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Inequality and Poverty Impacts of Trade Distortions in Mozambique

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World Bank (WB)

Abstract: Although Mozambique has considerable agricultural potential, rural poverty remains extremely high. This paper examines the extent to which global and domestic price distortions affect agricultural production and national poverty. The author develops a computable general equilibrium (CGE) and micro-simulation model of Mozambique that is linked to the results of a global model. This framework is used to examine the effects of eliminating global and national price distortions. Model results indicate that agriculture is adversely affected by current trade distortions due to policies in the rest of the world. While a removal of all merchandise trade distortions will reduce import prices, it will also raise agricultural production and reduce poverty. By contrast, removing only agricultural price distortions abroad will have little effect on Mozambique's agricultural sector. Model results indicate that Mozambique's own distortions are also biased against agriculture, with producers of processed agricultural products enjoying high protection levels. Removing these distortions causes a significant expansion of agricultural Gross Domestic Product (GDP) and a reduction in both poverty and inequality. The findings therefore suggest that removing own-country and rest-of-world distortions will have positive implications for agriculture and for the overall economy in Mozambique, and in particular it will reduce its poverty and inequality.
Type: Working Paper
Publications & Research :: Working Paper
Publications & Research
Link: http://hdl.handle.net/10986/28176
Subject: AGRICULTURAL COMMODITIES
AGRICULTURAL ECONOMICS
AGRICULTURAL EXPORT
AGRICULTURAL EXPORTS
AGRICULTURAL GOODS
AGRICULTURAL GROWTH
AGRICULTURAL IMPORTS
AGRICULTURAL INCENTIVES
AGRICULTURAL LAND
AGRICULTURAL MARKETS
AGRICULTURAL POLICY
AGRICULTURAL PRICE
AGRICULTURAL PROCESSING
AGRICULTURAL PRODUCTION
AGRICULTURAL PRODUCTIVITY
AGRICULTURAL PRODUCTS
AGRICULTURAL SECTOR
AGRICULTURAL SECTORS
AGRICULTURAL TECHNOLOGY
AGRICULTURAL TRADE
AGRICULTURAL TRADE LIBERALIZATION
AGRICULTURAL VALUE
AGRICULTURE
AGRICULTURE INDUSTRY
BEVERAGES
BILL
CAPITAL GOODS
CAPITAL INTENSITY
CAPITAL RETURNS
CASHEWS
CASSAVA
CENTRAL PLANNING
CEREALS
CIVIL WAR
COMMODITIES
COMMODITY
COMPARATIVE ADVANTAGE
COMPETITIVENESS
CONSTANT RETURNS TO SCALE
CONSUMER PRICE INDEX
CONSUMER SPENDING
CONSUMPTION EXPENDITURE
CORPORATE TAX
COST OF CAPITAL
COST OF INVESTMENT
COTTON
CROPS
CURRENT ACCOUNT
DEMAND CURVES
DEPRECIATING EXCHANGE RATE
DEPRECIATION
DEVELOPING COUNTRIES
DEVELOPING COUNTRY
DISTORTIONS
DIVIDENDS
DOMESTIC DEMAND
DOMESTIC GOODS
DOMESTIC PRICE
ECONOMIC GROWTH
ECONOMIC LIFE
ECONOMIC PERFORMANCE
ECONOMIC SITUATION
ECONOMIC STRUCTURE
ELASTICITY
ELASTICITY OF DEMAND
ELASTICITY OF SUBSTITUTION
EXCHANGE RATE
EXCHANGE RATE INCREASES
EXPANSION OF EXPORTS
EXPORT
EXPORT COMPETITIVENESS
EXPORT EARNINGS
EXPORT SECTORS
EXPORT SUBSIDY
EXPORTS
EXTERNAL BALANCE
FACTORS OF PRODUCTION
FARM
FARM PRODUCTS
FARMERS
FISCAL DEFICIT
FLEXIBLE EXCHANGE RATE
FOOD CROP
FOOD IMPORTS
FOOD POLICY
FOOD POLICY RESEARCH
FOOD PRICES
FOOD PROCESSING
FOOD PRODUCTS
FOREIGN CURRENCY
FOREIGN DIRECT INVESTMENT
FOREIGN INVESTMENT
FOREIGN MARKETS
FOREIGN OWNERSHIP
FRUITS
FULL LIBERALIZATION
GDP
GENERAL EQUILIBRIUM
GENERAL EQUILIBRIUM ANALYSIS
GINI COEFFICIENT
GLOBAL MARKETS
GOVERNMENT INTERVENTION
GOVERNMENT INVOLVEMENT
GRAIN
GRAIN TRANSPORT
GROUNDNUTS
HOUSEHOLDS
IFPRI
IMPORT
IMPORT DEMAND
IMPORT PRICES
IMPORT TARIFFS
IMPORTS
INCOME
INCOMES
INEQUALITY MEASURES
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
INTERNATIONAL MARKETS
INTERNATIONAL TRADE
INVESTMENT DEMAND
LABOR MARKETS
LEVEL OF INVESTMENT
LEVY
LIBERALIZATIONS
LIVESTOCK
LOCAL CURRENCY
MACROECONOMIC BALANCE
MACROECONOMIC SIMULATION
MAIZE
MARGINAL COST
MARGINAL REVENUE
MARKET ECONOMY
MARKET PRICES
MEAT
MEAT PROCESSING
MILLING
NATIONAL INCOME
NATURAL RESOURCES
NOMINAL DEPRECIATION
NOMINAL WAGE
OUTPUT
PENSIONS
PESTICIDES
POULTRY
POVERTY REDUCTION
PRICE DISTORTIONS
PRICE INDEX
PRICE OF SUGAR
PRIMARY PRODUCTS
PRIVATE CONSUMPTION
PROCESSED FOODS
PROFIT MAXIMIZATION
RAPID GROWTH
REAL APPRECIATION
REAL EXCHANGE RATE
REAL GDP
REAL INVESTMENT
REFORM PROGRAM
REGIONAL MARKETS
RELATIVE PRICES
REMITTANCES
RURAL AREAS
RURAL INFRASTRUCTURE
SAVINGS
SKILLED WORKERS
SMALL COUNTRY
SMELTING
SUGAR
SUGAR PROCESSING
SUGAR SECTORS
SUGARCANE
SUPPLY RESPONSE
SURPLUS
SURPLUSES
TARIFF REDUCTIONS
TAX
TAX RATE
TAX RATES
TAX REVENUES
TAXATION
TEA
TOTAL EXPORTS
TOTAL IMPORTS
TRANSACTIONS COSTS
TUBERS
VALUE ADDED
VEGETABLES
VOLUME
WAGES
WHEAT
WORLD DEMAND
WORLD PRICE
WORLD PRICES
WORLD TRADE




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