In CGE-B89, each industry is assumed to produce only one distinct output which is an imperfect substitute for comparable imports. No multi-product industries and multi industry products are considered. As a result, the number o f industries is equal to the number of commodities; the industry classification completely represents commodity classification.
The 47 industries in the NBR Input-Output Table for 1989 are reduced to only 19 sectors in the database for CGE-B89. The aggregation has been done by simple arithmetic sums and thus implies that (i) all the intra-industry flows of and inter industry flows among the constituent industries represent only intra-industry flows of the newly constituted industries, (ii) all the inter-industry flows into the constituent industries constitute intermediate purchases of the newly constituted industries to which they belong, and (iii) all outflows from the constituent industries represent intermediate sales of the aggregated industries to which they belong.
Under various considerations, many industries in the condensed input-output table have been taken straight from the 1989 NBR input-output table without any modification. Industries in the 1989 input-output table which produce the major exportables, namely, jute, tea, fish, ready-made garments, jute textiles and leather, have been kept as separate industries. Since one of the objectives of the various plans is the attainment of self-sufficiency in food, staple food producing industries, namely rice and wheat, have been considered as separate industries. Large industries such as sugar, paper, chemicals, which are highly protected have been taken from the 1989 original table individually without aggregation. It would be o f interest to examine how they perform when protection is withdrawn partially or fully. The government has advanced various export incentives to develop backward linkages of the ready-made garment industry. In this regard, cotton textiles are o f particular interest. To administer
the various industrial policies such as tariffs and non-tariffs, the government has to
incur costs. To see how public administration fares under trade liberalization, public
administration has been considered as a separate non-tradable industry. A complete list
of industries/commodities is given below in Table A5.1.
While implementing the model, industries/commodities are classified in three broad categories - exportables, importables, and non-tradables. In the presence of intra-industry trade, it is usually very difficult to classify strictly these into exportables and importables. Fortunately, for major exports namely, jute, fish, tea, and jute textiles, there are no imports, hence they can be clearly defined as exportables. Where intra-industry trade exists, exportables and importables are defined on the basis of the observed values of exports and imports in the input-output table. An industry whose export value far exceeds its import value is labelled as exportable. In some instances, earlier input-output tables have been consulted to double check that the choice is not accidental. Examples are, ready-made garments and leather. Intra-industry trade exists in these industries but exports far exceeded imports in both cases. They have thus been classified as exportables. All the industries producing various services (with no exports and no imports) are classified as non-tradables. Importables have thus been defined residually in Table A5.1.
Table A5.1: Aggregation scheme used with 1989 1-0 table
19-Industry Classification 47-Industry Classification
in 19891-0 table1
I E x p o r t a b l e s
1. J u t e Jute: (P r o d u c tio n , P r o c e s s in g , and
B a ilin g ) 2. T e a T ea : (P r o d u c tio n , P r o c e s s in g , and B le n d in g ) 3 . F i s h F ish : (R e a r in g , C a tc h in g , and P r o c e s s in g ) 4 . R e a d y - m a d e g a r m e n t s R e a d y -m a d e g a r m e n ts 5. J u t e t e x t i l e s Ju te te x tile s :(J u te t e x t ile s , c a r p e ts , R u g s , C o r d a g e , R o p e s , and T w in e s ) 6. L e a t h e r L e a th e r and le a th e r p r o d u c ts 7. F o r e s t r y F orestry I I . I m p o r t a b le s 8. R i c e R ic e : ( g r o w in g and p r o c e s s in g ) 9 . W h e a t W h e a t: (g r o w in g and p r o c e s s in g ) 1 0 . E d ib le o il E d ib le o il 1 1 . O t h e r a g r i c u l t u r e O th er c r o p s , S u g a r -c a n e p r o d u c tio n , C o tto n p r o d u c tio n an d g in n in g , R a w to b a c c o p r o d u c tio n , S a lt, L iv e s t o c k in c lu d in g h id e s , an d s k in 1 2 . S u g a r S u g a r 13. C o t t o n t e x t i l e s C lo th :M ill, C lo th : H a n d lo o m 1 4 . P a p e r P a p er 1 5 . C h e m i c a l s C h e m ic a ls 1 6. O t h e r m a n u f a c t u r e s F e r tiliz e r , P h a r m a c e u tic a l, P e tr o le u m p r o d u c ts , M e ta l p r o d u c ts , S te e l and B a s ic M e ta l, M a c h in e r y , W o o d and W o o d P ro d u cts T r a n sp o r t e q u ip m e n t. III. N o n - t r a d a b l e s 17. P h y s i c a l o v e r h e a d s H o u s e b u ild in g , O th er c o n s tr u c tio n , E le c tr ic it y , G a s , T r a d e , and T ra n sp o rt s e r v ic e s , B a n k in g , In s u r a n c e , H o u s in g s e r v ic e s , 18. S o c i a l o v e r h e a d s H e a lth , and E d u c a tio n s e r v ic e s
1 9 . P u b l i c a d m i n i s t r a t i o n P u b lic a d m in istr a tio n s e r v ic e s ,
P r o f e s s io n a ls and O th ers
Note: 1 Names in parentheses are the constituent industries of the 1989 NBR 1-0 table.
Source: Bangladesh, Government of, 1991. Input-output table: 1988-89, mimeo, National Board of Revenue, Dhaka.