Port Modernization: a Pyramid of Interrelated Challenges
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Port Modernization: a Pyramid of Interrelated Challenges

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    This document forms the basis of a course of the same name developed by the Economic Commission for Latin America and the Caribbean of the United Nations. The course seeks to encourage participants to analyze a series of factors affecting the administration and operation of ports. Its central aim is to generate a consensus among the port community on the need to restructure the port system. The course is divided into three modules. The first module analyses structural changes in markets, services, technologies and the legal framework, which are affecting trade and port activities. The products that pass through ports must compete in the global economy, and port services have to reflect international levels of productivity and cost. In that sense, port operations need to be optimized and carried out in an integrated fashion so as to become systems. The second module looks at private-sector participation. Any entity providing port facilities and services should operate in a commercial environment governed by market mechanisms. Governments should adopt a legal regime combining deregulation and decentralization with antimonopoly laws and specific legislation defining private-sector participation. The third module looks at market-based port labor reform. The main aims of the market-based reform are to expose the labor sector to market mechanisms so as to increase the speed with which workers respond to market signals, to their own benefit as well as that of users and private terminal operators. To achieve this goal, Governments need to deregulate and decentralize the commercial environment and collective bargaining in ports. Government participation in port activities should be confined to setting up a regulatory regime and dispute settlement systems, adopting antimonopoly laws to prevent abuses by private terminal operators or unions, redefining the concept of social equity to guarantee compensation to workers for acquired rights, early retirement and training. The results of structural changes, private-sector participation and labor reform will be: i)operational, because they will attract new investments, foster specialization and improve productivity and competitiveness both within ports and between them; ii) economic, because efficient ports foment increased trade and, directly or indirectly, job creation; political, because Governments? commercial activities in ports, along with the chances of pressure groups abusing governmental powers, will be reduced, and iv) social, because they will facilitate co-operation between dock workers and private terminal operators, thereby ensuring more effective fulfilment of commercial and social goals. 59 p.
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