Magazine article Economic Review

The State of Pakistan's Foreign Trade 1990-91

Magazine article Economic Review

The State of Pakistan's Foreign Trade 1990-91

Article excerpt

The State of Pakistan's Foreign Trade 1990-91

The trade year witnessed some discouraging global developments like the downfall of communism in its fatherland - the USSR and trend toward disintegration of that country, the Gulf War and destabilization of foreign trade of that region and reduction of foreign aid to Pakistan from all major donors and almost complete stoppage from the USA, which is now the only global super power. These developments reduced the inflow of foreign exchange resources under aid and necessitated the rapid development of trade to offset losses under aid.

The Ministry of Commerce, Government of Pakistan has been publishing this useful book since 1987. Last year (1989-90), two versions were issued. For 1990-91, however, only one version has been published. This paper bound publication on art paper with five get up covers all aspects of foreign trade of Pakistan for the year 1990-91. It was printed in September 1991 and was made available to the press in October 1991. The publication has been made public in time - within four months of the close of the year. Further, the Government has done well to print only one publication on the subject instead of two and economies in expenditure. Other Government Ministries and Departments should make similar efforts.

Broadly speaking, the publication has two major parts. The first part contains an analytical presentation of various components of foreign trade with main thrust on the current year's (1990-91) developments. The second part consists of historical series of foreign trade statistics since 1977-78. The foreign trade statistics and analysis included in this publication are based on the data provided by the Federal Bureau of Statistics. According to the Federal Secretary Commerce (in preface), "While preparing this document, every endeavour has been made to present the data in an objective and analytical manner".

The trade year witnessed some discouraging global developments like the downfall of communism in its fatherland - the USSR and trend toward disintegration of that country, the Gulf War and destabilization of foreign trade of that region and reduction of foreign aid to Pakistan from all major donors and almost complete stoppage from the USA, which is now the only global super power. These developments reduced the inflow of foreign exchange resources under aid and necessitated the rapid development of trade to offset losses under aid.

Pakistan did well in foreign trade in 1990-91. Both exports and imports exceeded their targets but improvement was far larger in former than latter and there was a significant improvement in actual trade balance over the targeted one. The export target was fixed at $5,494 million in the trade policy. According to the publication under review, actual exports were estimated at $6133 million - an increase of 24 per cent over exports in 1989-90. The target of imports for 1990-91 was fixed at $7,421 million, against which actual imports were recorded at $7,616 million. Thus the actual trade deficit in 1990-91 was $ 1,483 million against the anticipated deficit of $ 1,927 million.

There was also an improvement in trade deficit in 1990-91, if compared to the preceding year and it was the lowest during the last seven years. The table below shows the balance of foreign trade in 1989-90 and in 1990-91, target and actual.

Pakistan Balance of Trade in 1989-90 and 1990-91 (Target and Actual)

                            ($ million)
Years      Exports   Imports   Balance
1989-90       4954      6935     -1981

1990-91 (Target) 5494 7421 -1927

1990-91 (Actual) 6133 7616 -1483

Thus there was an improvement of $444 million in actual over target of 1990-91 and of $ 498 million in 1990-91 over 1989-90. There was also an improvement in the export-import ratio in 1990-91. In 1989-90 exports were 71 per cent of imports. …

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