CHAPTER TRADE

 Trade is the process of exchanging goods, services, or resources between people,

businesses, or countries.
 It involves buying, selling, or bartering items to satisfy needs or make a profit.
 Trade can happen within a country, known as domestic trade, or between different
countries, called international trade.
 Trade is very important for economic development because it gives people access to
a wider variety of products and services.

How Do We Benefit from Trade?

 Trade allows countries to use their domestic resources efficiently to produce goods
for export.
 It stimulates economic activity, creating employment opportunities for people.
 Trade facilitates the transfer of information technology, helping to speed up
economic development.
 It encourages the production of value-added goods (like ready-made garments),
which can lead to higher profits.
 By earning foreign exchange, countries can import essential capital goods needed for
growth.
 Large-scale production from trade helps businesses achieve economies of scale,
reducing costs and improving efficiency.
 This can lead to an increase in a country’s Gross National Product (GNP) and support
industrialization.
 Trade promotes specialization in production, allowing countries to focus on goods
they produce best.
 For example, Japan specializes in electronics, Pakistan in cotton, Sri Lanka in tea, and
Bangladesh in jute.
EXPORTS AND IMPORTS

Exports:

 Selling goods and services to other countries is called exporting.

 Exports bring foreign money into the country.
Imports:

 Buying goods and services from other countries is called importing.

 Imports cause money to flow out of Pakistan.
 Without imports and exports, consumers would have fewer choices for goods and
services.
 Many workers would lose their jobs without trade.
 Many businesses would lose customers and opportunities without importing and
exporting.
Classification of Exports:

 Primary commodities include raw materials like cotton, fruits, vegetables, leather,
and fish.
 Processed goods refer to items such as cotton yarn, which have undergone some
level of processing.
 Manufactured goods consist of products like ready-made garments, carpets and rugs,
sports goods, surgical instruments, leather items, and bedding.
Dependence on few export items:

 The country has a narrow export base, relying heavily on a few key items.
 Cotton, leather, and rice make up 61% of the total exports.
 Cottage industry products have lower value compared to high-tech items like
electronics and machinery.
 A poor cotton harvest can significantly impact overall export performance.
Direction of Exports:

 Pakistan engages in trade with 108 countries globally.

 However, the majority of its exports are concentrated in a few countries.
 About 27% of Pakistan’s exports are directed to just five countries: the USA,
Germany, the UK, Hong Kong, and the UAE.
Imports of Pakistan:

 Food items such as wheat, edible oil, sugar, and pulses are commonly imported.
 Machinery imports include equipment for textiles, electrical appliances, and
construction.
 Petroleum and petroleum products are significant imports, including synthetic fibers
for the textile industry.
 Fertilizers and other chemicals are also major import categories.
 Metals like iron and steel are regularly imported to meet industrial needs.
Types of Imported Goods:

 Capital goods, such as machinery and equipment used in production, are frequently
imported (e.g., textile machinery, construction equipment).
 Raw materials are imported for further processing (e.g., crude oil, iron ore).
 Raw materials for capital goods include components used in the production of
machinery and tools (e.g., steel for manufacturing machines).
 Raw materials for consumer goods are imported to create products for the domestic
market (e.g., synthetic fibers for clothing).
 Consumer goods, such as finished products for direct consumption, are also imported
(e.g., electronics, edible oil).

Effects of Negative Balance of Trade:

 The country may need to take loans from the IMF, World Bank, and other countries to
cover deficits.
 Development projects often have to be reduced or delayed due to lack of funds.
 There is an increased reliance on foreign assistance to support the economy.
 Trade embargos could be imposed, restricting access to international markets.
 National assets may need to be sold to foreign companies to generate revenue.
 Higher taxes can be imposed, limiting the purchasing power of consumers.
 Business and commercial activity tends to slow down during economic strain.
 Structural changes become necessary in the types and values of imports and exports
to stabilize the economy.

GDP (Gross Domestic Product) and GNP (Gross National Product):

 GDP is the total monetary value of all goods and services produced within a country
over a specific time period.
 GNP refers to the total monetary value of all goods and services produced using
resources owned by the citizens of the country, regardless of where the production
takes place.
 This means that GNP includes income earned by residents from investments abroad
but excludes income earned by foreign residents from domestic investments.
 Both GDP and GNP serve as major economic indicators that reflect the level of
business activity, the employment situation, and the overall economic growth of a
country.

Trade Routes:
 One important trade route is the route with India, through Lahore and Sindh both in
the form of road and railway. Trade doesn’t exist because of the political relations of
both countries.
 Historical passes have served as key pathways for trade, allowing for the movement
of products to Afghanistan and China.
 The Silk Route and the Karakoram Highway connects Pakistan with China.
 The RCD Highway, which connects Pakistan, Iran, and Turkey, plays a crucial role in
regional trade and commerce.
 The Arabian Sea serves as a vital maritime route for international trade, connecting
Pakistan to global markets.
Why Trade by Sea Route is Preferred:

 The land route to Europe is long, costly, and subject to heavy taxes, making it less
appealing for trade.
 The sea route is shorter to the Arabian Peninsula and connects to Europe through the
Suez Canal, allowing for quicker deliveries.
 Transportation costs are generally lower when using sea routes compared to land
routes.
 This same sea route also links to the USA and Canada, expanding trade opportunities.
 Karachi and Port Qasim have modern facilities that efficiently handle container ships
and bulk cargo.
 Both Karachi and Gwadar seaports are located in warm waters and remain open for
trade throughout the year.
Strategic Geographical Situation of Gwadar

 Gwadar attracts foreign investment due to its ideal location for global trade.
 It serves as a regional trade hub, connecting Pakistan to international markets.
 The port’s deep water allows large cargo ships to dock, making it suitable for heavy
and large-scale shipping.
 To support trade, Gwadar requires strong infrastructure like efficient transport links,
access to clean water, desalination plants, and power generation facilities. These are
essential for smooth port operations and the region's development.

The Balance of Payments Position:

 The balance of payments is calculated by subtracting the total value of imports (goods
and services) from the total value of exports.
How Pakistan Covers Its Negative Balance of Payments:

 One way Pakistan covers its negative balance of payments is through remittances
sent by Pakistanis living abroad.
 Another source is foreign aid received from other countries and international
organizations to support economic stability.
 Pakistan relies on loans from various institutions to help balance its payments.
Why There is a Negative Balance of Payments:
Exports:

 Pakistan faces a negative balance of payments due to a lack of quality control in its
exported products.
 The rise in oil prices increases production costs, affecting export competitiveness.
 There are international restrictions that can limit Pakistan’s access to certain markets.
 Pakistani exports face tough competition in the global market, making it hard to sell
products.
 The country exports a limited variety of items, which restricts its earning potential.
 Non-cotton products often encounter trade barriers in other countries, making it
difficult to export them.
 Additionally, Pakistan is not a member of a major regional organization, which limits
its trade opportunities.
Imports:

 Pakistan's negative balance is also influenced by the import of capital goods, which
are necessary for development.
 The country exports a small variety of products compared to what it imports.
 Bad weather and reduced plantation lead to an import of food items, which accounts
for 14% of its imports.
 There is also a significant import of luxury items, adding to the overall trade deficit.
 A large portion, about 63% of imports, consists of raw materials needed for various
industries.

HOW TO CORRECT NEGATIVE BALANCE OF PAYMENTS

 By increasing exports
 By restricting imports
 Curtailing imports related to tertiary sector
By Increasing Exports:

 Focus on exporting value-added goods to increase profitability.

 Encourage the growth of cottage industries and small-scale businesses to boost
exports.
 Expand the variety of items available for export.
 Offer tax reductions to provide incentives for exporters.
 Strengthen the role of agencies like the Export Promotion Bureau to support
exporters.
 Implement strict quality control measures to ensure export goods meet international
standards.
 Develop export processing zones to make exporting easier and more efficient.
By Decreasing Imports:

 Reducing imports can help correct the balance of payments.

 Around 14% of Pakistan's imports are consumer goods.
 Some of these consumer goods can be produced locally.
 A large portion of imported consumer goods are luxury items.
 Pakistan hires skilled workers from other countries at high salaries.
 The solution is to train local people to meet the standards required by companies and
institutions.

EXPORT PROCESSING ZONES:

Objectives of Export Processing Zones (EPZs):

 Promote industrial growth.

 Increase exports by offering facilities to both local and foreign investors.
 Create job opportunities for people.
 Enable the transfer of advanced technology from developed countries to developing
ones.
Incentives for Investors in EPZs:

 100% ownership rights.

 No minimum or maximum limit on investment.
 Duty-free import of machinery, equipment, and materials.
 No sales tax on the import of goods and services, including electricity and gas bills.
 Exemption from import duties and national import restrictions.
 Access to the domestic market under the same conditions.
Economic Revival of Pakistan through EPZs:

 EPZs attract foreign exchange and investments, which are essential for a country
with:
 Low per capita income.
 A high population growth rate.
 Limited resources.
 Pakistan established EPZs after 1998 in cities like Sialkot, Risalpur, Lahore, Faisalabad,
and Gwadar to boost foreign exchange earnings and attract investments.
Infrastructure Needed for Successful EPZs:

 EPZs should be near seaports, such as Karachi and Gwadar.

 Consistent government policies are required.
 Adequate air travel and transport facilities are necessary for marketing finished
goods.
 Efficient transport links to sources of raw materials are essential.
 Sialkot and Risalpur industrial zones failed because these facilities were not
adequately provided, showing the importance of proper planning.
Potential of EPZs on the Makran Coast:

 Producers and manufacturers are conscious of costs, so this location could appeal to
foreign investors.
 The Makran coast offers better organization for shipping goods between countries as
it is a port city, making trade more efficient.

Trade barriers:
Trade barriers include measures like tariffs, embargoes, and quotas that restrict or
control the flow of imports and exports.

Advantages of trade barriers:

 They help a country become more self-sufficient, reducing its dependence on foreign
goods.
 Trade barriers protect local industries and help create more job opportunities.
 They can improve a country's balance of payments by reducing imports and boosting
local production.
 Barriers create domestic demand, encouraging the use of local resources.
Disadvantages of trade barriers:

 Consumers have fewer choices; as fewer foreign goods are available.

 Local industries may become complacent, lacking the pressure to improve.
 The country may have to produce goods inefficiently and at higher costs, even if it’s
not competitive in certain industries.

The Exchange Rate:

The exchange rate is the value of country's currency compared to another country's
currency. For example, if the exchange rate is 1 USD = 150 PKR, it means that one US
dollar can be exchanged for 150 Pakistani rupees. It determines how much of one
currency you can get in exchange for another.

Depreciation of Currency:

Depreciation happens when the value of a currency decreases compared to another

currency. This means that you get less of another currency for the same amount of your
own currency. For example, if the exchange rate changes from 1 USD = 150 PKR to 1 USD
= 180 PKR, the Pakistani rupee has depreciated against the US dollar.

Appreciation of Currency:

Appreciation, on the other hand, occurs when the value of a currency increases
compared to another currency. This means you can get more of another currency for the
same amount of your own currency. For example, if the exchange rate improves from 1
USD = 180 PKR to 1 USD = 150 PKR, the Pakistani rupee has appreciated against the US
dollar.

Reasons for Depreciation of Currency in Pakistan:

High Inflation: When prices rise quickly in Pakistan, the value of the currency goes down.
People can buy less with the same amount of money, making the currency weaker.

Trade Deficit: If Pakistan imports more goods than it exports, there is a higher demand
for foreign currencies to pay for those imports. This can lead to a decrease in the value of
the Pakistani rupee.

Political Instability: Uncertainty in the government or political problems can make

investors worried. When they pull their money out of Pakistan, it can lead to a fall in the
currency's value.

Low Foreign Investment: If foreign investors do not want to invest in Pakistan, it reduces
demand for the rupee. Less demand means the currency's value decreases.

Debt Levels: If Pakistan has a lot of debt and is unable to pay it back, it can make
investors nervous. This can lead to a decrease in the currency's value.

Global Economic Factors: Changes in the global economy, like fluctuations in oil prices,
can also affect the value of the rupee.

Lack of Reserves: If the State Bank of Pakistan does not have enough foreign currency
reserves, it can struggle to support the rupee, leading to depreciation.

Trading Blocks:
Trading blocks are groups of countries that come together to promote trade and
economic cooperation:

SAARC: (South Asian Association for Regional Cooperation) focuses on enhancing

economic and regional integration among South Asian countries.
ECO: (Economic Cooperation Organization) aims to promote economic cooperation and
development among countries in the region, including Central Asia and the Middle East.

ASEAN: (Association of Southeast Asian Nations) works to increase trade and political
stability among Southeast Asian nations.

EU: (European Union) is a political and economic union of European countries that
promotes free trade and cooperation among its member states.

EUROPEAN UNION (EU):

The European Union (EU) is an economic and political group made up of 27 European
countries. It was established in 1993 to promote political, economic, and social
cooperation among its members.

How the EU works:

 It allows the free movement of people, goods, capital, and services between member
countries.
 There are no trade barriers between EU countries, making trade easy within the
group.
 However, trade barriers apply to countries outside the EU.
Pakistan's trade with the European Union (EU):

 Pakistan exports products like textiles, medical equipment, and leather goods to the
EU.
 Pakistan imports items such as mechanical, electrical equipment, chemicals, and
pharmaceutical products from the EU.
Advantages of trading with the EU:

 Expanding the export market brings in more foreign exchange, improving Pakistan’s
balance of trade.
 Encourages the growth of export-oriented industries in Pakistan.
 Attracts local and foreign investment in industries.
 Creates employment opportunities in trade-related fields.
 The EU has fewer trade barriers, making it easier to access their market.
 The EU is socially and economically stable, so market trends are more predictable.
Disadvantages of trading with the EU:

 Pakistan could face sanctions due to issues like terrorism or poor law and order.
 Pakistan's exports face restrictions over concerns about child labor and
environmental issues.
 Products from cottage industries may not meet the quality standards required by the
EU.
 Pakistan's exports may struggle to compete with cheaper goods from China.
 Many of Pakistan's exports are agricultural-based, which can be unreliable and affect
trade.
 Frequent changes in government policies and political instability can disrupt trade
agreements.

The World Trade Organization (WTO):

The World Trade Organization (WTO) presents both opportunities and challenges for
Pakistan's trade in various sectors like textiles, agriculture, services, public
administration, and small and medium industries.

Opportunities for Pakistan under WTO:

 The textile industry, agriculture, and the services sector can expand in global markets.
 Public administration reforms and changes in import duties can make trade
smoother.
 Small and medium industries can benefit from global exposure and growth
opportunities.
Challenges Pakistan faces under WTO:

 The textile industry and agriculture need to become more competitive globally.
 The services sector and public administration must meet international standards.
 Adjusting import duties and modernizing small and medium industries to keep up
with global demands is necessary.
Measures to address these challenges:

 Modernizing production processes through better training and education.

 Building strong infrastructure, improving human resources, investing in agricultural
research, and creating a transparent and cost-efficient business environment.
 Adopting international quality standards by ensuring efficient processes, modern
production methods, and quickly responding to global trends.
 Ensuring a smooth flow of information between the government and exporters to
make Pakistan’s exports more competitive in the global market.

The Export Promotion Bureau:

 Creating awareness among manufacturers about export opportunities.
 Exploring and identifying new markets abroad for Pakistani products.
 Helping entrepreneurs in Pakistan enter and succeed in the international market.
 These efforts aim to boost Pakistan's trade and export potential.

Trade Development Authority of Pakistan (TDAP):

 The Trade Development Authority of Pakistan (TDAP) has replaced the Export
Promotion Bureau after 43 years to better manage and promote exports.
Responsibilities:

 TDAP is focused on creating an effective export marketing strategy by ensuring that

local industries follow international trade laws.
 It is expected to bring significant changes in how Pakistan develops its trade.
 TDAP is responsible for planning and developing key sectors like manufacturing,
agriculture, and services, connecting them to global trade requirements.
 The authority operates under the Ministry of Commerce to ensure smooth and
effective trade policies for the country.

PAST PAPERS QUESTIONS

W/21/Q4
W/18
S/17
W/16
S/16
W/15
S/15
S/14
W/10
S/10
MARK SCHEMES FOR PAST PAPERS

4b(i) Define ‘balance of trade’. (1)

The difference between the value of a country’s exports and the value of itsimports.

value of exports – value of imports

1 @ 1 mark
Question Answer Marks

4(b)(ii) Name one of Pakistan’s main trading partners and give one example of 3
goods imported from it and one example of goods exported to it.

main trading goods imported from goods exported to

partner
UK iron and steel clothing/textiles
machinery cereals/fruits/nuts
electrical appliances cotton
vehicles surgical goods
Germany/ machinery clothing/textiles
named EU pharmaceuticals cotton
countries electrical appliances leather articles
chemicals surgical goods
USA cotton clothing/textiles
iron and steel cotton
machinery leather articles
pharmaceuticals carpets/rugs
mineral oil/fuel surgical goods
vegetable oil sports goods
wheat
named Middle mineral oil/fuel meat
Eastern countries electrical equipment cereals
plastics clothing/textiles
machinery spices/rice
China electrical equipment cotton
machinery copper
pharmaceuticals cereals
mineral oil/fuel fish
stationary cotton yarn
Afghanistan cotton cereals/sugar/flour/rice/
fruits/nuts/vegetable vegetables
mineral oils/fuel edible oil
salt salt
iron and steel pharmaceuticals
plastics
Japan electrical appliances cotton
vehicles clothing/textiles
machinery fish and fish products
Bangladesh tea cement
cotton/jute textiles
Indonesia/ tea textiles
Malaysia/Sri edible oil clothing
Lanka

3 @ 1 mark
4(b)(iii) Study Fig. 4.2, a bar graph showing the value of Pakistan’s imports from 2015
to 2020. 2)

Using Fig. 4.2 only:

 What was the value of Pakistan’s imports in 2016?
 How has the value of Pakistan’s imports changed since 2018?

 46 billion dollars
 decreased/gone down/falling/reduced
2 @ 1 mark

4(b)(iv) Describe the changes in the types and amounts of goods imported by
Pakistan in recent years. 4)

 imports of primary goods/raw materials have decreased

 imports of food/food products have decreased
 imports of consumer/value added goods have decreased
 imports of raw materials for consumer/value added goods/for
manufacturing have increased
 imports of industrial machinery/equipment/high value goods/capital goods
have increased
 imports of fuel oils/energy have fluctuated/increased
 imports of raw materials/luxury items/intermediate goods have
(recently/2022) been paused/restricted
 imports overall were paused/decreased during COVID-19
4 @ 1 mark

4(c) Explain two factors which may promote trade with other countries. You
should develop your answer. 4)

 membership of World Trade Organisation (WTO); places Pakistan onworld

stage/competes with other countries
 establishing/extending trade agreements with trading blocs/
SAARC/EU/CPEC/ECO/ASEAN; allows expansion of markets for
exports/imports/allows more foreign exchange
 removing trade barriers; international competition for local industries leads to
improved quality goods/efficiency
 competitive exchange rates; determines the cost of imports and
exports/impacts on the balance of payments
 developing export processing zones (EPZ); attracts foreign investment/boosts
industrialisation/offers incentives, e.g. tax breaks for import
 establishment of the Export Promotion Bureau (replaced by)/Trade
Development Authority of Pakistan (TDAP); has an overview of the planning and
 development of different sectors/marketing of Pakistan through conferences,
etc.
 increased mechanisation; faster production times/can sell goods atlower
prices
 manufacturing standardised products; meets international qualitystandards
 developing ports/airports/highways/transport infrastructure; can make more
efficient/faster trading routes to other countries/can agree deals toallow
(landlocked) countries to trade via Pakistan
 training programmes/educated/skilled workforce; make higher qualityproducts
 constant power supply to industry/no load shedding; products can be made
efficiently/to meet deadlines/more reliable production

Note: 1 mark for simple point and a further mark for the development of the point. 1
mark for second simple point and a further mark for development of the second point.
Note: Max. 2 marks if no development.
2 @ 2 marks

4d Evaluate the extent to which Pakistan can increase its trade with other countries.

Give reasons to support your judgement and refer to examples you have studied.
You should consider different points of view in your answer. (6)
Content guide

Pakistan can increase its trade with other countries because:

 Pakistan is already a member of some major trade blocs/namedexamples
 member of WTO/this aids trade
 already large investments from other countries such as China and UK/other
named example countries/projects
 by investing in/training/upskilling workers so quality of products meets
international standards
 Pakistan could offer further concessions/incentives to attract investors who
manufacture goods for export

It would be difficult to increase trade with other countries because:

 varying investment in different sectors/regions
 trained/skilled workers required
 trade barriers/import/export tariffs
 connectivity through transport networks requires further improvement,
e.g. rail/road/air/ports
power supply reliability/load shedding restricts production
W/21/Q4

4(a)(i) Study Fig. 4.1 (Insert), a map showing the top five 3
destinations of goods exported and origins of goods
imported by Pakistan in 2017. Using Fig 4.1 only, identify the
country:
 to which Pakistan exports the highest value of goods
 from which Pakistan imports the highest value of goods
 which Pakistan both exports goods to and imports goods from

Exports to =
USA Imports
from = China
Exports to and imports from = China
3@1
mark
4(a)(ii) In 2017 Pakistan’s total exports were valued at US $24.8 billion 2
and itsimports at US $55.6 billion.

Calculate Pakistan’s trade balance in 2017. Show your working

in the box below.

24.8 – 55.6 = –30.8(billion US $)

Note: reserve one mark for working out. If correct answer but no
working or incorrect working = max 1 mark
2@1
mark
Questio Answe Marks
n r
4(b)(i) What is the difference between GNP and GDP? 2

 GNP is the production by nationals both within and outside

Pakistan/ measures the output by Pakistan
nationals/companies wherever they are in the world.
 GDP is domestic production from within a country
regardless of who produced it/from nationals or foreign
companies/the value of everything that people in a country
produce.
2@1
mark
4(b)(ii) State two of Pakistan’s main exports and two of its main 4
imports.

exports:
 miscellaneous textiles/worn clothing;
 cotton (yarn) (medium staple);
 knit or crochet clothing/accessories;
 clothing/accessories (not knit or crochet);
 cereals/rice;
 leather/animal gut articles;
 copper;
 sugar/sugar confectionery;
 mineral fuels including oil;
 beverages/spirits/vinegar;
 salt/sulphur/stone/cement;
 fruit, nuts;
 medical/surgical/optical/technical apparatus;
 sports goods;
 carpets and rugs;

imports:
 mineral fuels including coal/oil/petroleum/oil products;
 machinery/electronics/electrical equipment;
 iron/steel;
 chemicals/chemical products;
 vehicles/cars;
 plastics/plastic articles;
 animal/vegetable fats/oils/waxes;
 oil seeds;
 cotton;
 wheat:
2@1
mark
Question Answer Marks

4(b)(iii) Describe the changes in the types and value of goods imported 4
andexported by Pakistan in recent years.

 fewer food products are imported;

 imports of fuel energy are decreasing;
 imports of high value/capital goods has increased (e.g. machinery to
manufacture its products);
 imports of consumer goods have decreased (e.g.
computers,appliances, clothes);
 exports of low value/primary /agricultural products have decreased;
 exports of high value/manufactured/processed/industrial products have
increased;
 exports of value added goods have increased;

Note: reserve 1 mark for exports and 1 mark for imports.

4 @ 1 mark

4(c) Explain how trading blocs and currency exchange rates 4

affectPakistan’s trade. You should develop your answer.

trading blocs:
 members have a free trade agreement/there are low or zero trade
restrictions; which encourages trade between member states e.g.
Pakistan is a member of SAARC/so more goods can be exported
to member countries by Pakistan;
 since 2014 Pakistan has had preferential access for its exports to
EUmarkets; with low or zero tariffs on most goods increasing trade;
 Pakistan is a member of ECO/ASEAN; but some trade barriers remain;
 have trade barriers; which hinders trade between non-member states
which affects Pakistan if it does not belong to a particular trading
bloc;
Etc.

exchange rates:
 determine the cost of imports and the value of exports; therefore
the increase or decrease of the PK Rupee is significant to trade;
 determine the amount of overseas investment; companies/government/
people more likely to invest in Pakistan if the exchange rate is favourable;
 currency depreciation means that imports are more expensive/exports
have lower value; this can reduce trade as Pakistan may not be able
to afford to import as many goods/will earn less from exports;
 currency appreciation means that imports are cheaper/exports have
higher value; this can increase trade as Pakistan can afford to import
more goods/will earn more from exports//however Pakistan’s exports may
decrease as countries may shop around for cheaper goods elsewhere.
Etc.

Note: One mark for identification of appropriate idea and a further

mark fordevelopment.
Note: Max. 2 marks if no development.
2 @ 2 marks
Question Answer Marks

4(d) In 2017 Pakistan’s balance of trade was affected by a 0.2 per cent 6
decrease in the value of its exported goods and a 5.1 per cent
increasein the value of imported goods. Read the following two
views:

View A
Pakistan could decrease the amount of cheap goods
imported toimprove the balance of trade.

View B

Pakistan could export goods to a wider number of countries to

improve the balance of trade.

Which view do you agree with more? Give reasons to support

your answer and refer to examples you have studied. You should
considerView A and View B in your answer.

Content Guide

Answers are likely to refer to:

agree with View A:

 Pakistan could manufacture many of the products that it imports
creating jobs;
 many of the goods imported are not needed but are imported due to
an increase in consumerism;
 Pakistan can educate people on the impact of consumerism on
theenvironment;
 by focussing on local industry e can improve standards of goods can
be improved e.g. by working with PTEC (Pakistan Technical and
Educational Council) for training.
Etc.
 Question Answer Marks

4(d) disagree with View A:

 Pakistan does not have resources to manufacture goods that it imports;
 it would cost too much to make the products/cheaper to import them; it
is costly to develop infrastructure and to train and educate people;
 it may be difficult to support the domestic demand for products that
are no longer imported.
 importing cheap goods does not affect the balance of trade
significantly;Etc.

agree with View B:

 Pakistan currently only exports to five main countries;
 increasing the number of countries that Pakistan can export to will
mean that Pakistan will increase manufacturing /employment and earn
more income;
 Pakistan will be less reliant on a few countries for trade;
Etc.

disagree with View B:

 it may not be possible to make trade agreements with more countries;
 there is a lot of competition for trade;
 trade blocs e.g. EU or individual countries may place tariffs on imports
reducing the impact on the balance of trade;
 increasing exports is not the only/best way to improve the balance
of trade;
Etc.

Evaluation may argue:

that both ideas are necessary for improving Pakistan’s balance of trade.

4b(i)

Define ‘balance of trade’. 1)

The difference between the value of a country’s exports and the value of its imports.

value of exports – value of imports

1 @ 1 mark

4(b)(iii) Study Fig. 4.2, a bar graph showing the value of Pakistan’s importsfrom 2015 to 2020.

Using Fig. 4.2 only:

 What was the value of Pakistan’s imports in 2016?
 How has the value of Pakistan’s imports changed since 2018? 2)

 46 billion dollars
 decreased/gone down/falling/reduced
2 @ 1 mark
 4(b)(iv) Describe the changes in the types and amounts of goods imported byPakistan in
recent years. 4)

 imports of primary goods/raw materials have decreased

 imports of food/food products have decreased
 imports of consumer/value added goods have decreased
 imports of raw materials for consumer/value added goods/for manufacturing have
increased
 imports of industrial machinery/equipment/high value goods/capitalgoods have increased
 imports of fuel oils/energy have fluctuated/increased
 imports of raw materials/luxury items/intermediate goods have(recently/2022) been
paused/restricted
 imports overall were paused/decreased during COVID-19
4 @ 1 mark

4(c) Explain two factors which may promote trade with other countries. You should develop
your answer. 4)

 membership of World Trade Organisation (WTO); places Pakistan on world stage/competes with
other countries
 establishing/extending trade agreements with trading blocs/
SAARC/EU/CPEC/ECO/ASEAN; allows expansion of markets for exports/imports/allows
more foreign exchange
 removing trade barriers; international competition for local industriesleads to improved quality
goods/efficiency
 competitive exchange rates; determines the cost of imports and exports/impacts on the
balance of payments
 developing export processing zones (EPZ); attracts foreign investment/boosts
industrialisation/offers incentives, e.g. tax breaks for import
 establishment of the Export Promotion Bureau (replaced by)/Trade Development Authority of
Pakistan (TDAP); has an overview of the planning and development of different
sectors/marketing of Pakistanthrough conferences, etc.
 increased mechanisation; faster production times/can sell goods atlower prices
 manufacturing standardised products; meets international quality standards
 developing ports/airports/highways/transport infrastructure; can make more efficient/faster trading
routes to other countries/can agree deals toallow (landlocked) countries to trade via Pakistan
 training programmes/educated/skilled workforce; make higher qualityproducts
 constant power supply to industry/no load shedding; products can bemade efficiently/to meet
deadlines/more reliable production

Note: 1 mark for simple point and a further mark for the development of the point. 1 mark for second
simple point and a further mark for development of the second point.
Note: Max. 2 marks if no development.
2 @ 2 marks

4(d) Evaluate the extent to which Pakistan can increase its trade with other countries.

Give reasons to support your judgement and refer to examples youhave studied. You
should consider different points of view in your answer. 6)
Content guide

Pakistan can increase its trade with other countries because:

 Pakistan is already a member of some major trade blocs/namedexamples
 member of WTO/this aids trade
  already large investments from other countries such as China and UK/other named example
countries/projects
 by investing in/training/upskilling workers so quality of products meetsinternational standards
 Pakistan could offer further concessions/incentives to attract investorswho manufacture goods
for export

It would be difficult to increase trade with other countries because:

 varying investment in different sectors/regions
 trained/skilled workers required
 trade barriers/import/export tariffs
 connectivity through transport networks requires further improvement,
e.g. rail/road/air/ports
power supply reliability/load shedding restricts production

4(a)(i) Study Fig. 4.1 (Insert), a map showing the top five destinations of goods exported and
origins of goods imported by Pakistan in 2017.Using Fig 4.1 only, identify the country:
 to which Pakistan exports the highest value of goods
 from which Pakistan imports the highest value of goods
 which Pakistan both exports goods to and imports goods from 3)

Exports to = USA Imports from = China

Exports to and imports from = China
3 @ 1 mark

4(a)(ii) In 2017 Pakistan’s total exports were valued at US $24.8 billion and itsimports at US
$55.6 billion.

Calculate Pakistan’s trade balance in 2017. Show your working in the box below. 2)

24.8 – 55.6 = –30.8(billion US $)

Note: reserve one mark for working out. If correct answer but no working or incorrect working = max 1
mark
2 @ 1 mark

4(b)(i) What is the difference between GNP and GDP? 2)

 GNP is the production by nationals both within and outside Pakistan/ measures the output by
Pakistan nationals/companies wherever they are in the world.
 GDP is domestic production from within a country regardless of who produced it/from nationals
or foreign companies/the value of everything that people in a country produce.
2 @ 1 mark

4(b)(ii) State two of Pakistan’s main exports and two of its main imports. 4)

exports:
 miscellaneous textiles/worn clothing;
 cotton (yarn) (medium staple);
 knit or crochet clothing/accessories;
 clothing/accessories (not knit or crochet);
 cereals/rice;
 leather/animal gut articles;
 copper;
 sugar/sugar confectionery;
 mineral fuels including oil;
 beverages/spirits/vinegar;
  salt/sulphur/stone/cement;
 fruit, nuts;
 medical/surgical/optical/technical apparatus;
 sports goods;
 carpets and rugs;

imports:
 mineral fuels including coal/oil/petroleum/oil products;
 machinery/electronics/electrical equipment;
 iron/steel;
 chemicals/chemical products;
 vehicles/cars;
 plastics/plastic articles;
 animal/vegetable fats/oils/waxes;
 oil seeds;
 cotton;
 wheat:
2 @ 1 mark

4(b)(iii) Describe the changes in the types and value of goods imported andexported by
Pakistan in recent years. 4)

 fewer food products are imported;

 imports of fuel energy are decreasing;
 imports of high value/capital goods has increased (e.g. machinery to manufacture its
products);
 imports of consumer goods have decreased (e.g. computers,appliances, clothes);
 exports of low value/primary /agricultural products have decreased;
 exports of high value/manufactured/processed/industrial products have increased;
 exports of value added goods have increased;

Note: reserve 1 mark for exports and 1 mark for imports.

4 @ 1 mark

4(c) Explain how trading blocs and currency exchange rates affectPakistan’s trade.
You should develop your answer. 4)

trading blocs:
 members have a free trade agreement/there are low or zero trade restrictions; which
encourages trade between member states e.g. Pakistan is a member of SAARC/so more
goods can be exported to member countries by Pakistan;
 since 2014 Pakistan has had preferential access for its exports to EUmarkets; with low or zero
tariffs on most goods increasing trade;
 Pakistan is a member of ECO/ASEAN; but some trade barriers remain;
 have trade barriers; which hinders trade between non-member states which affects Pakistan if it
does not belong to a particular trading bloc;
Etc.

exchange rates:
 determine the cost of imports and the value of exports; therefore the increase or decrease of
the PK Rupee is significant to trade;
 determine the amount of overseas investment; companies/government/ people more likely to invest
in Pakistan if the exchange rate is favourable;
 currency depreciation means that imports are more expensive/exports have lower value; this can
reduce trade as Pakistan may not be able to afford to import as many goods/will earn less from
exports;
  currency appreciation means that imports are cheaper/exports have higher value; this can increase
trade as Pakistan can afford to import more goods/will earn more from exports//however Pakistan’s
exports maydecrease as countries may shop around for cheaper goods elsewhere.
Etc.

Note: One mark for identification of appropriate idea and a further mark fordevelopment.
Note: Max. 2 marks if no development.
2 @ 2 marks

4(d) In 2017 Pakistan’s balance of trade was affected by a 0.2 per cent decrease in the value of
its exported goods and a 5.1 per cent increase in the value of imported goods. Read the
following two views:

View A
Pakistan could decrease the amount of cheap goods imported to improve the balance of
trade.

View B

Pakistan could export goods to a wider number of countries to improve the balance of trade.

Which view do you agree with more? Give reasons to support your answer and refer to
examples you have studied. You should considerView A and View B in your answer. 6)

Content Guide

Answers are likely to refer to:

agree with View A:

 Pakistan could manufacture many of the products that it imports creating jobs;
 many of the goods imported are not needed but are imported due to an increase in consumerism;
 Pakistan can educate people on the impact of consumerism on the environment;
 by focussing on local industry e can improve standards of goods can be improved e.g. by working
with PTEC (Pakistan Technical and Educational Council) for training.
Etc.

disagree with View A:

 Pakistan does not have resources to manufacture goods that it imports;
 it would cost too much to make the products/cheaper to import them; it iscostly to develop
infrastructure and to train and educate people;
 it may be difficult to support the domestic demand for products that are no longer imported.
 importing cheap goods does not affect the balance of trade significantly; Etc.

agree with View B:

 Pakistan currently only exports to five main countries;
 increasing the number of countries that Pakistan can export to will mean that Pakistan will
increase manufacturing /employment and earn more income;
 Pakistan will be less reliant on a few countries for trade; Etc.

disagree with View B:

 it may not be possible to make trade agreements with more countries;
 there is a lot of competition for trade;
 trade blocs e.g. EU or individual countries may place tariffs on importsreducing the impact on
the balance of trade;
 increasing exports is not the only/best way to improve the balance of trade;
 Etc.

Evaluation may argue:

that both ideas are necessary for improving Pakistan’s balance of trade.

4(b)(i) 3)

 Faster / more efficient form of transport / to reduce time of journey;

 Industrial estates are built along the route / promotes industrial growth;
 Trading / raw materials can be delivered to industries / finished products can be delivered
to markets / dry ports;
 More employment opportunities can be provided (due to industrial expansion);
 Motorway can be further expanded to connect Afghanistan and the Central Asian Republic /
increase foreign trade / increase in importsand exports;
 New settlements can be established along the route;
 Connects cities / to outlying rural areas;
 Promote tourism;
 Relieve traffic on other roads , e.g. N5;
 Reduce accidents / safer.
3 @ 1 mark

4)

Accurate completion of percentage bar chart.

4@ 1 mark

3)

 Primary = farmer, miner, fisherman;

 Secondary = factory worker, builder, chef;
 Tertiary = teacher, nurse, train driver.
3 @ 1 mark

2)

Accurate shading and labels for 2 countries.

 Afghanistan
 Australia
 Bangladesh
 Belgium
 Egypt
 Canada
 China / Hong Kong
 Denmark
 France
 Germany
 India
 Japan
 Kenya
 Kuwait
  Malaysia
 Holland
 Poland
 Portugal
 Russia
 South Africa
 South Korea
 Saudi Arabia
 Spain
 Sri Lanka
 Switzerland
 Sweden
 Tanzania
 Turkey
 Thailand
 United Arab Emirates
 United Kingdom
 United States of America
 Yemen
2 @ 1 mark

3)

 Machinery / computers
 Electrical appliances / electronics
 Wheat
 Mineral oil / petroleum / crude oil
 Tea
 Oil seeds
 Vegetables
 Vegetable oils / edible oils / animal fats / waxes
 Coal
 Vehicles
 Iron / steel / metals
 Chemicals
 Plastics
3 @ 1 mark

1)

Trade deficit is a negative balance of trade where the value of importsexceeds the value of the
exports.
1 @ 1 mark

2)

1979–1980: 23 519
Increased
2 @ 1 mark

4)
 Ideas such as:
 Value of imports is greater than exports (import of higher value goodscompared with goods for
export which are lower value);
 Export a small variety of goods (e.g. cotton, rice, sports goods, leathergoods, carpets and rugs);
 Import food items (e.g. not completely self – sufficient in food);
 weather-related points, (e.g. bad storms, heavy rain etc. leading to failed harvests);
 Trade barriers / restrictions on exports (e.g. child labour, environmental and health standards);
 Tough world market competitors / competition (e.g. Pakistan does notbelong to major trade
organisations, lack of standardisation / quality)
 Limited range of specialist / niche products that other countries need or want (e.g. standardisation
/ produce cheaper goods / have to import luxury items);
 Instability (deters foreign investment);
 Shortage of skilled / knowledgeable people to manage products; Etc.

Note: One mark for identification of appropriate idea and a further mark fordevelopment (in
parentheses).

Note: Max. 2 marks if no development.

2 + 2 marks

Content Guide
Answers are likely to refer to:

To increase exports:
 Exports with higher value-added element encouraged;
 Develop cottage and small-scale industries – especially using local raw materials;
 Increase variety of exports;
 Develop EPZ – export processing zones;
 Reduce taxes on exports;
 Boost industrialisation by developing export agencies e.g. Export Promotion Bureau;
 Strict quality control;Etc.

To restrict imports:
 Tertiary sector – less reliance on foreign employees, train Pakistaniworkers;
 More goods produced in Pakistan – both low and high value goods;
 Less reliance on other countries / use home produced raw materials if possible;
 More food could easily be produced in Pakistan;
 Improves local economy;Etc.

Note: Candidates may suggest that both ideas work hand in hand, i.e. by reducing imports and increasing exports
the development of EPZs would bea logical step.
 1)

China / UAE
1 @ 1 mark

3)

Imports
 China/India – regional superpower/strong economy/neighbouringcountry/has land links;
 China/India – source of capital/manufactured goods/ technological goods/import machinery;
 UAE/Kuwait/Saudi Arabia – source of oil;
 Malaysia – source of palm oil;
 India – source of primary commodities, e.g. fruit and vegetables.

Exports
 Any named country – increased sales/markets/market share/enlarge market
share;
 China/Afghanistan – neighbouring countries with land links;
 Afghanistan – foodstuffs such as rice, sugar;
 China – to maintain relations/political ties with regional superpower;
 UAE – nearby country via sea/Arabian Sea/Makran Coast;
 USA/Germany/UK – developed economies raw materials, e.g. cotton yarn/woven cloth or
manufactured goods, e.g. sports goods,linen, suits.

Note: Country must be named plus import or export.

Note: No additional products or countries allowed.

3 @ 1 mark

1)

The difference between the value of goods imported and exported by a country/the value of imports
subtracted from exports/the value of exportsminus imports.
1 @ 1 mark

3)

 Value of goods imported is more than the value of goods exported;

 Uncompetitive quality/low quality of exports;
 Unable to fulfil domestic needs of population;
 Import tariffs/quotas in other countries;
 Dependency on import of capital goods/machinery/ oil/high valueadded goods;
 Dependency on importing/exporting agriculturalproducts/food/named
examples;
 Depreciating own currency/rupee against dollar;
 Trade embargoes imposed by other countries.
3 @ 1 mark
 2)

 Foreign debt;
 Dependence on foreign aid;
 Need to use country’s cash reserves/assets/loss of foreign exchange;
 Development projects cancelled/delayed;
 Rise in taxation;
 Strategies to increase exports/high value exports/ Governmentencourages local industry
to export;
 Country’s currency depreciates, so imports become expensive.
2 @ 1 mark

(c) (i) Name two of Pakistan’s main exports. [2]

Linen / textiles / clothing / men’s suits / bed linenRaw cotton / cotton

yarn / cotton products Carpets / tents /rugs
Rice
Refined petroleum / oilCement
Leather / leather products / named leather product e.g. shoesSports goods
Surgical instrumentsChemicals

(ii) Read the following article:

Pakistan produces many goods that could be exported in greater quantities. For a variety of
reasons the amount of exports remains low: in 2013 the value of exports wasonly 13% of GDP.

Explain why it is difficult for Pakistan to sell more of its goods to other countries.

[4]

Challenging to compete with foreign / larger companies / producers (accept an example,

e.g. Egypt – textiles)
Quality of items (lack of access to / high cost of raw materials / machinery)Child labour causes
barriers to trade (e.g. EU)
Limited management expertise in the export industry
Other countries have trade barriers / tariffs / quotas / restrictions (to protect their ownindustries / markets)
Relations with some other countries restricts trade
Pakistan government may have trade barriers with other countries (e.g. China – oncheap imported goods)

Maximum of 2 + 2 (mark + development mark)

1 (a) Study Fig. 7, which gives information for the Gross Domestic Product (GDP) of
Pakistan in 1992 and 2012.

(i) What is meant by the term Gross Domestic Product (GDP)? [1]
Annual sum/total value of all output/goods and services produced within a country Income
generated by a country’s own workers and resources

(ii) A. What percentage of GDP came from services in 2012?

B. What might be included in the category ‘other industry’?
C. State whether the share of GDP from the following has increased, decreased, or stayed
the same in the period from 1992 to 2012: Agriculture Manufacturingindustry [3]
A. 53–54%1 mark
B. Mining/construction/power/fishing/forestry 1 mark Not list rule
C. Agriculture decreased: manufacturing increased Both to be correct for 1 mark
 (b) Study Fig. 8, which shows the value of exports and imports in Pakistan in 2011.

(i) Name a textile product exported by Pakistan. [1]

Garments/bed linen/cotton cloth/cotton yarn/carpets/rugs/suits/towels/fabrics Use list rule

(ii) How much greater is the total value of all imports than the total value of all exports? [1]
8290 US$

(iii) Use Fig. 8 to describe three differences between goods Pakistan exports and imports. [3]
Animal products/leather exported but not imported
Edible fats and oils/vehicles and transport imported but not exported
Vegetable products/textiles and textile products (much) more exported than importedMetals more imported
than exported
Mineral products/ chemicals /machinery and instruments much more imported thanexported
Value of imported goods more balanced/evenly spread than exported goodsMainly exports primary
goods but mainly imports manufactured goods
High value/low value goods = 0

Only accept complete comparisons of exports with imports (and like with like)

(c) Explain two problems for Pakistan’s economy caused by the differences you have
described in your answer to part (iii). [4]
Narrow export base/overdependence on a few export items (so if low production e.g. poor
harvests, no surplus/profit)
Main export/import items subject to world price fluctuations/vagaries of commodity market
(e.g. oil, cotton, rice) (so some years there may not be a profit/economy goes into debt/has not
surplus)
Exports are largely low value-added products which do not earn a great deal/great deal of
foreign exchange [from small and cottage industries] (so other countries benefit more when
add value)
Exports are items subject to high competition in the world market (so may not find a
market)
Lack of quality control of export items (so may lose orders)
Production of main agricultural export items is subject to variations in weather and effects
of pests (e.g. poor cotton crop due to unfavourable weather/virus/lack of rainfall/frost etc.)
Imports are mainly high value-added products and therefore expensive (such as manufactured
goods/capital goods/luxury goods)
Food (e.g. wheat) has to be imported that could be grown in Pakistan Importing
consumer good which harms Pakistan industry (named consumer goods/industry)
Value of imports are greater than the value of exports (causing negative balance of payments).
Award second mark per line for explanation (parentheses show examples) Two
problems explained @ 2 marks each
(d) (i) State one main trading partner with Pakistan for each of exports and imports. [2]
Exports: USA/UAE/Afghanistan/China/UK/Germany/EU Imports:
China/Saudi Arabia/UAE/Kuwait/USA/Japan/EU2 × 1 mark

(ii) Describe a method of transport that could be used for trade with one of the countries
stated in your answer to part (i). Suggest the benefits of using this method of transport. [4]

• Ship/by sea (1), shorter link to European markets, freight costs low/cheap, modern port facilities
especially for containers/bulk cargo/oil, Middle East readily accessible, ports are warm water and
open all year

• Aeroplane/by air (1), effective for low volume/lightweight goods, very quick, useful for
perishable/high value goods, e.g. fruits and vegetables Fragile/delicategoods = 0

• Truck/lorry/by road (1), link to China/Iran/Afghanistan/India, useful for smaller consignments, e.g.
electronics/medicinal herbs/Chinese fabrics/decorative items/toys/cotton textiles/dried
fruits/hosiery, useful for perishable/high value goods

• Train/by rail (1), link to Iran, cheaper for long distance, useful for bulky/heavy goods,
e.g. food grains/cotton/oil/fertiliser/heavy machinery, effective for low value goods

1 mark for method of transport

3 marks for any three benefits listed Marks are for
transporting/handling goodsEasy/easier, references to
safety = 0

(e) ‘There are more factors that hinder trade between Pakistan and other countries than
factors that help trade.’

To what extent do you agree with this view? Give reasons and use examples you have
studied to support your answer.
[6
]
Indicative content (development of points/place-specific detail/examples in parentheses)

Hinder
Lack of security/internal civil and tribal unrest/terrorism
Political instability/inconsistent government policies
Debt/imbalance of trade (leads to need for loans/foreign economic assistance and possible trade
embargo if default)
International tension (e.g. with India, historically since partition 1947 and periodically over
Kashmir so no significant trade with India has developed).
Mountainous terrain to NW. (Passes to Afghanistan e.g. Khyber, Kurram, and Khojak subject to
border tensions, landslides, and avalanches.)
Trade barriers/embargoes from industrialised countries (which express concerns about child
labour/health and safety/hygiene/environmental standards such as excessive use of pesticides
on cotton).
Membership of regional organisations (e.g. ECO/SAARC/WTO in 2004) (involves removing
import tariffs causing inflow of cheap imports)
Devaluing Pakistan rupee (makes imports, which are more than exports, more expensive)

Help
Improvements to transport infrastructure, (e.g. Karakoram Highway/new road Quetta to Chaman,
Afghanistan/upgrade to RCD Highway to open a route to Iran and Turkey) Development of ports
(particularly Karachi/Bin Qasim port for containers and bulk cargo/ Gwadar port/Makran Coast)
Membership of regional organisations (e.g. ECO/SAARC/WTO in 2004) (in which member
countries benefit from access to major world markets)
Tax incentives for exporters
Export Promotion Bureau/Trade Development Authority of Pakistan/Export Processing Zones
Devaluing Pakistan rupee (makes exports cheaper)

(b) (i) Name or describe a border crossing by road between Pakistan and a neighbouring
country. Which country is linked to Pakistan by this road? [2]

border crossing country

Koh-i-Taftan/RCDHighway Iran
Chaman/Quetta to Kandahar Afghanistan
Khyber pass/Grand Trunk Road Afghanistan
Khunjerab Pass/Karakoram Highway China
Lahore to Amritsar/Grand Trunk Road India
(ii) How useful is the border crossing you have named or described in (i) for trade? Give reasons
for your answer. [4]

* Very useful/great importance *Of very little or limited

Encourages/improves/increases – trade/ use/littleimportance
import/export/foreign exchange
Routes into Iran/Afghanistan
aremountainous/deserts

E.g. example named export/import

Security issues/tensions in FATA areas

Cheaper transport/shorter distance

totravel/saves time
E.g. Khyber Pass closed

Improved relations/better relations

Karakoram Highway blocked/closed in
winter

Due to snow/avalanches/landslides

Poor trading relations with India

(c) There are advantages and disadvantages to Pakistan of trading with
different countries or groups of countries. Read the following two views:

1. Pakistan would benefit from stronger trade links with China.

2. There are more advantages to Pakistan in maintaining trade with EU

(European Union) countries.

Which view do you agree with more? Give reasons and refer to places or
examples you have studied to support your answer.
[
6]

Indicative content (development of points in parentheses)

China

EU has trade barriers (custom duties and import quotas/tariffs/embargoes) with countries
outside the EU
EU may restrict trade (due to poor law and order situation/terrorism/environmental
issues/ child labour/political instability)
Cottage and small scale industry products may lack international quality standard
acceptable to EU
Can avoid reliance/dependence on Western powers
Chinese imports are low-priced (and meet local
demand)
China faster growing economy so Pakistan can earn more foreign
exchange Land link with China (Karakoram Highway/Khunjerab Pass)

EU

EU countries politically/economically stable (so fewer changes in market

trends) History of stable trade relations with European countries since
independence
China likely to manufacture products that Pakistan exports (in greater quantities/at
lower prices)
Cheap Chinese imports may threaten domestic industries
Accept converse arguments

1 (a) Study Fig. 5, which shows the exports of Pakistan in 2007 by percentage.

(i) What percentage of the exports was cotton?

60 (%) [1]

(ii) Suggest reasons why cotton makes up a large percentage of Pakistan’s exports.
Produces a surplus of raw cotton / large production
Large international demand / Cannot be grown in other countries/Europe Cheap
labour/ competitive price
Can be a variety of products [3]
 Many textile mills / factories

(iii) From Fig. 5 state

A one item that has increased in its percentage,
rice

B two items that have decreased in their percentage. [3]

Leather, synthetic textiles, sports goods

(b) Study Photograph B (Insert 1), showing Landhi Export Processing Zone, Karachi.

(i) What features show that this is a modern, developed industrial estate?
Good / pucca / metalled / wide Street
lighting
Electricity supply Trees/
greenery
Modern / good quality buildings
Planned / straight roads [4]

(ii) Explain the importance of Export Processing Zones. Good

quality goods / export quality / to International standards Can
increase economy / income / exports / foreign exchange Better
infrastructure / power / water supply / road etc. (max. 2)Good
working conditions (max 2)
Modern buildings
Incentives e.g. tax breaks, cheap loans
Attracts investors / entrepreneurs
Aids growth of small-scale / cottage industries
Employment / jobs
Government helps with marketing events / trade fairs [4]
(c) Study Fig. 6.

(i) Give two advantages of transporting goods

by A Bullock Cart
Cheap /
economic No fuel
cost
Available / used in other farm work

B Lorry
Quick / fast
Carries bigger / heavier load
Can go further / does not need to rest
(2 marks each) [4]

(ii) To what extent would the building of more motorways such as that
between Lahore and Islamabad help the development of industry in
Pakistan?
Advantages/ Potential (res. 2)
Better movement of finished products FROM industry to ports and other towns
Better movement of raw materials / machinery TO industry
Stimulates industrial development near motorway / opens up undeveloped areas
Helps development of dry ports
Better movement of businessmen / tourists / experts
Faster travel
Better road surface / wider for large vehicles / lorries / well-maintained
Shorter / by-passes towns and villages / short cut
Relieves other roads / relieves congestion

Disadvantages / Problems (res. 2)

Expensive
Takes long time to build
Needs maintenance
Cost to economy / increase debt
Only connects large centres
Will not go to many small towns / rural areas / anywhere