Pakistan Agricultural Export Performance in the Light of Trade Liberalization and Economic Reforms

The objective of this paper is to see the impacts of economic reforms and trade liberalisation policies on agricultural export performance of Pakistan. The major purpose is to examine the effects of both domestic supply-side factors and world demand on agricultural export performance. Four indicators of economic reforms and trade liberalisation policies are considered namely competitiveness, diversification, openness and world demand for agricultural products; these indicators capture the effects of both domestic supply-side policy reforms and world market potential. The effects are analysed in dynamic term both in the long-run and short-run, using co integration and vector error correction (VECM) methods. The empirical results suggest that agricultural export performance is more sensitive to the domestic supply-side conditions, which change due to the policies, discussed. These findings support the importance of domestic policies designed to improve domestic supply conditions aimed at promoting agricultural exports. The empirical conclusions also indicate that there exists a unique long-run or equilibrium relationship among real value of agricultural exports, competitiveness, diversification, openness and world demand for agricultural product