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Global headlines through the Covid-19 pandemic have painted a bleak picture of a world in lockdown. Travel has been restricted, schools temporarily closed and once busy city streets deserted. Governments have advised their citizens to self-isolate, and major global events have been either postponed or cancelled. The world is now tentatively beginning to emerge from varying degrees of lockdown, but a global sense of self-imposed isolation has taken hold.
And yet from ASEAN to the G7, governments have come together to co-ordinate their responses. Even as planes were grounded, bridges were being built as nations worked together to address one of the most pressing public health emergencies of the past 50 years. Rather than turning inwards, much of the international response has demonstrated that we are living in a global and collaborative world, increasingly connected thanks to rapid and continuous technological advancements that allow us to mobilise, exchange information, identify symptoms and more.
The GCC is a case in point. The region’s fast-growing collective markets are valued at $1.5 trillion and are home to some 54 million people linked by a shared language and similar consumption habits. Yet despite this – and a GCC-wide trade agreement – intra-regional trade, at 10 per cent of total trade, has been disappointingly low compared to other regions, hampered by poor border agency co-operation and overly complex customs processes.
Bahrain, which through its FTAs with 22 countries around the world and unparalleled access to GCC markets, has positioned itself as the world’s gateway to the Gulf, has been taking strides to address this. Over the past three years the kingdom has undertaken a comprehensive programme of economic reforms. A particular focus has been on easing trade across borders. And while many of these reforms were already underway, the pandemic has acted as a catalyst to progress, expediting the process.
Principal among these reforms has been the launch of the Authorised Economic Operator (AEO) programme in 2018. With an overarching objective to enhance intra-trade, this initiative is considered to be one of the most important tools for facilitating international trade and enhancing customs procedures by the World Customs Organisation and brings Bahrain in line with global supply chain security standards. In November 2019, we became one of the first organisations granted AEO status for meeting the criteria and conditions of the programme.
As part of this programme, Bahrain signed an AEO mutual recognition agreement with Saudi Arabia that facilitates close co-operation between the two countries. The agreement includes exchanging the concessions provided to each country’s accredited operators (like ours) and speeds up the process of clearing goods and transit time over the border.
This has been invaluable to maintaining supply chains and trade during the pandemic as certified AEOs are able to take full advantage of fast track access over the King Fahad Causeway, which connects Bahrain and Saudi Arabia via a 40-minute drive.
The King Fahad Causeway is critical to both our economies, both from a tourism and commerical perspective. Thanks to the AEO programme, Bahrain and Saudi Arabia were able to quickly collaborate on temporarily closing the causeway to passengers, while maintaining the flow of crucial commercial freight. Between January and May 2020, despite the disruptive impact of the pandemic, we exported more than $75m worth of unwrought aluminium to Saudi Arabia.
Technology has also played an important role. Cutting-edge technological solutions are being utilised, developed and trialled to streamline customs processes, from payments to pre-clearance approvals. Paperwork has been nearly eliminated entirely. This allows information on the shipment to be checked before the truck has even reached the border, significantly boosting speed of process and eliminating jams.
As a certified AEO since 2019, we gained privileges which have tremendously expedited the time it takes to export aluminium. Finalising the documentary requirements takes a few hours, and the border compliance time to export aluminium via King Fahad Causeway takes less than two hours. As no additional scanning is required from the Bahraini border side and all procedures are streamlined for exporters.
In short, through technology and collaboration, the GCC has been able to maintain a sense of business as usual that has evaded other parts of the world. The pandemic has been an undeniable tragedy nonetheless, but has expedited progress while demonstrating what a determined region can achieve in even the direst and unprecedented circumstances. International trade as we know it will be permanently changed. But in some ways, it has changed for the better.
The author is chief executive of Alba