Valuating of Liberalization Trade Effects on Iran's Hand-knitted Carpet Industry by Using Policy Analysis Matrix (Case Study: Qom Province)

One of major issues of the countries, especially developing countries, is expanding globalization process and the way of facing with it. Globalization is not a process that be encountered similarly in all countries but those who recognize its all aspects could utilize more and make better use of opportunities it makes; consequently, they could compete well in international community. Knowing competitive and comparative advantages of different sectors of country's economics can be a significant change to the rising of competitiveness. Since the hand-knitted carpet industry is one of the sectors that promise high non-oil export potentials, this paper concentrates on this industry and utilizes the Policy Analysis Matrix (PAM) to calculate indexes of competitiveness and comparative advantage in the hand-knitted carpet industry. As the province of Qom is one of the major producers of high quality marketable carpets, the paper concentrates on this area. The province has a long history of producing unique carpets in terms of design, weaving quality, coloring and other qualities. At present, Qom stands ready to supply the export market with enough of 65 knots hand-knitted silk carpets. So for evaluating trade globalization's effects on hand-knitted carpet industry, we use data and information about that kind of carpet in 1385. Results show that the index of the competitiveness of Qom hand-knitted silk carpets is 93% and its comparative advantage based on unit cost that would hold when Iran joins WTO is 84%. These indexes indicate that Qom hand-knitted silk carpets score high both in terms of competitiveness and comparative advantage.