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GTAP Resources: Resource Display

GTAP Resource #4717

"Modelling the Impacts of Large New Projects in Saudi Arabia"
by Roos, Louise and Philip Adams

The Centre of Policy Studies (CoPS) has been contracted by the National Industrial Clusters Development Program (NICDP, Saudi Arabia) to build a CGE model of the Saudi Arabia economy designed to assist the NICDP to:
1. screen projects in a wide range of industry areas such as metals manufacturing, chemical refining, vehicle assembly and pharmaceutical formulation;
2. evaluate alternative policy options across a range of fiscal instruments (e.g., phasing out of fuel incentives) and ideas to stimulate regions and to stimulate new industry clusters;
3. generate information which would allow the NICDP to better track progress in economic diversification and productivity enhancements; and
4. produce medium and long term detailed economic forecasts on relevant indicators (e.g., for various labour skill requirements).
CGE models explicitly model and link industries with each other and other economic agents through market clearing equations. Also, CGE models capture the disaggregated nature of an economy and are rich in sector-specific data. This makes CGE models a powerful tool for screening projects and evaluating new policies and policy changes. For example, to screen a new petrochemical project, initially the NICDP requires data on operating costs, likely sources of revenue, borrowing requirements and ownership (foreign versus local). These data enable an initial assessment of the value of the project to the Saudi Arabia economy. But that assessment does not account for:
• flow on effects to other industries (supplying inputs to the new refinery and receiving the new refinery output);
• generalised indirect effects via changes in the exchange rate (if the project has large export potential) and via changes in wage relativities as demand for some occupations rises and demand for other occupations falls;
• the fiscal implications of the new project – perhaps increased taxation receipts offset, potentially, by increased government incentive payments to th...

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Roos, L. (4/14/2015)
Updated: Roos, L. (4/14/2015)
Visits: 1,381
- Baseline development
- Dynamic modeling

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Revised paper with simulation design and results will be upload at a later stage

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