possible. One would have to investigate the institutional arrangements in some of these markets to see if these high NTB estimates are reflecting true policy-related barriers to imports, or are reflecting missing costs that would raise marketing margins and so reduce the true NTB wedge. Another question regards the specific policy instruments that are generating these barriers. If these NTB estimates are approximately true, it would indicate a rather aggressive industrial policy, favoring certain activities (firms) relative to others. We note that there is a correlation between higher NTB ad valorem wedges and formal tariffs. From the subset of activities for which we have estimates, the price impacts of NTBs tend to increase with the domestic share of value added, which suggests that NTB might be protecting activities involving high levels of employment. This hypothesis could not be test in this study.

For the estimation of ERPs with NTB effects in the case of specific industries (Section 6), we use the ad valorem estimates of Dr. Hanafy for the outputs, and for tradable inputs we use the average of 9 percent NTB equivalent associated with low-value added products. (Cement is the only exception, where there appears to be little applied tariff or NTB restrictions on product or raw materials.) For ERP estimates for the aggregate sectors from the input-output matrix (Section 7), there are only six sectors to which we add to the applied tariffs the estimates of the ad valorem effects of NTBs (see Table 5b). The sectors to which were applied NTB estimates were those that corresponded most closely to the specific industries and products for which tariff-equivalent estimates were available at the disaggregated industry level from Dr. Hanafy. There are three sectors to which we applied the average tariff-equivalent of 9 percent (i.e., excluding the highvalue-added goods mentioned above); and there are three sectors that closely matched the industries for which we apply the NTB estimates directly (textiles, fertilizers, and iron and steel).<sup>9</sup> For the five non-tradable sectors NTB, tariff equivalents are not applicable. For other tradable sectors to which are applied zero NTB equivalents, no information is available and no significant NTB effects were assumed. Nevertheless, the ERPs of those sectors will also be indirectly affected by NTB through changes in the cost shares of inputs directly impacted by NTBs.

# **6. Results: Levels and Dispersion of ERPs across Selected Industries, Tariffs Only (without Energy Subsidies), Comparing 2009 with the Late 1990s**

Table 4a presents the ERP results for private and public industries, comparing ERPs using 2009 applied tariff data and the tariffs used in the Nathan study of the late 1990s (which did not include NTB adjustments). ERPs for 2009 that include estimated NTB effects are discussed below.

We first concentrate our discussion of the private sector results in Table 4a. On average, ERPs in the private sector declined from 86 percent to 45 percent (excluding sector 2102 – boxes and container, which as discussed below is a special case). And as can be seen in Annex Table 1, applied tariffs – that is, nominal rates of protection – also declined generally across the board. In addition, the dispersion of ERPs, as measured by the standard deviation, fell from 1999 to 2009 (from 192 to 57 percent, excluding sector 2102).

> 9 The sector “textiles” matches with ISIC #1711 (spinning, weaving and finishing), the sector “fertilizers” matches with ISIC #2412 (manufacture of fertilizers and pesticides), and the sector iron and steel matches with ISIC #2710 (manufacture of iron and steel basic industries).

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