be an assembly of tradable inputs. In fact, raw material represents about 60 percent of the products value.

_A note on the public sector_ According to CAPMAS data for 2007/2008 the public sector represents 35 percent of the gross value of output, which might appear large except that petroleum products and derivatives represent 75 percent of the total public sector output. Thus the share of the public sector in the non-oil-related sector is now about 9 percent. Moreover, the net value added of the private sector – even including petroleum – is five times that of the public. The government maintains a role in industries outside of extraction and refinement of oil, which might be considered “strategic”: spinning and fiber textiles, sugar and refining, tobacco, coke, steel, and non-ferrous metals. These six sectors, plus petroleum extraction and refining, make up 91 percent of the gross output of the public sector.

The ERPs in the public sector have fallen between 1999 and 2009, except for the case of glass and glass products.<sup>10</sup> The average for those industries still public fell to 37 percent from 122 percent across public industries in 1999. And the dispersion of ERPs also fell notably: from 145 to 63 percent. The reader will note that in Table 4a one public sector activity has a high and negative ERP using the 2009 tariff data (soap, perfume and cosmetics). This is because under some conditions, value added without intervention is _negative_ – the cost of importing these goods (at social costs for tradables) would be less than the cost of domestic production. That is, using the notation of the formulas above, _VgH_ < 0 . For example if value added with interventions is positive, say 100, and without interventions is negative, say –10, then interventions would be benefiting the sector by a positive 110, But the ERP would be negative – in this example, _minus_ 11. This is a quite different situation from the case of interventions _dis_ protecting or net-taxing a sector, as is observed for fertilizers and cement. The ERP in the latter case of taxation would be negative, but due to the numerator being negative: the value added without “protection” would be greater than the actual, observed value added. For this public sector industry, the high negative value is actually signaling very high protection rates.

# _ERPs by selected industries for 2009, including estimated NTB equivalents_

The Nathan and Al Iskandarani studies for the late 1990s did not include NTBs. For the present study, as discussed above, the tariff-equivalents of NTBs were estimated for 16 industries using comparisons of domestic and border prices (as detailed in Annex 3). Table 4b presents the ERP estimates that include the NTB ad valorem equivalents for both outputs and inputs (as discussed in Section 5) for both public and private industries. The inclusion of the tariff-equivalent NTB estimates increases the dispersion of ERPs, increasing the standard deviation in the private sector from 71.7 percent without NTBs to over 5000 percent with NTBs. This increase in the dispersion of ERPs is because the ad valorem addition to protection of industries due to NTBs ranges from

> 10 Note that by 2009, there were five industries with no public sector involvement that did have involvement in 1998: #1722, 2102, 2893, 2921, and 2930.

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