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Wednesday, 27 July 2011

Discuss the export performance of Pakistan or discuss the trend of foreign trade in Pakistan

Export Performance :-
After partition the foreign trade of Pakistan was also affected like other sectors of the economy. But after the establishment of some industries exports were increased. We can study the export performance under three different periods :

1. Performance From 1948 to 1971 :-
Before the partition internal and external trade was controlled by the English Rulers so foreign trade was affected very badly after 1947. In 1948 the government of Pakistan increased the import of consumer goods t remove the shortage in the country. It expanded the volume of exports. About 60% of the total exports of Pakistan were purchased by the India in the early years.

2. Demand of Devaluations Refused :-
In 1949 Pakistan refused to devalue the currency and India refused to purchase the Jute and Cotton of Pakistan. So Pakistan decided to develop the trade relations with other countries like U.K, France, Germany and Italy.

3. Effects of Korean War :-
The exports of Pakistan's raw material increased due to Korean war. India government also decided to import the Jute of Pakistan. But the prices of Pakistan's exports increased. The exports value decreased due to fall in the prices of raw material in the world market.

4. Devaluation of Currency :-
The government of Pakistan reduced the value of Pakistani currency upto 30% in 1955 to encourage the exports. There was a continuously fall in exports except one year after devaluation.

5. Martial Law 1958 :-
In 1958 Martial Law was imposed and government introduced export Bonus Scheme. It increased our exports but due to heavy imports our balance of trade remained unfavorable.

6. Second Five Year Plan Period (1960-65) :-
In the second five year plan due to liberal import policy our balance of trade remained unfavorable.

7. Third Five Year Plan Period (1965-70) :-
In this period also export performance remained very poor due to many reasons like political disturbance and increase in imports. Later on the war of 1965 created more problems for exports.

8. Separation of East Pakistan :-
After the separation of East Pakistan export policy was revised by the government.
Following measures were taken to increase the exports of the country.
1. Export Bonus Scheme was abolished.
2. Currency was devalued upto 131%.
3. Multiple exchange rate system was finished.
4. Trade agreements were made with Muslim Countries.
The above measures increased the exports in 1971-72 to Rs. 10161.2 million. There was a marginal increase in the value of exports upto 1976-77.

Following were the main causes of low exports :
1. Nationalization of industries.
2. Frequent changes in fiscal and monetary policies.
3. Floods.

During the 1977-81 there was an increase in the exports. However in 1981-82 the increase in as fallen upto 17%. It has the following reasons :
1. The consumption of goods increased at home and exports reduced.
2. The demand of our exports reduced in the world market.
3. Fall in the terms of trade.
4. Unfavorable Global conditions.
5. Afghan Refugees Problem.

Relinking of Dollar in 1982 :-
The government of Pakistan adopted various measures like relinking of dollar to improve the exports. In the year 1987-88, Pakistan earned 4.4 billion dollar from exports. Cotton and cotton product is the major source of foreign exchange. The present government is also stressing more on the export of manufactured goods and value added goods. The total value of export during 1993-94 was 6.75 billion dollars. The trade deficit during 1995-96 was 3.75 billion dollars. During the year 1998-99 the trade deficit was 1.65 billion dollar and 1.60 in 2000-2001.
After studying the exports performance we can say that now the share of manufactured goods is increasing in the exports and it is good sign for Pakistani economy.

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