PAKISTAN STUDIES, GEOGRAPHY FATIMA VAQAS IG2Es

RESEARCH WORK, TRADE

Key Ideas:

● The trade balance between import and export

● Remittances

● Economic stability

● Challenges faced by regional trade (unskilled labor, reliance on imported energy,

gender inequality, loss of young life)
● Impact of primary and tertiary sector on
1) Water pollution
2) Land pollution
3) Deforestation P
4) Waste management

Trade refers to the exchange of goods and services between countries. Imports are represented
by the flow of foreign exchange out of the country through the buying of goods or services.
Exports are represented by the flow of foreign exchange into the country through the selling of
good and services

THE TRADE BALANCE BETWEEN IMPORTS AND EXPORTS:

The balance of trade is the difference in the total value of exports and imports over a period of
time usually expressed in the unit of currency of a particular country. Pakistan’s BOT has always
been negative due to the Continuous devaluation of Pak Rupee and wild fluctuation in
exchange rate along with the fact that The economy of Pakistan is also import dependent
which increase the domestic consumption that increases the trade deficit in Pakistan. Thus this
means that annual import value of Pakistan over weigh and eradicates the positive impact of
export of Pakistan.

REMITTANCES:
Remittance is the transfer of money or goods by a person working in a foreign country to their
home country .
1. Economic Stability: Remittances are a cornerstone of Pakistan's economic stability,
consistently accounting for over 7% of the GDP. According to the State Bank of Pakistan (SBP),
remittances have remained one of the largest sources of foreign exchange for the country,
helping to offset balance of payment deficits and stabilize the Pakistani Rupee. For instance, in
the fiscal year 2020-21, remittances surged to a record high of over $29 billion, demonstrating
their crucial role in supporting the economy.

2. Poverty Alleviation and Household Income: Remittances directly impact poverty alleviation
and household incomes across Pakistan. They serve as a lifeline for millions of families, enabling
them to meet basic needs and improve their standard of living. According to the World Bank,
remittances contribute significantly to reducing poverty rates by enhancing household welfare.
In rural areas, where poverty rates are typically higher, remittance-receiving households have
been shown to have greater access to healthcare and education services, leading to improved
socio-economic outcomes.

3. Investment and Development: Remittances play a pivotal role in driving investment and
development initiatives in Pakistan. A substantial portion of remittances is channeled into
productive sectors such as real estate, small businesses, and agriculture, fueling economic
growth and job creation. In addition, remittances promote financial inclusion by encouraging
savings and investment behaviors among recipients. For instance, initiatives like the Pakistan
Remittance Initiative (PRI) aim to facilitate the flow of remittances and promote their
productive utilization in sectors critical for the country's development.

Overall, remittances serve as a vital source of income for millions of Pakistanis, contributing to
both individual well-being and national economic prosperity.

ECONOMIC STABILITY:
Economic stability means an economy that stays steady without big jumps in things like prices,
jobs, or currency value, helping businesses and people plan and grow smoothly.

UNSKILLED LABOR:
1. **Reduced Productivity and Growth:** Pakistan's heavy reliance on unskilled labor slows
down productivity and economic progress. The World Bank notes sluggish productivity growth
because of a large informal workforce, especially in manufacturing. This hampers
competitiveness, evident in below-potential industrial growth due to a shortage of skilled
workers.
2. **Income Inequality and Persistent Poverty:** Unskilled labor exacerbates income inequality
and poverty. According to the Pakistan Bureau of Statistics, many are stuck in low-paying
informal jobs, particularly in rural areas. This perpetuates poverty cycles, hindering social
advancement. For instance, stagnant agricultural productivity keeps rural communities
impoverished.

3. **Missed Opportunities for Innovation:** Pakistan's deficit of skilled labor hinders

innovation and economic diversification. The Global Innovation Index ranks Pakistan poorly due
to limited investments in research and development. Despite a sizable youth population, the
technology sector struggles due to a lack of skilled workers, hampering competitiveness in the
digital economy. Investing in education and vocational training is crucial for unleashing
Pakistan's innovative capacity and fostering sustainable economic growth.

LOSS OF YOUNG LIFE:

Many scientists, engineers, and teachers, trained in Pakistan, are working in other countries, for
example the United States and Canada. This loss of skilled workers is a considerable problem
for Pakistan. Pakistan is the third leading source of International Medical graduates (IMGs) to
more affluent countries. The bureau of emigration and overseas employment estimate that
thousands of doctors migrate from Pakistan each year. Although some of these trained doctors
return, Pakistan often losses both their skills and the cost of their training, which negatively
affects Pakistan’s economic development.
• Pakistan has 9.7 doctors for every 10,000 of Pakistan’s population. This figure is lower in rural
areas and the less developed provinces. Migration of skilled workers such as doctors means
that health care is very limited in many areas of Pakistan, affecting the population’s health and
their ability to work. This is an important factor, affecting regional development and the overall
economic development of Pakistan.
• However, the most significant economic development in Pakistan over the past ten years has
been the dramatic growth of remittances. Remittances from overseas Pakistanis amounted to
$2.768 billion in July 2020, the highest amount recorded and 36.5% increase from July 2019.
Remittances make up 7.9% of the Gross Domestic Product (GDP) and are therefore essential for
Pakistan’s economy.
• Migration of skilled workers is beneficial to Pakistan, which has a median population age of
22.8(2020). Consequently, Pakistan has a very large working-age population and migration to
other countries reduces Pakistan’s unemployment and therefore benefits Pakistan’s economic
development.
Diversification of Skills and Knowledge Transfer: Returning skilled workers bring new ideas,
techniques, and expertise, enhancing sectors like healthcare, engineering, and education. This
boosts domestic competitiveness. According to the International Organization for Migration,
skilled migrants play a crucial role in sharing knowledge and developing skills, elevating the
quality of services and products in Pakistan.
GENDER INEQUALITY:
Gender inequality is considered to be a major factor affecting economic development. Pakistan
is currently ranked as the second lowest country in the world for gender equality by Global
Gender Gap Index.
• There is lack of access to quality family planning services, especially in rural areas, therefore
woman have a high fertility rate, an average of 3.8 children per woman This means that
Pakistan’s population is rapidly increasing which is hindering economic development.
• The status of women is low, especially in rural areas. Women are not permitted to leave the
home to work, and this loss of labour adversely affects the economic development of Pakistan,
both regionally and nationally.
• The number of women in education is significantly lower than that of men. 33% percent of
primary school age girls do not attend school in Pakistan, compared to 21% of boys. Girls are
therefore not equipped to participate in the work place, reducing their contributions to the
over-all economic development of Pakistan.

RELIANCE ON IMPORTED ENERGY:

Pros of Reliance on Foreign Energy:

1. Access to Diverse Energy Sources: Relying on foreign energy provides access to

diverse energy sources, enhancing energy security. For example, Pakistan imports
about 35% of its total primary energy supply, including oil, gas, and renewable
energy.

2. Technology Transfer and Knowledge Exchange: Collaboration with foreign

energy suppliers facilitates technology transfer and knowledge exchange. This
fosters innovation and efficiency in the energy sector. For instance, partnerships
with countries like China have led to investments in renewable energy projects in
Pakistan.

3. Economic Opportunities: Importing energy creates economic opportunities

through trade and investment. Foreign energy partnerships stimulate economic
growth by fostering trade relations and attracting investment. Pakistan's energy
imports contribute significantly to its trade balance, with energy-related imports
accounting for a substantial portion of total imports.

Cons of Reliance on Foreign Energy:

1. Vulnerability to Price Volatility: Reliance on foreign energy exposes Pakistan to
price fluctuations in global markets. Sudden increases in energy prices strain the
economy. For example, fluctuations in oil prices can impact Pakistan's import bill
and inflation rate, affecting overall economic stability.

2. Geopolitical Risks and Dependency: Dependence on foreign energy sources

exposes Pakistan to geopolitical risks and supply disruptions. Political tensions in
energy-exporting regions can disrupt supplies, leading to shortages and economic
instability. For instance, conflicts in the Middle East have historically impacted
global energy markets, affecting Pakistan's energy imports.

3. Budgetary Constraints and Fiscal Pressures: Subsidizing foreign energy imports

strains Pakistan's fiscal budget. Energy subsidies contribute to budget deficits and
increase government debt levels. Redirecting resources to cover energy subsidies
limits investments in critical infrastructure and social programs, hindering long-
term economic development.

IMPACT OF PRIMARY AND TERTIARY SECTOR ON ENVIRONMENT;

Impact of the primary and secondary sectors on the physical environment

Deforestation and Erosion - In the primary sector, land is destroyed due to overgrazing, mining
for obtaining coal etc and trees are cut for obtaining wood which is then used for furniture,
paper, and other purposes. This then leads to a lot of other environmental problems such as
soil erosion as tree roots bind it, this can cause flooding or even landsliding which gives onto
economical degradation because agriculture land is destroyed ( export items) along with human
losses, financial losses and infrastructure losses

Water pollution- In the secondary sector, Water is polluted through many industries that dump
their waste which includes toxic waste as well into the water sources such as rivers for easy
riddance but this is not at all acceptable and proves to be a menace. The water has to be used
for irrigation purposes and ends up damaging crops. Some people even depend on such water
sources for their routine use which is made impracticable due to this.

Waste management - Industries in the secondary sector do not manage their waste properly
and instead dump it into rivers and other water sources, spill it onto land and burn it which in-
turn pollutes the air and contributes to greenhouse effect. This ends up contaminating water
bodies such as groundwater, lakes, streams or even coastal waters. The waste is often toxic and
causes the land not to be used for purposes such as agriculture or settlement which causes a
waste of land resource