Kathmandu, May 5 :

Economists and experts proposed for adopting proper macro-economic models in a bid to properly evaluate country’s trade and economic policies as well as carry out impact assessment of major national programmes.

They proposed for the adoption of models like Social Accounting Matrix (SAM) and Computable General Equilibrium Model (CGE) for policy analysis and evaluation of major development agendas impact like the Millennium Development Goals (MDGs), Poverty Reduction Strategy Paper (PRSP) and other national programmes.

Speaking at a programme organised by the Ministry of Industry, Commerce and Supplies MOICS), Enhancing Nepal’s Trade Related Capacity (ENTReC-UNDP) and Institute for Policy Research and Development (IPRAD) yesterday, Dr Posh Raj Pandey, member of the National Planning Commission (NPC) commented that CGE and SAM models leave an impact result of the policies and programmes.

“The government is implementing these models for national economic development and poverty reduction initiatives.”

Dr Pandey said, “if we change our resource allocation in certain sectors, what impact economy will have. CGE and SAM models can be effective tools to review in such conditions.”

“We need to build our mechanisms to see effective implementation of such macro-econometric models so that implementation of policies impact for poverty reduction and economic advancement would be realised,” he added.

Presenting a paper on ‘SAM and CGE: Use in Trade Policy Analysis,’ Dr Dilli Raj Khanal, CPN-UML lawmaker highlighted the importance of macro-economic models and their effective implementation in Nepali economy in a changed trading environment.

Dr Khanal said that the need has increased to construct such models to analyse impact of our economic activities such as PRSP’s implementation, MDGs achievements and sectoral assessment of various economic factors.

The models, according to him, will do proper assessment of effect in policy changes and impact on the sectors such as taxation and expenditure policy, growth and poverty reduction.

Dr Khanal asked that CGE models be installed in NPC, MoICS and Nepal Rastra Bank (NRB) to pave a way for integration into Global Trade Analysis Project (GTAP) system.

Dr Sri Ram Raj Pandey, advisor of UNDP commented that such CGE and SAM models are necessary to study on how interventions are being made on national economic development initiatives of the country. “Such models also help us in analysing the impact,” he said.

“SAM and CGE are needed for carrying out need assessment of MDGS to achieve the expected results,” he said adding that these models help in making estimates on the sectors such as human resource, financial resources, local resources and foreign aid for a country’s economic development.

Purushottam Ojha, acting secretary at the MoICS on the occasion said that timely adjustment of national economic policies is essential for expected results in a changing global trade regime especially after Nepal’s accession to the World Trade Organisation.

Gopal Tiwari, private sector development officer at ENTReC-UNDP said that after Nepal’s entry into the global trade body, there is an urgent need to construct such models that will help in understanding the dynamic effects of trade liberalisation and potential areas that give plus points for domestic producers and exporters.