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The state of Pakistan's foreign trade 1990-91.

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. In the Trade Policy the ratio was anticipated to improve to 74 per cent. Actual improvement was at about 81 per cent. Similarly, there has been significant improvement in the ratio of trade deficit to gross domestic product. It was reduced from 5 per cent in 1989-90 to 3 per cent in 1990-91. In 1977-78 it was 8 per cent.

There has been a significant improvement in composition of exports. While the share of primary commodities is on the decline, the shares of semi-manufactures and manufactures are on the increase. In 1990-91, the share of primary commodities, at 18.7 per cent, was the lowest since 1977-78, while that of semi-manufactures, at 24.4 per cent and of manufactures, at 56.9 per cent, were the highest. Following table shows the economic classification of exports in 1977-78, 1989-90 and 1990-91.

In a way, exports of Pakistan have a very dangerous long-term trend as a single commodity group the Cotton Group is increasing its share very fast and the shares of all other commodity groups are on the decline. In fact, the economic development in the country and as a result, foreign trade are moving against diversification which is very important for long-term socio-economic growth. The following table will show the shares of various commodity groups in exports in 1977-78, 1989-90 and 1990-91.

Much dependence on cotton textiles and clothing is dangerous from another angle. This commodity group is highly sensitive for the Western developed countries and there are quota and non-quota restrictions on import of textiles and clothing in several developed countries from the developing countries like Pakistan. Efforts should be made to promote the exports of other commodity groups, particularly of non-traditional items.

In imports, consumer goods and raw materials for the manufacture of consumer goods are more important than capital goods and raw materials for capital goods. Now, consumer goods and raw materials for consumer goods account for about 60 per cent of all imports. Imports of capital goods and raw materials for capital goods are about 40 per cent of the total. The following table shows the economic classification of imports in 1977-78, 1989-90 and 1990-91.

Imports of commodities and goods are well diversified and there is a wide scope to replace a large number of these by increasing domestic production. However, at present major imports are machinery, petroleum and petroleum products, chemicals, edible oils, automotive vehicles, paper and paper board, rubber crude and sugar. Petroleum and petroleum products was the biggest item of import in 1990-91 with share of 22.2 per cent followed by machinery (non electric with share of 17.6 per cent and chemicals (excluding pharmaceuticals and fertilizers) 10.2 per cent and transport equipment 6.7 per cent.

In direction of trade, Japan and the United States of America are the biggest trade partners of Pakistan. In 1990-91, exports to the USA with percentage share of 10.8 per cent were the highest, followed by Germany (8.9 per cent), Japan (8.3 per cent), UK (7.3 per cent), France and Italy (3.8 per cent each) and Saudi Arabia (3.6 per cent). Other important customers were Netherlands (2 per cent) and China 1 per cent.

In imports Japan was the biggest supplier with share of 13 per cent in 1990-91, followed by the USA, (11.8 per cent) Germany (7.3 per cent), Saudi Arabia (6.2 per cent) UK (4.9 per cent), Italy (3.5 per cent), China (5.1 per cent), Malaysia (4 per cent), France (2.9 per cent), and South Korea 2.8 per cent.

This publication has a comprehensive statistical section on balance of trade, various aspects of exports and imports and direction of trade by countries and regions. Special mention may be made of the four matrixs - two on exports and two on imports. In one matrix on exports, value by major countries is given for the year 1990-91. In the second matrix, country-wise share in Pakistan's exports is given. In a matrix on imports, the value is given by major countries and in another matrix, the share of each major country in Pakistan's imports is given. Information on foreign trade of Pakistan in the shape for matrix is not given in any other publication.

This is very useful publication on foreign trade of Pakistan for students of economics and commerce, research workers and people connected with foreign trade of Pakistan.

Pakistan - Economic Classification of Exports 1977-78, 1989-90 and 1990-91
 (Value in $ million)
 Primary Commodities Semi-Manufactures Manufactures
 % % %
Years Value Share Value Share Value Share Value
1977-78 468.1 35.7 193.1 14.7 650.0 49.6 1311.2
1989-90 1007.0 20.3 1171.1 23.7 2776.2 56.0 4954.2
1990-91 1147.5 18.7 1498.4 24.4 8487.2 65.9 6133.1


Pakistan-Shares of Major Commodity Groups in Exports in 1977-78, 1989-90 and 1990-91
 (% Shares)
Commodity Groups 1977-78 1989-90 1990-91
Rice Group 18.6 4.8 5.6
Cotton Group 38.7 60.1 61.0
Leather Group 5.9 9.8 9.1
Wool and Carpet Group 9.7 5.0 3.8
Fish & Preparations 2.9 1.9 1.9
Others 24.2 18.4 18.6


[Tabular Data Omitted]
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Author:Khan, Abdul Majid
Publication:Economic Review
Date:Nov 1, 1991
Words:1494
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