appropriate competitive environment to support healthy economic growth rates; increasing employment opportunities; fostering economic expansion and diversification; and enhancing human capital resources. As part of the reform efforts in the GCC, the GCC States plan to privatize more state enterprises service organizations in the transport sector so as to stimulate competition and encourage more project investments by small and medium-sized enterprises of the GCC.

Promoting competition and providing the legislative state-level and regional frameworks for competition will motivate the private sector to invest in the delivery of complementary transport services that will improve efficiency and competency standards, ease the pressure on state budgets to finance the infrastructure, and encourage the non-oil export / import business sectors to prosper and to engage in more international business activities in the GCC markets.