Trade liberalization and less tariff protection will no doubt have a negative effect on producers. More important than the quantity of investment is where the investments are going to go. People only think of tariff reduction in terms of what it will do to domestic industry. 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.