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The Challenge of Reforming Customs in Bangladesh

Glenn Mackenzie-Frazer, Chief of Party of the Bangladesh Trade Facilitation Activity, presents on customs modernization at a workshop in Dhaka.

For this month’s installment of our "Featured Experts" blog series we caught up with Glenn Mackenzie-Frazer, Chief of Party on the USAID-funded Bangladesh Trade Facilitation Activity (BTFA). We spoke to Glenn on the importance of customs reform and trade facilitation. Check out our conversation below!

Velyn: Glenn, thank you so much for making time to speak with us today. I have to say that I’ve really been looking forward to this since customs and trade reform are so essential to the development process.

Glenn: No problem, Velyn. I’m very glad to chat with you about this, and I completely agree. Customs and trade reform are a critical part of increasing economic growth, but they are also areas that people generally know very little about, so perhaps we can change that a bit today.

V: All right, let’s dive right in. If you were talking to someone you had just met, how would you describe what “customs reform” is, and its importance to development?

G: When I started working in this field, customs reform projects were purely focused on improving customs processes, procedures, and systems. This was all seen as a distinct part of larger anti-corruption initiatives within governments, but there were still a number of missing links. We needed to bring the conversation full circle, and really answer, Why are we carrying out customs reforms? Well, we’re doing it because we’re creating a business enabling environment to promote investment in developing countries. Over the last 10 years, the conversation has changed to reflect this, and trade facilitation activities have been fully incorporated into customs reform projects.

Customs modernization as explained through capacity building at BTFA-led workshop.

Stakeholders need consistency when they’re declaring their goods at the border. They need precise answers to questions such as: How long it will take for my goods to cross the border? How much will my organization have to pay? When can I expect the delivery of my goods? Will my goods be physically examined and removed from their packaging in a disruptive manner? So customs reform and trade facilitation projects like BTFA focus on helping governments provide stakeholders with answers to these questions through consistent, reliable, and effective service delivery. This gives investors and businesses the information they need in order to have confidence in a country.

This is also why it’s so important to have customs-to-business partnerships. It’s great when customs experts think a new system or process is a good idea, but is it really something that investors, exporters, or importers want? Good trade facilitation consultants try to open and maintain a dialogue between stakeholders in both the private and public sector. Open forums allow private sector stakeholders to ask the government: Is there a reason why we can’t do this or that? The current approach poses a risk for us. Could we try applying these changes? These conversations are of the utmost importance because they ensure that the reforms we implement in customs actually lead to increased investment and economic growth. Customs reform in and of itself is good, but customs reform that improves the business enabling environment is infinitely better.

V: Absolutely. Thanks for your perspective. This is a great segue into the work that you’re doing now on BTFA. What have been some of BTFA’s major accomplishments and what does the project have in store for the rest of this year?

Mohammed Yussuf (left), one of the project's team members, works with Bangladeshi trade officials.

G: Sure. We’ve done a number of things, but one of our greatest successes has been supporting the revitalization of the National Board of Revenue’s (NBR) strategic action plan. When we started this project, it was really just a piece of paper and no one had a clear idea of how it was supposed to guide their actions. Very few people understood its impact on their day-to-day activities. So we helped the NBR review, re-focus, and re-write the plan so that it could be a living, breathing document that serves as a blueprint and a roadmap for performance improvement. There’s also a new focus on modernization in the country and now the strategic action plan has been realigned to reflect that. This was definitely a major accomplishment.

We’re also beta-testing a new customs website that will be filled with up-to-date relevant trade information to replace the current website, which is largely out of date. People need access to relevant information – they should know where to find it and be able to obtain it quickly. Once the website is fully launched, our next move is the development of a national enquiry point that will be internet-based and accessible through the updated Customs website. In addition, we’re working on making sure that if you can’t access the information you need on the website, there is a functional call center you can reach to ask questions concerning imports, exports, taxation, trade issues, etc.

We’re also looking forward to the full implementation of our legislative reform work which has been a long-term effort of BTFA since year one. We’ve been working on bringing Bangladesh in full compliance with the Bali Convention and the Revised Kyoto Convention. Full implementation will allow for things like authorized economic operators, post-clearance audit, better risk management, the exchange of electronic information, and much more.

The BTFA team and the Dhaka Women's Chamber of Commerce and Industry sit down for a photo after a training session at the BTFA office.

Our collaboration with the Dhaka Women’s Chamber of Commerce and Industry is certainly another success; we recently conducted our second training program with them. During these trainings, our BTFA team shares their knowledge and expertise with women entrepreneurs and representatives who are interested in becoming exporters to expand their market base.

We’re also thrilled about a new component of the project, trade intelligence, which we’ve just added. Trade intelligence allows customs officers to assess situations, make evidence-based decisions about risk management, and ensure that every single container that comes into the country doesn’t have to be physically opened. Instead, customs officers can look at relevant information and say, Well this is not a risk to us. This individual has imported 60 containers in the last three months and we’ve never found anything. We don’t need to search this container again, we’ll do it on a risk-testing basis. We’ll do one every three months instead of 60 every three months. And Velyn, you’d be amazed to know how much money and time these types of risk assessments would save both businesses and the government.

V: Excellent. You have a lot going on! For our final segment, we would love to hear some of your tips for successful project management.

G: I have seen so many people fail because they come into the country and say, This is how we’re going to do it! They don’t take the time to get to know the country, they don’t listen to their counterparts, they don’t adapt their solutions or try out new ideas and then…they fail! Development partners don’t like things being imposed upon them. We try to involve partners in a creative process where they’re involved in finding an innovative solution, and then they own it. This process is the foundation of successful project management.

Finally, remember that development is not for the faint-hearted. You have to leap out of your comfort zone and make a lot of sacrifices; but there’s nothing quite like waking up and genuinely liking the work that you do; I wouldn’t change my job for anything.

Special thanks to Mr. Mackenzie-Frazer for volunteering his time and sharing his knowledge for this post!

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