It is important to remember that tariff reductions are tax reductions and will bring lower prices for the segments of society. This will put more purchasing power in the hands of the consumers. Trade liberalization encourages investments to flow into the most competitive sectors. In a protected economy all the resources flow into sectors protected by high tariff barriers and are highly inefficient. Tariffs create an anti-export bias because they encourage resources to flow into away from sectors where you have a natural advantage., the export sector.
Trade liberalization gives investors the signal to move into exports.
The IFC s pledge was realized through the publication of an index for the Egyptian stock market. The Egypt index which tracks the daily performance of the stock market, is carried by major financial news services and publications as of October 1, 1996. At the beginning of next year, Egypt will also be included in the IFC s Global Composite Index which weighs countries according to volume of trading and capitalization of their stock markets relative to other markets. The Alexandria Iron and Steel Company has also been provided with like facility. The Egypt Trust Fund, listed in London and managed by Lazard Feres, limits itself to investing in listed Egyptian securities.