Export Promotion Of Import Substitution

1182 WordsNov 29, 20145 Pages
In the ever globalizing world of today, exports have become a fundamental ingredient in country 's growth. Many countries, especially the less developed ones , often use policies of trade liberalization to boost up their exports. The most commonly used policy is import substitution. However, sometimes export promotion also becomes a prominent part of country 's economic policy. Unfortunately, Pakistan has never had a consistent, coherent and well-articulated trade policy. Trading patterns have closely followed a cycle defined by a major departure from and return to protectionist import substitution policies. For Pakistan, import substitution strategy failed to boost up the economic performance of the country. Although, the policy of import substitution has resulted in the promotion of industries oriented towards the domestic market by using import restrictions, through high tariffs, quantitative restrictions, overvalued exchange rates, to encourage the replacement of imported consumer and manufactured goods by domestic products but it was also observed that domestic industries growing behind protective tariff walls had no incentive to become efficient in production. Infant industries also never grew up. In addition, Import substitution policies accompanied by exchange controls promoted the use of more capital-intensive techniques of production. Just by looking at the way Pakistan’s trade policy has fluctuated from protectionism to liberalism and back and forth repeatedly

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