SCHOOLOFECONOMICSANDMANAGEMENT

UNIVERSITYOFAARHUS
COURSEDESCRIPTIONFOR:
2965/66/:PublicEconomicsofAgriculturalPolicyandCGEmodels
COURSECODENO:2965(5ECTS)2966(10ECTS)
COURSENAME:PublicEconomicsofAgriculturalPolicyandCGEmodels
COURSELEVEL:Electivemasterslevelcourse
ECTSCREDITS:5+5
APPROVED:ApprovedfortheSpring07semesteron27March2007
SEMESTERFORWHICHTHECOURSEDESCRIPTIONAPPLIES:Spring2007
REPLACESCOURSEDESCRIPTIONDATED:New
INTERVALSATWHICHTHECOURSEISOFFERED:Seecourseplan
FILLEDINBY:KnudJrgenMunk
LECTURER:KnudJrgenMunk
TEACHINGLANGUAGE:English
FORMOFASSESSMENT:Oralexam
EXAMINATIONAIDSALLOWED:None
NUMBEROFHOURSPERWEEK:seeTeachingMethod
ADDITIONALINFORMATION:
ThelecturesandthetrainingcoursewillbegivenatUniversityofCopenhagen.
Lecturenotesareavailableatthestartofthecourseanddetailedoverheadswillbe
availableaftereachlecture.TutorialswillbeorganisedattheUniversityofAarhusas
required.Documentedexpendituresfortravelandaccommodationupto2.500krwill
bereimbursedforeachstudent.
Attheendofthecoursetherewillbeanoralexamwith30min.of
preparation.Studentsmaychoosetobeexaminedinonlythefirst
(Lectures)orthefirstandthesecond(LecturesandCoursework)partof
thecourseandwillreceiveECTSaccordingly.Theexamwillcoverthe
subjectscoveredduringthelecturesandthecoursework,dependingon
whichpartsofthecoursethestudentshavefollowed.
Page 2

SCHOOLOFECONOMICSANDMANAGEMENT
UNIVERSITYOFAARHUS
COURSEDESCRIPTIONFOR:
2965/66/:PublicEconomicsofAgriculturalPolicyandCGEmodels
COURSEOBJECTIVES:
First,toprovideanintroductiontotradeandpubliceconomictheory
requiredforComputableGeneralEquilibrium(CGE)modelling.
Secondly,tousethistheorytoexplaintheevolutionofagriculturalpolicy.
Thirdly,topreparestudentsforCGEbasedpolicyanalysesinministries,in
researchinstitutions,inprivateconsultancyfirmsandininternational
publicadministrationsusingasexamplesagriculturalandtradepolicy
issuesrelatedtotheevolutionoftheEUCommonAgriculturalPolicy
(CAP).
Thecourseprovidesboththetheoreticalbasisforpolicyanalysesand
handsonexperienceintheuseofCGEmodels.Morespecifically,the
courseprovidesatheoreticalframeworkandcomputationaltoolsfor
evaluationofchangesinagriculturalpolicy.Duringthesummerbreak
students,whohavefollowedthefullcourse,willbeofferedsupervisionin
writingatermpaperusingtheCGEmodelsmadeavailableduringthe
coursetoanalyseagriculturalandtradepolicyissuesfacinginparticular
developingcountries.
COURSECONTENTSANDSUBJECTAREAS:
Thecourseprovidesboththetheoreticalbasisforanalysesofagricultural
andtradepolicyissues,andhandsonexperienceintheuseofCGE
modelsprogrammedinGAMS/MPSGEforthispurpose.
TheGAMShomepagewww.gams.comprovidesexamplesofeconomic
applicationsforwhichGAMShasbeenused.
TheapproachadoptedisexplainedinIntroductiontotheconstructions
anduseofCGEmodelsavailableonrequestfromKnudJrgenMunk,
kmunk@econ.au.dk
REQUIREDCOURSES:
Studentsareassumedtohaveabackgroundinconsumer,producerand
generalequilibriumtheorycorrespondingtoanadvancedundergraduate

courseinmicroeconomics.
COMPLEMENTARYCOURSES:ArelatedcoursehasbeentaughtatUCL,
LLN.Forinformationaboutkeyareaswhichwillbecoveredinthecourse
Page 3
SCHOOLOFECONOMICSANDMANAGEMENT
UNIVERSITYOFAARHUS
COURSEDESCRIPTIONFOR:
2965/66/:PublicEconomicsofAgriculturalPolicyandCGEmodels
see
http://www.icampus.ucl.ac.be/claroline/course/index.php?cid=BIRA2105
TEACHINGMETHOD:Thecourseconsistsoftwoparts:Lecturesand
Coursework
Lectures:ThelectureswillcoverrelevantpartsofPubliceconomicsand
Tradetheory.SimulationresultsproducedbyCGEmodels,which
subsequentlywillbeusedduringthecoursework,willprovidequantitative
illustrationsoftheoreticalresults.Thelectureswillalsoincludea
descriptionoftheEvolutionofagriculturalpoliciesinEuropestartinginthe
19
th

centuryandendingwiththeprospectsforfinaldismantlingoftheCAP
atthebeginningofthe21
st

century.Therewillbelecturesfor6weeks,
with4lecturesaweekstartingMarch22
nd

.Therewillatthestartofthis
partofthecoursebeashortintroductiontothecoursework(seebelow).
Coursework:ThestudentswillbepresentedwithanumberofstylizedCGE
modelswhichhavealreadybeenprogrammedinGAMS/MPSGE.Theywill
gainexperienceinhowtousethesemodelstosimulatetheconsequences
ofchangesingovernmentpolicies.Thecourseworkconsistsof20hoursof
classes(15.0019.00,MondaytoFriday,duringthesecondorthirdweek

ofMay).Thispartofthecourserequiresthecompletionof5exercises.
ThecourseworkwillbeundertakenincollaborationwithIsmirMulalic,
HeadofSection,StatisticsDenmark.
Thelectureswillbebasedon
Markusen,Melvin,KaempferandMaskus(1995),InternationalTrade;
TheoryandEvidence,MCGrawHill
KnudJ.Munk(2006),TaxtariffReformwithCostsofTax
Administration,WorkingPaper,InstituteofEconomics,Universityof
Aarhus(forthcomingInternationalTaxandPublicFinance)
KnudJ.Munk(2006),Ontherationalefortheuseofbordertaxesin
developingcountries,WorkingPaper,InstituteofEconomics,University
ofAarhus
Gardner,B.L.(1992),ChangingEconomicPerspectivesontheFarm
Problem,JournalofEconomicLiterature,VolXXX,pp11651171
G.Tabilini(2003),PrinciplesofDecisionmakingintheEuropeanUnion:
AnEconomicPerspective,CESifoEconomicStudies200349(1):75102
Page 4
SCHOOLOFECONOMICSANDMANAGEMENT
UNIVERSITYOFAARHUS
COURSEDESCRIPTIONFOR:
2965/66/:PublicEconomicsofAgriculturalPolicyandCGEmodels
EuropeanCommission,DirectorateGeneralforEconomicandFinancial
Affairs,(1994),ECAgriculturalPoliciesforthe21
st

Century,
Rapporteurs:K.J.MunkandK.Thomson,EuropeanEconomyReportsand
StudiesNo4
andlecturenotesandselectedarticles.
Thefollowingareaswillbecovered
1.Themicrofoundationfortradeandpubliceconomictheory
2.Basicinsightsprovidedbyneoclassicaltradetheory
3.Basicinsightsprovidedbyoptimaltaxtheory

4.Optimaltaxtariffpoliciesinsmallopeneconomiesatdifferentlevels
ofeconomicdevelopment
5.Theemergenceofthefarmincomeprobleminthecourseof
economicdevelopmentandthepolicyresponse
6.ReformoftheEUagriculturalpolicy(theCAP)
7.AgriculturaltradepolicyissueswithspecialfocusonEULDCtrade
integration
ThecourseworkwillrequirefamiliaritywithBrooke,A.etal.(2003)
"GAMSAUser'sGuide",www.gams.com
Markusen,J.R.(2002),"GeneralEquilibriumModellingusingGAMSand
MPSGE".
Rutherford,T.(1999),"AppliedGeneralEquilibriumModellingwithMPSGE
asaGAMSSubsystem:AnOverviewoftheModellingFrameworkand
Syntax",ComputationalEconomics,14,146.
NotesdocumentinganumberofillustrativeCGEmodelsprogrammedin
GAMS/MPSGE,whichwillbemadeavailableduringthecoursework.
SCHOOLOFECONOMICSANDMANAGEMENT
UNIVERSITYOFAARHUS
COURSEDESCRIPTIONFOR:
2965/66/:PublicEconomicsofAgriculturalPolicyandCGEmodels
see
http://www.icampus.ucl.ac.be/claroline/course/index.php?cid=BIRA2105
TEACHINGMETHOD:Thecourseconsistsoftwoparts:Lecturesand
Coursework
Lectures:ThelectureswillcoverrelevantpartsofPubliceconomicsand
Tradetheory.SimulationresultsproducedbyCGEmodels,which
subsequentlywillbeusedduringthecoursework,willprovidequantitative
illustrationsoftheoreticalresults.Thelectureswillalsoincludea
descriptionoftheEvolutionofagriculturalpoliciesinEuropestartinginthe
19
th

centuryandendingwiththeprospectsforfinaldismantlingoftheCAP
atthebeginningofthe21

st

century.Therewillbelecturesfor6weeks,
with4lecturesaweekstartingMarch22
nd

.Therewillatthestartofthis
partofthecoursebeashortintroductiontothecoursework(seebelow).
Coursework:ThestudentswillbepresentedwithanumberofstylizedCGE
modelswhichhavealreadybeenprogrammedinGAMS/MPSGE.Theywill
gainexperienceinhowtousethesemodelstosimulatetheconsequences
ofchangesingovernmentpolicies.Thecourseworkconsistsof20hoursof
classes(15.0019.00,MondaytoFriday,duringthesecondorthirdweek
ofMay).Thispartofthecourserequiresthecompletionof5exercises.
ThecourseworkwillbeundertakenincollaborationwithIsmirMulalic,
HeadofSection,StatisticsDenmark.
Thelectureswillbebasedon
Markusen,Melvin,KaempferandMaskus(1995),InternationalTrade;
TheoryandEvidence,MCGrawHill
KnudJ.Munk(2006),TaxtariffReformwithCostsofTax
Administration,WorkingPaper,InstituteofEconomics,Universityof
Aarhus(forthcomingInternationalTaxandPublicFinance)
KnudJ.Munk(2006),Ontherationalefortheuseofbordertaxesin
developingcountries,WorkingPaper,InstituteofEconomics,University
ofAarhus
Gardner,B.L.(1992),ChangingEconomicPerspectivesontheFarm
Problem,JournalofEconomicLiterature,VolXXX,pp11651171
G.Tabilini(2003),PrinciplesofDecisionmakingintheEuropeanUnion:
AnEconomicPerspective,CESifoEconomicStudies200349(1):75102
Courses :(M.Sc One Year) Semester System
The 4 years B.Sc (Hons) Programme has been carefully designed to conform to the needs
of the market based on national and international standards. Graduates of the programme
will be able to pursue M.Sc Programme (additional one year) in Economics in the
department as well as in the best and recognized institutions of Pakistan and abroad. The
curriculum is adequately broad based to enable graduates to make suitable career choices.
The Department will provide every possible moral and material assistance to students in

their future pursuits of further education or employment.

M.Sc ECONOMICS PROGRAMME (ONE YEAR)
Course No Core Courses

Cr.Hours

601

Advanced Microeconomic Analysis

602

Advance Macroeconomic Analysis

616

Mathematical Methods for Economists

617

Advanced Econometrics

618

Advanced Statistics

Optional courses:
Course No Core Courses

Cr.Hours

603

Money and Capital markets

612

Poverty and Sustainable Development

615

Natural Resource Economics

614

Women and Development

605

Financial Economics

604

Development Policy

Specialization: 12 Credit Hours

(M.Sc One Year) Semester System
The 4 years B.Sc (Hons) Programme has been carefully designed to conform to the needs
of the market based on national and international standards. Graduates of the programme
will be able to pursue M.Sc Programme (additional one year) in Economics in the
department as well as in the best and recognized institutions of Pakistan and abroad. The
curriculum is adequately board based to enable graduates to make suitable career choices.
The Department will provide every possible moral and material assistance to students in
their future pursuits of further education or employment.
M.Sc ECONOMICS PROGRAMME (ONE YEAR)
Course No Core Courses

Cr.Hours

601

Advanced Microeconomic Analysis

602

Advance Macroeconomic Analysis

616

Mathematical Methods for Economists

617

Advanced Econometrics

618

Advanced Statistics

Optional courses:
Course No Core Courses

Cr.Hours

603

Money and Capital markets

612

Poverty and Sustainable Development

615

Natural Resource Economics

614

Women and Development

605

Financial Economics

604

Development Policy

Specialization: 12 Credit Hours

1. Industrial Economics Group
Course No Core Courses

Cr.Hours

610

Principles of Industrial Economics

613

Economic Analysis of Industrial Projects

(B.Sc (Hons) Part-I) :Micro Economic Theory (Dr.Jehanzeb) Here we study economic problems at smaller,
individual level which enables the students to understand the concepts of consumer
behavior, production theory, Market Organization, General Equilibrium and Welfare
Economics
Macro Economic Theory (Mr. Shafiquilah) Macroeconomics is the study of the
structure and performance of National economies and of the policies that governments
use to try to effect economic policies. The issues that macro economists address are also
focused.
Mathematics for Economist (Mr. Naeem ur Rehman Khattak) In the subject we study
the use of mathematical methods and techniques in an effort to construct rigorous and
logical economic theories. The actual tools employed in this pursuit include algebra,
calculus, Algebraic methods, set theory and other branches of mathematics relevant to
Economics. The use of mathematics to economics enables the students to understand
concepts that are otherwise not clearly comprehensible.
Basic Statistics and Pascal Methodology (Dr. Ijaz Majid): In this course students are
given the Basics along with advanced statistical tools and techniques, generally used in
analysing Economic data. Economics basically deals with both qualitative and

quantitative information. This mass of information can only be better understood if

properly analysed and quantified, which can only be done if the analyst/Economist has
sufficient and sound background of analytic tools and Techniques. This can only be done
if proper coaching is done with statistical techniques.
Public Finance and Monetary Economics (Dr. Mohammad Naeem): Public Finance
deals with finances of the government. The main branches are public revenue, public
expenditure, public debt and fiscal policy. Monetary economics deals mainly with the
evolution, function and characteristics of money and its role and impact in the prevailing
economic system. Alongside it also discusses functions and role of commercial and
central banks.
(B.Sc (Hons) Part-II)
Econometrics (Compulsory) (Dr. Naeem-ur-Rehman Khattak) :This course deals
with estimation and fitting of different regression models to economic data. The course
mainly includes the topics of simple/multiple regression analysis, violation of basic
assumptions, non-linear equation, generalized linear regression model and its
applications, formulation and estimation of special models e.g. models with dummy
variables simultaneous equation system, identification, ILS and 2SLS method for solution
of simultaneous equation system.
GROUP I
Development Economics (Dr. Shahiryar) : The study of economic development is one
of the newest, most exciting and most challenging branches of the broader disciplines of
economics and political economy. This is a systematic study of the problems and
processes of economic development in Africa, Asia and Latin America. It deals with the
economics of contemporary, underdeveloped third world nations, varying ideological
orientations, diverse cultural backgrounds, and very complex yet similar economic
problems that usually demand new ideas and novel approaches.
Managerial Economics (Dr. Jehanzeb) : Managerial Economics basically deals with the
application of economic theory and the tools of analysis of decision science to examine
how an organization can achieve its aims or objectives most efficiently. So the basic
emphasis will be on micro and macro economic theory and the tools of mathematical
economics and econometrics. Students have to select one group out of two groups besides
the subject of Econometrics, which is compulsory.
The Economy of Pakistan (Ms. Naila Nazir) : The course covers many sectors of the
economy like Agricultural Sector, Industrial Sector, Economic Planning and Policies in
Pakistan, its natural resources and geographical position, ideological structure, foreign
debts, trade, transport and communication and problems faced by nationalized and
privatized sectors.
Agricultural Economics (Dr. Muhammad Munir (visiting):The course being with a
systematic introduction to the basic concepts and issues in economics as they relate to
agriculture. The course focuses on gaining an understanding of the economic decisions
made by consumers and producers. In part it also focuses on macroeconomic policy and
how agriculture is affected by policy responses to business fluctuations.
International Economics (Mr. Zilakat Khan Malik) : International Economics deal

with International Trade Theory, International Trade Policy, The Balance of Payments,
Foreign Exchange Markets and Open Economy. It highlights the problems arising in the
international trade, international capital movement, and the operation of multi- national
corporations and risk of economic collapse.
The Economy of Pakistan (Ms. Naila Nazir) : The course covers many sectors of the
economy like Agricultural Sector, Industrial Sector, Economic Planning and Policies in
Pakistan, its natural resources and geographical position, ideological structure, foreign
debts, trade, transport and communication and problems faced by nationalized and
privatized sectors.
Agricultural Economics (Dr. Muhammad Munir (visiting):The course being with a
systematic introduction to the basic concepts and issues in economics as they relate to
agriculture. The course focuses on gaining an understanding of the economic decisions
made by consumers and producers. In part it also focuses on macroeconomic policy and
how agriculture is affected by policy responses to business fluctuations.
International Economics (Mr. Zilakat Khan Malik) : International Economics deal
with International Trade Theory, International Trade Policy, The Balance of Payments,
Foreign Exchange Markets and Open Economy. It highlights the problems arising in the
international trade, international capital movement, and the operation of multi- national
corporations and risk of economic collapse.
GROUP II
Economic Analysis of Project Planning & Management (Prof. Dr. Ijaz Majid) : If
proper investment/programmes are to be carried out the subject of project planning
cannot be overlooked. This subject basically tells us about the feasibility of investment
projects. Projects are generally carried out both under the condition of certainty and
uncertainty. This subject basically deals with different tools/techniques by which the
student is enabled to analyse the feasibility of the project i.e. through financial analysis
techniques generally used to prepare the feasibilities and pre-feasibilities of an
investment project and finally to advise the govt., semi-govt. and NGOs that whether a
particular study should be undertaken or not.
Human Resource Development (Mrs. Danish Alam) : Human Resource Development
encompasses activities and processes which are intended to have impact on
organizational and individual learning. Main emphasis will be on Education, Training and
Development, Leadership Development, Better Subordinate Superior Relations, Career
Planning and Development, Various Job Experiences, Development of Technology and
Job Enrichment.
Economics of Marketing (Ms. Naila Nazir) : This subject encompasses various subject
matters of marketing and its usefulness in Economic Analysis. Main topics are Marketing
Environment, Marketing Segmentation, Consumer Buying Behavior, The Product, The
Prices, Channels of Distribution, Retailing and Wholesaling, and the different
promotional programmes.
Industrial Economics (Mr. M. Naeem) : The major thrust is the demonstration of how
microeconomic theory applies to industrial markets. The course is aimed at students who
are encountering the field of industrial economics for the first time. It focuses on the
theoretical and empirical aspects of how structure of the organization and conduct affect

economic performance and welfare.

Operational Research and Mathematical Programming (Dr. Naeem-ur-Rehman
Khattak) : The subject will basically take into consideration the different types of
programming techniques used for solving economics and mathematical problems.
Emphasis will be on Linear Programming, Integer Programming and Non Linear
Programming.

TRADEPOLICYOFPAKISTAN
PAKISTANSSTATEMENTONTHEMATICISSUES
25.01.2002
Mr.Chairman,
Letmebeginbythankingyouforhelpingusfixthe
parametersofourresponsetotheverypertinentand,ifImaysayso,
thoughtprovokingcommentsandquestionsofthedistinguished
delegates.Thethemesproposedbyyouarecomprehensiveandfacilitate
anorderlyresponse.Ishalltrytoconformtothecoverageaswellasthe
ordersuggestedbyyou.
FiscalRegime
2.
Wehavealreadyhighlightedtherevenueimperativesof
Pakistan.Weareacutelyconsciousofthenarrowtaxbaseasalsothe
temptationofeaseofcollectionratherthanamorefairandequitable
taxationsystem.Wearetryingtocorrectit.Thespecificmeasuresbeing
takenbyusare:
Widerapplicationofthegeneralsalestax(GST).Itssharein
taxcollectionhasgoneupfrom18%inFiscalYear1991to
38%inFiscalYear2001.Ourrelianceonthisformof
taxationisexpectedtogrowinthecomingyearsasweshift
toagenuinevalueaddedtaxation(VAT)system.
Page 2
2
Continuousreductionintheratesofcustomduties,coupled
withafasttrackeliminationoftheexemptionsregime.

TheIncomeTaxOrdinance2001providesforagreater
transparencyandpredictability,doesawaywithexemptions,
andchecksevasionandavoidance.Withtheintroductionof
thisnewtaxlaw,wehopetobeabletoreducetheexisting
hightaxrates,andthemultiplicityoftaxes.Allthisoughtto
contributetogreaterrevenuecollection,andastrongershift
awayfromtaxesontrade.
ExportDiversification
3.
Themainconstituentsofourstrategyforgreaterexport
diversificationandenhancedcompetitivenessare:
Goingupthevaluechainthroughpropersupplychain
managementandonshorecapacitydevelopmentofthe
exportingenterprises.
Afocusedprogrammeforthedevelopmentofsmalland
mediumenterprises.
Alargescalerevampofthephysicalandsocialinfrastructure
throughcomprehensivehumandevelopmentmeasuresand
greaterprivatesectorrole.
Page 3
3
4.
Itisourexpectationthatasoundmacroeconomic
framework,marketbasedpolices,andcurtailmentoftheroleofthestate
willyieldpositiveresultsforourexportdiversificationand
competitiveness.
5.
Regardingtermsoftrade,quitefrankly,weseelittlechances
oftheirimprovinginthepresentglobaleconomicscenario.
DebtRescheduling
6.
TherecentlyconcludedParisClubdeliberationsareexpected

toprovidethedesperatelyneededreliefondebtservicing.Pakistans
totaloutstandingexternaldebtasofSeptember2001was$38billion,of
which$12.0billionwasowedtoParisClubcreditors.InDecember2001,
theParisClubrescheduled/reprofiledthe$12.0billionexternaldebt.
TwothirdsoftheParisClubdebtwasconcessionalinnature(ODA),
whichwasrescheduledfor38yearsincluding15yearsgraceperiod.The
nonODAdebtwasscheduledfor23years,including5yearsgrace
period.
7.
WiththisdebtreschedulingtheNetPresentValueofour
externaldebtisexpectedtodeclinebyabout30percent.
8.
ParisClubdebtreschedulinghasprovidedsubstantialfiscal
spaceandtheGovernmentwillbeutilizingthisspacetoenhance
Governmentexpenditureonsocialsectors,povertyalleviation
programmes,andonphysicalinfrastructure.Webelievethat
Page 4
4
improvementinphysicalinfrastructureandhumancapitalwillgoalong
wayinraisingthecountryseconomicgrowthonasustainablebasis.
RoleofStateinEconomicActivity
9.
Likeseveralotherfriendswetoohavefoundthetemptation
todabbleinonestrainoranotherofsocialismhardtoresist;thoughitis
notsureifwediditoutofcommitmentorcompulsion,giventheprivate
sectordeficitinentrepreneurialskills,capitalandmanagement.Inthe
recentpastwehavemadevalianteffortstodrasticallycurtailtheroleof
thestateineconomicactivity.Thisisevidentindivesture,closureor
privatisationeffortsintheservicesandmanufacturingsectors.In
agriculture,too,ourrecentlyintroducedreformsareaimedatminimising
theroleoftheState,whetheritistheirrigationsystem,orfixationof
supportprices,orsubsidisedcredit,orprocurementandstorageof

grains.Wealsocontinuetoencouragetheprivatesectorinprovisionof
physicalinfrastructure.Wearetryingtodismantlethelastremaining
bastionofstatemonopolyintheRailwayssector.Concurrently,weare
settingupregulatoryauthoritiesinsectorssuchaspetroleumandgas,
powergeneration,insuranceetc.Pricecontrolshavebeenvirtuallydone
awaywitheveninsensitiveareaslikemotorgasolineetc.itistheOil
MarketingCompaniesthatfixthepricesandnottheGovernment.
10.Oureconomicrevivalprogrammewillhelptrade
enhancementbyputtingitonamorecompetitivebasis.Tariffreduction,
andtheconsequentcorrectionofantiexportbias,withdrawalof
subsidies,stableexchangerate,andaneffectiveeliminationofrent
Page 5
5
seekingopportunitiesoughttoputthefundamentalsofourtrade
endeavoursonamorefirmandsustainablefooting.Wealsohopethat
themacroeconomicandstructuralreformswillinducegreaterforeign
directinvestment,particularlyinexportorientedenterprises.
Investment&Privatisation
11.Wehaveafavourableinvestmentregimeindeedthe
Secretariatreportdescribesitasoneofthemostopenintheregion.With
stabilityensuingfromreforms,wehavehighhopesofstronginvestor
confidenceinPakistan.
12.Whiletherehasbeenconsiderableprogress,Ihavetoadmit
ourprivatisationprogrammehasfallenshortofourexpectations.Narrow
domesticcapitalandentrepreneurialbasecoupledwithexternalfactors
suchassanctionsetc,sheerenormityandcomplexityofthetask,and
wantofsufficientexpertisecombinedtoslowdowntheprivatisation
process.Theimportantthingisthatwearepursuingitwitharenewed
vigour.Itiswithoutdoubtoneoftheimportantpillarsofoureconomic
revivalprogramme.
MultilateralTradingSystem
13.IhavehadtheopportunitytoreiteratePakistans

unequivocalcommitmenttothemultilateraltradingsystem.Wehave
triedtohonourourWTOcommitmentsinletterandspirit,andifatall
therehavebeenlapses,thesehavebeenduetocapacityweaknesses
Page 6
6
ratherthananyintenttobypasstheWTOprocess.Inourstatements,
andinourwrittenanswerstothequestions,wehavetriedto
demonstratehowcloselywehavefollowedthespiritoftheWTO.The
Secretariatreportrecognisesthisatseveralplaces,particularlywherewe
havecompliedaheadofschedule.
14.DespitethemeasureswehavetakenWTOCouncil,WTO
CellintheMinistryofCommerce,WTOfocalpointsineachMinistry,
collateralorganizationsintheUniversitiesandtheChambersweare
morethanconsciousofourcapacitylimits.Wearegladthecapacityissue
figuredprominentlyattheDohaMinisterialandwelookforwardto
workingcloselywiththeSecretariatinthematterofcapacitybuildingand
technicalassistance.
15.Ourconcernsatanymeasurestounderminethemultilateral
systemhavebeenrepeatedlyarticulated.
TradeFacilitation
16.Pakistanhasbeenpursuingtradefacilitationinearnest.The
newImportPolicyandProcedureOrderisastepinthisdirection.
Simultaneously,therehasbeenanextensivedemystifyinganddebugging
ofthebanking,customsandportprocedures.Documentation
requirementsarebeingminimised.Pakistaniscurrentlyworkingona
WorldBankfundedtradefacilitationprojectforwhichUNCTADisthe
consultant.
Page 7
7
17.Pakistan,ofcourse,adherestotheMFNprinciplewithsuch

exceptionsasGATTpermits.Wewouldliketoclarifythattheduty
concessionsagreedtowiththeEuropeanUnionareapplicableonanMFN
basisandourtariffbindingshavealreadybeennotifiedtotheWTO.
18.Questionshavebeenraisedabouttheregistrationof
importers.Althoughitisaroutinemeasurewhereregistrationisalmost
automatic,wewouldliketorespondtoMembersconcernsinapositive
manner.AssoonasIgetbackhome,wewillseeifwecandoawaywith
thisrequirement.
19.OnCustomsValuationwehavemadearequestforrelaxation
inrespectofafewitemswhicharesubjecttorepeatedmalpractices.In
themeanwhile,wecontinuetoadheretothesystemsasembodiedinthe
AgreementonCustomsValuation.
Tariffs
20.AnumberofMembercountries,asindeedtheSecretariat,
havebroughtouttheanomalyinrespectof91items(8digitHScode)
whereourappliedratesexceedtheboundrates.Atleastpartofthe
explanationisinourdeterminationtocontroltariffdispersionandthe
annuallydiminishingboundratesdidnotcoincidewithourfourslabs.In
anyeventwehavealreadynotifiedtoWTOourrates,onabout80of
theseitems,thatwillbecomeeffective1
st
July2002.Inotherwords,on
mostoftheseitemsourappliedrateswillreachtheboundratesthree
Page 8
8
yearsaheadofschedule.Fortheremainingitems,weproposetotake
correctivemeasuresatthetimeofthebudget.
21.RegardingregulatorydutiesImustconfesswehave,inthe
past,usedtheseassurrogateantidumpingleviesaswedidnothavea
workingantidumpinglaw.However,nowtheCustomsActhasbeen
amendedtotakeawaythepowersfromtheCBRtoimposeregulatory
duties.Thesedutiescannowbeappliedonlyontherecommendationsof

theNationalTariffCommissionthatunderitsActisobligedtofollowthe
prescribedproceduresandhaveopenhearingswhereallinterested
partiesarepresent.
22.Wehavealreadysubmittedthatwearerapidlydismantling
theentireexemptionsregimeandtheremnantsareexpectedto
disappearsoonerratherthanlater.Asalreadyannounced,ourmaximum
tariffrate(barringcertainexceptionslikeautomobilesandalcoholic
beverages)istobecappedat25%.Thiswouldnecessitatean
adjustmentinthecurrentfourdutyrateslabs(5,10,20and30percent).
Thefournewslabsshallbeannouncedintheforthcomingbudget,when
wewillseethedesirabilityorotherwiseofhavingzeroasoneofthefour
dutyslabs.
23.TheNationalTariffCommissionActisbeingamended.
Legislationhasbeendrafted.Itsprincipalfunctionnowwillbetohandle
thetraderemedylaws.Thelawsthatweareintroducingonsafeguards,
antidumpingandcountervailingareinconformitywithprovisionsof
WTO.
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9
24.
Wearealittledisturbedontheissue,allegationifyouwill,
ofimportlicensing.Thisisoneofthesubjectsthatweproposetodiscuss
indetailwiththeSecretariat.Thereisnoimportlicensingrequirementin
Pakistananditappearstousthatitisbeingconfusedwithcomplianceof
certainhealth,safetyandotherrequirements.Wethinkwecanclarifythe
position.Thesameappliesequallytostandards,technicalrequirements
andSPS.Almostallofourstandardsareidenticalorsimilartothe
internationalonesandarecertainlynondiscriminatoryandinourview
reasonablytransparent.
GovernmentProcurement
25.PakistanisnotasignatorytotheAgreementonGovernment
procurementbutbynostretchofimaginationdoesitmeanthatwedo

notsubscribetotheprincipleoffaircompetitionandtransparency.The
proceduresarewellknownanddocumentedintheGovernment
procurementmanuals.Therearestringenttenderingrequirementsand
therearepropercommitteesforbidevaluationandcontractawards.
Recently,wehavedoneawaywithpricepreferencesthatthepublic
sectoragenciescouldprovidefordomesticallyproducedgoods.
ExportMeasures
26.InourReportwehaveparticularlystressedtherollbackof
subsidiesonexports.Wereiteratethatthereisnosubsidyonexport
finance,thatdutydrawbackrateshavebeenrationalizedonaninput
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outputcoefficientbasisforwhichaprofessionalbodyhasbeensetup,
andthattherearenofreightsubsidiesorcompensatoryrebates.Exports
areofcoursezerorated,whichisawellacceptedprincipleandduly
recognizedbytherelevantWTOAgreements.
TRIMS&TRIPS
27.
OnTRIMS,wehaveacceptedthedecisionoftheCTGof
November,2001andarenotsurewhatkindofclarificationsand
assurancesarebeingsought.
28.WeareveryconsciousofourIntellectualPropertyRights
obligations.Wehavenodoubtthatproperenforcementofintellectual
propertyrightsisinPakistansowninterestinviewoftheobvious
implicationsforinvestmentandcreativityinPakistan.Asstatedinour
report,wehaveamendedthelawsoncopyrights,trademarks,patents
andindustrialdesignandintegratedcircuitstomakethemWTO
compliant.Theplantbreedersrightslegislationisatanadvancedstage.
Toprovideforgreatestsynergy,integrationandgreaterexpertise,we
proposetosetupthePakistanIntellectualPropertyRightsOrganization
thatwouldbringunderoneumbrellathevariousagenciesdealingwith

intellectualpropertyrights.Ourobjective,quitesimply,istoensure
betterenforcement.Werealise,ofcourse,ourcapacityweaknessesbut
aredeterminedtocorrecttheseintheshortestpossibletime.
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SectoralPolicies
29.Inmysubmissionon23
rd
ofJanuaryIhadtheopportunityto
dilateupontheagriculturalsectorreformsprogramme.Thesereforms
willparticularlyfocusonmarketdrivenpolicies,curtailmentofroleof
publicsector,andpropoortargetingofsubsidies.Onexportsubsidieswe
willofcourseremainwithintheambitoftheAgreementonAgriculture.
30.ThereisnostatemonopolyoftradeinAgriculturalgoods.
TheTradingCorporationofPakistanhasanalmostinsignificantrolein
theexportofriceandcottonitsinvolvementislargelytherewherethe
buyerwishestodealwithapublicsectoragency.
31.Asalreadyreportedamajorinitiativetakenbyusistoallow
intratradeofagriculturalproductsregardlessofthedomesticshortageor
surplusposition.Weexpectpositiveresultsasbymakingthetrade
regimemorepredictableprivatesectorinvestmentsandmarketingefforts
willbestronglyencouraged.
Mr.Chairman,
32.Anumberofquestionshavebeenputontheservicessector,
particularlyinBanking,TelecommunicationsandInsurance.Tobequite
candid,theintensityandspeedofreformsinthesesectorshasleftus
somewhatbreathless.Creationofregulatoryauthorities,promulgationof
newlaws,privatisationactivities,averitablearmyofconsultants....all
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thisisbringingaboutrapidchangesthataretestingouradministrative
andmanagerialcapabilitiestothehilt.
33.However,wehavetakengoodnoteoftheissuesraisedhere
andthesuggestionsmade.Wewilltakeafreshlookatourcommitments
underGATSandtrytobeasliberalasourcircumstanceswouldwarrant.
Mr.Chairman,
34.Allowmetothank,onceagain,alltheMemberswhohave
takenthetroubletostudyourTradePolicy.Ihopethroughthis
statement,asalsoouranswerstothewrittenquestions,wehave
satisfactorilyaddressedtheirconcernsandprovidedthenecessary
clarifications.
Mr.Chairman,
35.Ithasbeenarewardingexperienceforourdelegationto
haveparticipatedinthisReview.ButbeforeIpartcompanyletuspause
foramomentandputtwoquestiontoourselves.
HasPakistan,givenitspresenteconomiclevels,done
enoughintermsofliberalisation?
Aretheseliberalisationeffortssustainable?
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36.WhileIwillencourageeverymemberheretoobjectively
evaluatethesequestions,Iamtemptedtosharewithyouthekindof
thoughtsthatfailtoescapeus:
First,untilsuchtimeasourexportdiversificationeffortsbear
fruitourcomparativeandcompetitiveadvantagesareonlyin
textilesandagriculture.Inboththeseproductgroupswe
facestrongbarriersquota,antidumpingmeasures,tariff
peaksandsubsidiesinourmajormarkets.
Second,ourtradeliberalisationisbeginningtoerodeour
domesticcapacitiesinchemicals,inengineeringand
electronicgoods,intheautomotivesector.Thesituationis
ofcourseexacerbatedwheresomeofthesuppliers,and

importers,resorttounfairtradepractices,includingexport
subsidies.
Third,foravarietyofpoliticalandeconomicfactors,
includingthedismantlingoftariffwalls,therehasbeena
declineindomesticandforeigndirectinvestment.
Fourth,marketaccessisconstrainedbytheproliferationof
regionalandotherpreferentialtradingarrangements.
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Mr.Chairman,
37.Pakistanseconomicsuccess,intheultimateanalysis,will
relycruciallyonamajorexportexpansion.Oureconomicrevival
programmewillsucceedonlyifwemanagetoattractsufficientlylarge
investments,particularlyinsectorswherewehaveacomparative
advantageTextilesAgricultureanditsderivatives,I.T.etc.
38.Itisoursanguinehope,andIfeelreassuredbythe
encouragingremarksthatIhaveheardinthisroom,thatthisTPRwill
recognisePakistansendeavoursaswellasitslimitationsandinduce,
particularlyourmajortradingpartners,tosupportPakistanstradeand
investmentenvironmentinamajorway.