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Research Proposal:
Impacts of South-Asian Regionalism on the Efficiency and Equity of the Sri Lankan Economy.
Sri Lanka has been playing an active role in forming bilateral and regional trade agreements with its neighboring South Asian countries, gradually liberalizing its agricultural trade. The implications of such trade agreements could have significant impacts on the status of poverty in Sri Lanka, as poverty is predominantly a rural-agricultural phenomenon in the country. The purpose of this study is to quantify the impacts of selected regional and bilateral trade agreements on the efficiency and equity of the Sri Lankan economy. The specific objectives are: (1) to evaluate the impacts of trade agreements on export and import prices of key agricultural commodities faced by Sri Lankan producers and consumers, using the Global Trade Analysis Project (GTAP) model, (2) to evaluate the efficiency of price transmission from the border to local farm and retail markets in Sri Lanka using a time series econometric model, and (3) to evaluate the impacts of changes in farm and retail prices on national and regional poverty status using Foster-Greer-Thorbecke (FGT) indices. The results of this study will help to explain the complex linkages between agricultural trade liberalization and poverty in Sri Lanka. It may help policy makers to identify trade negotiations which would improve economic efficiency without sacrificing equitable outcomes.
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