5 Questions
What is the role of International Monetary Fund (IMF) and World Bank in preventing a country from running out of cash over short periods?
They provide loans to countries.
Which intergovernmental agreement aims to reduce or eliminate regional barriers of trade in South Asia?
SAARC (South Asian Association for Regional Cooperation)
Define imports in the context of international trade.
Goods and services bought by one country from another, leading to foreign exchange leaving the country.
Which countries are among Pakistan's main import partners, contributing to 40% of its imports?
Saudi Arabia, Kuwait, United States of America, Japan, Malaysia, Germany, UK, China, and EU.
List three methods to reduce imports as mentioned in the text.
Increase standard and quality of goods, impose heavy taxes on imports, apply quota system.
Study Notes
Advantages of Trade Restrictions
- Reduce foreign dependency
- Protect local industries
- Create employment opportunities
- Exploitation of local resources
Disadvantages of Trade Restrictions
- Corruption may rise
- Poor quality and standard due to less competition at International level
- No control on prices
- May lead to monopoly
- Limited good variety
Trading Blocs
- Regional groupings of international economies for greater economic cooperation and facilitation of free trade
- Lower or zero trade restrictions between members and strong trade barriers against non-members
SAARC (South Asian Association for Regional Cooperation)
- Founded in Dhaka in 1985
- Secretariat is in Kathmandu
- Promotes development economics and regional integration
- Member states include Afghanistan, Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan, and Sri Lanka
ECO (Economic Cooperation Organization)
- Founded in 1985 in Tehran by Iran, Pakistan, and Turkey
- Provides a platform to discuss ways to improve development and promote trade and investment opportunities
- Aims to establish a single market for goods and services
ASEAN (Association of South East Asian Nations)
- Founded on August 8, 1967
- Comprises ten countries: Brunei, Myanmar, Cambodia, East Timor, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam
- Aims to accelerate economic growth, social progress, and cultural development among its members and promote regional peace
Pakistan and European Union
- European Union is an economic and political group and a trading bloc of 27 member states primarily in Europe
- Formed in 1993 to enhance political, economic, and social cooperation within member states
- EU has evolved as a single market allowing free circulation of goods, capital, people, and services within the EU
- Goods and services are not subject to custom duties and import quotas within the EU
- EU countries include Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden
International Monetary Fund (IMF) and World Bank
- Help countries with loans to prevent running out of cash over short periods, with repayment conditions
IMPORT
- Goods and services bought from another country, resulting in foreign exchange leaving the country
- Pakistan imports from over 100 countries, with 40% coming from seven countries: Saudi Arabia, Kuwait, USA, Japan, Malaysia, Germany, UK, China, and EU
- Main imports include machinery, electrical appliances, vegetable oil, wheat, mineral oil, edible oil, tea, and stationary
Explore the concepts of trade, advantages and disadvantages of reducing foreign dependency, protecting local industries, creating employment opportunities, and exploiting local resources. Learn about trading blocs and their impact on international economies.
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