Global trade is entering a more fragmented, unpredictable era. The golden age of globalization – marked by open markets and expanding supply chains – is giving way to a world shaped by rising protectionism, geopolitical rivalries, and increasingly complex trade barriers. From tariffs
to stricter standards, governments are tightening the flow of goods in the name of national interest. For most countries, this shift is a strategic recalibration. But for landlocked developing countries (LLDCs), it’s a potential crisis. These nations, already facing steep trade costs due to geography, now confront a global economy that’s harder to access, less cooperative, and more divided.
The question isn’t just how LLDCs can survive in this environment – it’s how they can still find pathways to meaningfully integrate into it.
For these nations, economic integration is not simply a matter of policy, but rather a battle against geography. Without direct access to the sea, LLDCs are literally boxed in. Every container of exported goods must pass through at least one neighbouring country, making them dependent not only on foreign infrastructure, but also on the politics and efficiency of others.
There are 44 landlocked countries in the world today. Over half of them, 57 per cent, are classified as either low-income or lower-middle-income economies. The correlation is no coincidence. On average, landlocked countries have significantly lower GNI per capita than their coastal neighbours. For instance, if we look at low-income landlocked countries across different regions, the gap between their per capita income and the regional average is stark.
Landlocked Countries’ GNI Per Capita vs. Regional GNI Per Capita
Why are these countries falling behind?
One of the key reasons is the prohibitively high cost of trade. Research has shown that LLDCs face geographically imposed penalties. A seminal 1998 seminal workstudy by Radelet and Sachs found that freight costs for landlocked countries were as high as 10 per cent to 20 per cent of the export value, compared to just 2.2 per cent for the U.S. Since then, little has changed. In 2014, the World Bank estimated that the cost of exporting a cargo container was around $3,204 for LLDCs compared to $1,268 for transit countries. Likewise, a 2017 WTO study reported that while coastal countries face an average additional trade cost of 278 per cent, their landlocked peers face 333 per cent. For low-income landlocked countries, the trade cost is at least 50 percentage points higher than coastal economies in the same income group.
These costs are not just numbers on a spreadsheet. In many instances they have translated into real developmental stagnation. Coastal economies like Kenya and Ghana in Africa and India in Asia are expanding their export portfolios, but their landlocked peers like Niger, Malawi, and Nepal remain dependent on low-value commodities and foreign aid. The trade challenge has also translated to majority LLDCs trailing behind in investment, diversification, and industrial growth.
Infrastructure alone is not enough for LLDCs
Infrastructure is undeniably crucial. It helps nations connect with the vast global marketplace, facilitates trade, and enables economies to move up the value chain. Take Kazakhstan, for instance. As the largest landlocked country in the world with more than 3,000 km distance from
the nearest seaport, Kazakhstan’s transformation into an upper-middle-income economy has been remarkable. Kazakhstan adopted a forward-thinking, multi-modal connectivity strategy by investing in railways, highways, ports on the Caspian Sea, and logistics hubs that formed critical links. Its infrastructure investments created an east-west corridor between China and Europe and South Asia and Europe, positioning the country as a strategic pivot for transcontinental trade. Kazakhstan has not just survived as a landlocked country – it has become a land-linked one.
But such stories are exceptions, not the rule. Many LLDCs are not located between economic giants like China, Russia, and Europe, and lack the geopolitical leverage to draw massive transit investments.
Nevertheless, in an attempt to overcome the geographic challenge, every year billions of investments are made in trade-related infrastructure in LLDCs. Some prominent programs like the Almaty Programme of Action (2003 – 2013) and the Vienna Programme of Action (2014 -2024) specifically focused on improving transit policies, upgrading transport infrastructure, and simplifying border procedures.
The implementation of these programs has resulted in some real progress. The World Bank reported that support for these programs have resulted in an increase in trade infrastructure investment, more efficient trade corridors that have reduced the time and port delays, and digital infrastructure and ICT development have led to steady increase in the growth of LLDCs.
Yet, for all these gains, the deeper truth remains – most landlocked developing countries are still among the world’s poorest. This points to a clear lesson: infrastructure alone is not enough.
All high-income landlocked countries are in Europe and are deeply integrated into regional trade frameworks
Geography isn’t always the destiny. Around 23 per cent of landlocked countries are high-income. Some of them like Liechtenstein, Luxembourg, and Switzerland are also among the wealthiest countries in the world. Yes, these nations have world-class infrastructure, and some are closer
to the nearest seaport compared to other LLDCs. But there is one more striking commonality – all high-income landlocked countries are in Europe. The critical factor behind their growth is their deep integration into regional frameworks.
The European Union’s single market enables seamless trade across borders, backed by harmonized regulations, shared infrastructure, and binding legal frameworks. In the EU, trucks don’t sit idle at borders for days. Goods flow freely, services are interoperable, and digital and financial infrastructure operate across borders.
Contrast that with Africa or Asia, where the majority of low and lower-middle income landlocked countries are situated. These LLDCs are involved in various regional trade agreements, yet often these frameworks are loosely structured, with weak enforcement mechanisms. According to the World Bank, in these countries bilateral treaties often conflict with multilateral ones, and critical sectors like trucking and warehousing remain unregulated or
underdeveloped. For example, despite being part of SAARC, Nepal’s trade with its neighbours is often hampered by border delays and a lack of standardized customs procedures.
This leads to a powerful insight: regional integration – not just roads and railways – is what turns landlocked into land-linked.
What can be learned from successful regional integrations
Regional integration is more than a trade deal or a paved road. It involves a coordinated effort to harmonize infrastructure, regulations, and institutions to enable the smooth movement of goods, services, capital, and people. Done well, it reduces trade costs, attracts foreign direct investment, and allows small economies to access larger markets.
Here is what we can learn from successful regional integration like that of the EU:
1. Make Transit Agreements More Than Just Promises
Singing a transit agreement shouldn’t just be a handshake deal. These agreements need legal teeth. That means clear enforcement mechanisms, timelines, and dispute resolution systems. Many LLDCs struggle because even when agreements exist on paper, they’re poorly enforced. The European Union’s Common Transit Convention imposes the same enforceable rules in all countries. This allows goods to travel across multiple EU countries using a single customs declaration, reducing delays in transporting goods.
2. Simplify and Harmonize Border Procedures
Trade often slows down not because of distance, but because of bureaucracy at borders. Long waits, duplicate inspections, and paperwork in different languages add time and cost. Implementing One-Stop Border Posts (OSBPs), a system where border agencies from neighboring countries work together at a single location through joint customs inspections and digital platforms, can improve trade. For instance, the Northern Corridor linking Kenya, Uganda, and Rwanda has resulted in reducing clearance times from several days to just a few hours, giving a major boost to regional trade.
3. Coordinate Infrastructure Across Borders
Infrastructure must be planned regionally, with cross-border compatibility in mind. The Maputo Development Corridor, connecting South Africa to Mozambique, integrates roads, rail, and border management into a unified plan. It’s now a thriving trade route that benefits both countries and gives landlocked South African provinces like Limpopo and Mpumalanga access to the sea.
4. Agree on Common Technical Standards
Countries should use shared technical standards, especially for logistics, digital customs, and transport infrastructure. For instance, in Europe, the Trans-European Transport Network (TEN-T) ensures that highways, railways, and ICT systems are interoperable across borders, making trade smooth.
5. Build Institutions That Can Actually Enforce the Rules
Infrastructure and agreements are only as good as the institutions that uphold them. Without strong regional bodies, rules may be ignored or reversed when political winds change. The European Commission has real authority to enforce trade rules, apply penalties, and ensure cooperation among members. That’s a key reason why even landlocked EU countries like Austria, Slovakia, or Czech Republic thrive in global trade.
Regional integration might be the missing piece for many LLDCs in these challenging times.
In recent times, friendshoring and nearshoring are reshaping global trade. Countries are shifting supply chains closer to allies, potentially redrawing trade maps. For LLDCs, this could be a rare opportunity – if they can build credible regional alliances and integrated corridors.
The African Continental Free Trade Area (AfCFTA), implemented in 2019, is a positive step towards this. It holds transformative potential. With full implementation, intra-African trade is projected to rise by 81%, offering a lifeline to landlocked nations like Malawi, Rwanda, and
Burkina Faso. These countries are already seeing gains in harmonized tariffs and digital trade corridors. But success hinges on sustained political commitment and coordinated implementation. But not all regions are ready. South Asia’s SAARC is perhaps the most underutilized regional bloc, plagued by political rivalry.
India and Pakistan’s continued tensions, Sri Lanka’s economic crisis, and structural imbalances in trade prevent deeper collaboration. Without stronger cooperation, landlocked countries like Nepal and Bhutan will continue to operate on the margins of global trade.
To move from being landlocked to land-linked, countries must reimagine regional integration – not as a diplomatic gesture, but as a developmental imperative. It means moving beyond fragmented bilateralism toward deeper, binding multilateralism. And it means trusting neighbors – politically, economically, and institutionally.
