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Appendix
B Mr. President, Ladies and Gentlemen: My name is Mohamed Mouknass. I am a member of the Economic Planning board at the Ministry of Finance. Our task force is to set up a strategy to privatize the Port of Nouakchott. It is a pleasure to be with you today, and I would like to thank you very much for the invitation. I have always believed it is important for the Economic Planning Board to exchange views and to share information with the Parliament to support the privatization of the Nouakchott Port. Before I begin my testimony I would like to introduce two important people from the Economic Planning Board at the Ministry of Finance who come to testify with me today. Mr. Sidi Heiba is the chairman of the Mauritani’s Dock Workers Union, and Mr. Jean Francois is the Representative of the shipping company DELMAS. Mr. President, members of the Parliament, Port activities play an important role in the development of any coastal country’s economy, especially an export-oriented economy like Mauritania’s. If a port is efficient and reliable, the overall economy of that country is positively affected. An efficient port increases trade at the national and regional levels, and directly or indirectly creates jobs. Since its inauguration in 1984, the Port of Nouakchott has been run as a publicly owned monopoly. Unfortunately, the absence of competition led the port to become inefficient and overstaffed. It has lost share market to other West African ports like Dakar and Abidjan. Moreover, the lack of investment in new port technologies have raised costs and affected port productivity. Ports are being steadily transformed by the evolution of the global market. Products that pass through ports must now compete in the global economy. Moreover, services must reflect international levels of productivity and cost. Many transnational corporations scour the world for least-cost inputs, and ports are an integral part of manufacturing and distribution systems. One of the port’s main functions is to act as an interface between ocean and inland transports and to provide complementary services to such loading and dispatch operations as storage, processing and distribution. To integrate Nouakchott Port to the global market, Mauritania’s government must propose a privatization plan. The aim of this reform is to attract new investments for the modernization of the port infrastructure and improve the port’s productivity and competitiveness. For example, the export of fish from Mauritania, Morocco and Senegal to the European market creates competition between African fishing companies. If the cost of any of the ports or facilities is excessive, or if port productivity is low, that port loses its European market. Let’s assume the decision by the government of Mauritania to restructure Nouakchott Port through private-sector participation helps cut cost handling of fish exports. European brokers in London or Madrid will probably ask fish producers in Mauritania to provide greater volumes once they realize that fish can be obtained relatively cheaply from Mauritania. The European fish brokers will continue to buy fish from Mauritania until volumes are insufficient to satisfy the European market demand. Growth in the demand for Mauritania’s fish will increase demand for workers, fish packing services, land and ocean transport services, cargo-handling services at port, and the entire economy. The government has negotiated an agreement with the labor unions. The objective of this negotiation is to reduce redundant labor and to free the Nouakchott Port from social and noncommercial obligations. The government has proposed for redundant workers an attractive voluntary resignation bonus formula, an early retirement plan, and a training program for those who want to shift to another sector. In conclusion, I want to thank you for the opportunity to testify on behalf of the Economic Planning Board in support of the passage of the Nouakchott Port Privatization Bill. Thank you. Appendix
C Francois
Delmas, Chairman Dear Company Chairman, The Ministry of Finance of Mauritania invites you to participate in the privatization of the Port Authority of Nouakchott. DELMAS Shipping Company has a strong presence on the West African coast. By participating in port operations, your company will control the entire distribution system, from port terminals to warehouses to customers. Customers want access by land and sea to a port that works quickly and expeditiously, enabling them to reduce export, import and transport costs. Bringing your experience in maritime transport to Mauritania will lower the port of Nouakchott’s cost and will hasten the loading and handling of products. Opening the Nouakchott Port operations to foreign shipping companies will benefit your businesses in Mauritania as port operations transfer from a public owned monopoly to the private sector. Introducing private sector participation in port operations will increase the competition and efficiency of the Port of Nouakchott. Furthermore, a landlocked country, Mali, is closer to Nouakchott Port than the Port of Abidjan or the Port of Dakar. Shipping through the Nouakchott Port to Bamako will be quicker and cheaper than shipping to other ports in West Africa. For further information on the Nouakchott Port privatization, please contact Mr. Mohamed Mouknass at the Economic Planning Board in the Ministry of Finance. Mr. Mohamed will be able to provide further information on the privatization of Nouakchott Port. You can reach Mr. Mohamed at (831) 333 90 22 or by email at Mohamed.Mouknass@miis.edu. We look forward to hearing from you. Sincerely yours. Appendix
D Nouakchott, April 30, 2001 Mr. Sidi
Mohamed Ould M’beirik Dear Mr. Sidi Mohamed, Thank you for the opportunity to meet yesterday and discuss the privatization of the Port of Nouakchott. It is useful to recapitulate the talking points and outcome of the meeting. The talking points of the meeting were the redundant dock workers at the port, a compensation plan for voluntary resignations, an early retirement plan, and a training program for workers who would like to shift to another sector. The outcome of this meeting was to set up a voluntary bonus formula. Future owners should extend the same benefits to employees up to retirement age, and dock workers’ status will transfer from civil servants to private servants. We look forward to work with you. Sincerely yours. Appendix
E
Port activities play an important role in the economy of any coastal country, especially an export-oriented country like Mauritania. If a port is efficient and reliable, the overall economy of that country is positively affected. An efficient port increases trade at the national and regional levels, and directly or indirectly creates jobs. Effective ports in Singapore and Hong Kong are perfect examples. With the integration of the global economy, a port has a dual function. The first function is to interface between ocean and inland transports, or the international market and the domestic market. The second function is to be part of the cost-efficient inter-modal distribution system. This means ports are integrated in the distribution chain from factories to final markets. Products that pass through a port must compete in the global market. Thus, port services must reflect international levels of costs and productivity. Today, transnational companies scour the world for least-cost inputs for their final products; port costs are an important component in the final product price. If the port costs are excessive due to inefficiencies or inappropriate technologies, the international competitiveness of the merchandise will suffer. Sales will be limited. The demand for port services will decline, and export-led growth policies will be less effective. Port
infrastructures are critical to the economic development of Mauritania.
Since its inauguration, the authority, due to a lack of capital, has
not maintained Nouakchott Port’s infrastructure. It has decreased
the attractiveness of the port to customers, eroding the local economy.
Privatizing port operations will cause new investors to upgrade the
existing facilities, which will increase productivity and competitiveness.
Ports that use modern systems will always have the lowest port costs
and the shortest times for loading. The privatization of port operations will remove the state from the element of the port where real employment is concentrated. Consequently, the drag of labor expenditure on the government budget will be eliminated. The work force will transfer to the new port terminal operator. The government could reallocate public resources from labor expenditure to investment in education and social development projects. Furthermore, the introduction of private sector participation in port activities will expose labor to market mechanisms of the global economy, where competition is the rule. By responding to the needs of customers, workers could secure jobs and keep their social benefits. Customers
want access by land and sea to a port that functions quickly and expeditiously,
enabling them to purchase finished or unfinished goods and services
where total costs, including port costs, are lowest. The new terminal
operator will collaborate with dock-workers to gain customer satisfaction.
With globalization, the commercial goal of employers and the social
goal of dock workers have become interdependent and can only be achieved
through a collaborative effort. Annex
1 Between 1960 and 1999, international trade (exports plus imports) grew from 25 percent of world GDP to 42 percent, with 90% carried by maritime transport. According to the World Bank Institute statistics, Sub-Saharan African countries’ share in global trade was less than 1% in 1997. A number of factors explain the weak position of Sub-Saharan African countries in the global economy. First, the economies depend on primary products whose prices have on the whole decreased dramatically in relative terms; export purchasing power declined by 40% between 1980 and 1990, while export purchasing power of developed countries rose by some 70% in the same period. Second, the Sub-Saharan region has received little foreign direct investment, due to several impediments:
Finally, protecting port authorities from private sector participation has contributed to higher transport costs. Many African products can not compete in international markets as a direct result of port costs. Moreover, African governments attached great importance to the public ownership of national ports at the expense of commercial principles. Annex
II Customs personnel reform is aimed at: ending corrupt practices, more effectively collecting taxes, and more effectively responding to globalization. International liberalization has generated booming trade volumes. The World Trade Organization estimates that world trade grew by 8% since 1995—four times the growth of world GDP. In fact, during the 1990s trade has grown far faster than the world output, which indicates that national economies are closer than ever. This globalization promotes customs personnel reform, particularly in African countries. Customs personnel reform will occur through training programs at the World Customs Organization in Brussels, Belgium. Training will cover many areas. The first is on indirect tax regimes such as the VAT, to find other ways of maintaining revenue yield. Customs personnel will learn to combat drug trafficking, commercial fraud activities, and transnational crimes. Finally, customs personnel will learn such new technologies as artificial intelligence, bar coding, document imaging, and electronic communication between. Accurate and timely information will yield workers significant benefits. Introducing computer literacy in customs administration will be highly beneficial. Day-to-day operations are far more efficient with computer based systems. Connecting customs administration to the global network will reduce service costs, increase quality and diminish time of processing. Management audits will quantify the movement of goods and travelers to aid resource allocation and to measure results. In conclusion, the government should hire new customs personnel; raise the salary of port customs officers, and send personnel from the finance ministry to fiscally control the customs administration. If customs personnel reform is implemented, government revenues will increase, the business community will be satisfied, and the entire economy will benefit. Annex
III Singapore Network Services (SNS) manages and operates Tradenet, a networked information system that allows traders to declare imports and exports for customs directly from their office computers. Tradenet evolved from a five-person National Computer Board research project, begun in December 1986 with the aim of boosting Singapore’s competitiveness in world markets. Fifty companies participated in a pilot launched in January 1988. The participants included traders, customs agents, and the Trade Development Board, which handles much of the documentation and licensing done in other countries by customs agencies. With tradenet, a trader’s declaration is transmitted electronically to the Trade Development Board, which issues the necessary approvals in 15 minutes, after routing details to various government departments. Depending on the type of good, as many as twenty agencies may be involved. On receiving approval, the trader prints and signs the document to obtain release of the cargo. Tradenet user software developed by SNS is offered through several approved Singaporean software houses. Software developed by others may be used instead, but requires certification to ensure quality and compatibility. Thanks to tradenet, traders no longer must leave their offices to obtain customs approvals. Because special trips to rectify errors or resolve disputes now hardly ever occur, traders have been able to trim labor costs. With storage for goods awaiting clearance no longer necessary, goods can now go straight from ship to the consignee—a particularly important consideration in Singapore, where space is at a premium. Meanwhile a new port, container, and real-time vessel management system operated by the Port of Singapore Authority has further expedited the flow of goods. The result has been ship turnarounds of less than 10 hours, and huge improvements in port and harbor facilities. Electronic pre-clearance has helped make Singapore’s port the most efficient in the world. The Singapore government values these efficiencies at over 1 percent of GDP. Annex
IV Three indicators related to knowledge correlated significantly with growth rates: education, openness to trade, and the availability of communication infrastructure (as measured by telephone density and the ratio of telephone main lines to population). These three partial proxies for knowledge do not completely gauge access to knowledge or the ability to use it, but they do provide a rough approximation. They show that a country can add substantially to its growth rate by increasing the education of its people, its openness to international trade, and its supply of telecommunication infrastructure. The impact on growth can perhaps be as large as four percentage points for a country that moves from significantly below average to significantly above the average on all the indicators. These findings can plausibly explain each of the three factors:
Source: World Bank Report 1998/99 BIBLIOGRAPHY Guislain, Pierre, The Privatization Challenge, Washington, D.C, 1997. Hachette, Domonique, Privatization in Chile: An Economic appraisal, San Francisco, 1993. Megyery, Kathy, Facilitating Foreign Participation in Privatization, Washington, D.C, 1997. Organization for Economic Co-operation and Development, Methods of Privatizing Large enterprises, Paris, 1993. Organization for Economic Co-operation and Development, Privatization of Utilities and Infrastructures: Methods and Constraints, Paris, 1997. Organization for Economic Co-operation and Development, Valuation and Privatization, Paris, 1993. Sader, Frank, Privatizing Public Enterprise and Foreign Investment in Developing Countries, Washington, D.C., 1995. United Nations Economic Commission for Latin America and the Caribbean-ECLAC, Port Modernization, 1999. World Customs Organization, Survey of Customs Reform and Modernization Trends and Best Practices, Brussels, 1997. Yergin, Stanislain, The Commending Heights, New York, 1998.
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