CIE Question.
Chap-10 Trade
(a) (i) Complete Fig. 3.1, which is a divided bar graph, using the information below to show the
employment structure of Pakistan:
S p t
[4]
Fisherman Builder Nurse
Miner Chef Train Driver
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(b) (i) Study Fig. 3.2, a world map. Shade and label two countries that are major importers of
products from Pakistan.
(ii) Name three major products that are imported into Pakistan.
1 Machinery..................................................................
2 Oil reserves ...............................................................
3 Vehicles............................................................
[3]
(c) (i) Define the term ‘trade deficit’.
Trade deficit is a negative balance of trade where the value of imports exceeds the value of the exports .
[1]
(ii) Study Fig. 3.3, a bar graph showing the exports and imports of Pakistan in millions of rupees.
+23519
Increased
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(iii) Explain why Pakistan has a trade deficit. You should develop your answer.
The main reason of Pakistan's trade deficit is the high-value imports and low-value exports. The country
imports costly items like electronics, oil, and machinery, which strain the economy. In contrast, it exports
mainly agricultural and basic manufactured goods, which don't meet domestic needs and doesn’t
contribute effectively to the GDP of Pakistan. This imbalance drives the trade deficit. As in the fiscal
year of 2024 a trade deficit of $17.03 billion approximately 25% was seen to $22.69 billion in the same
period of the previous year.
Similarly, trade barriers are often imposed that restricts Pakistan to develop its export market. As public
opinion, deep concerns had been expressed on the industrial scenario of Pakistan facing major issues on
labor, environmental health standards, child labor, unpleasant working conditions, etc. As for instance
the USA withdrew the general system of preferences for carpets and rugs, sports good and surgical
instruments on the issue of child labor that brought significant issues for Pakistan adversely affecting its
balance of trade.[4]
(d) The negative Balance of Payments needs to be corrected in order to ensure future economic
growth. Read the following two views about correcting the Balance of Payments in Pakistan:
Which view do you agree with more? Give reasons to support your answer and refer to
examples you have studied. You should consider View A and View B in your answer.
I agree with view A as Pakistan's economic growth depends on its exports, which earn foreign
income to finance imports and address the persistent balance of payment deficit contributing
efficiently as Pakistan has a huge potential to develop its software department as the global
demand for software and IT solutions is rising, with the market expected to grow at an 11.72% CAGR
from 2016 to 2022. Pakistan’s IT exports increased by 44% to USD 379 million in the first quarter of
2020-21, showing great potential. With minimal government support, the sector could contribute USD 1
billion annually. The Trade Development Authority of Pakistan (TDAP) should use AI and big data to
help exporters tap into online marketing platforms.
Similarly, huge developments in form of facilities, infrastructure investment have been started to grow in
Pakistan that promotes the industrial development producing goods for export and to organize the export
activities as the Export Processing Zones Authority is a Pakistan Government venture
conceived and designed to increase and improve the exports of the country and under this
organization risalpur, Karachi, Sialkot, Gujranwala epz’s are developed.
However, due to lack of standardization the export goods faces huge competition in
international market. Likewise, numerous trade barriers may also be imposed due to major
political, environmental issues faced in the country.
On the other side I do not agree with View B as Imports are essential for maintaining
economic stability and Many industries rely on imported raw materials, machinery, and technology to
produce goods locally. Restricting imports could disrupt these industries, leading to economic instability
as the iron and steel industry is a dynamic part of the economy of Pakistan, contributing to 80% of the
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total economy of the market and a combined revenue of PKR 150bln was generated by these
entities in FY 2020 (Steel Sector an Overview 2020, PACRA).
Likewise, it may greatly affect the trade international relations as Pakistan is a member of various
international trade agreements and organizations, such as the World Trade Organization (WTO).
Imposing import restrictions could violate these agreements and lead to trade disputes or sanctions
However, restricting luxury imports that can be easily manufactured in Pakistan may be beneficial to the
economy. Likewise restricting imports may contribute to the development rise of local industries.
In conclusion, increasing exports may contribute effectively to the development of economy as Pakistan
has more potential to increase its exports in various fields like IT
[6]
[Total:25]
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