Role Of Foreign Trade In The Economic Development

IMPORTANCE:
Foreign trade plays very important role in the economic development of any country. Pakistan also exports a lot of agricultural product to other countries and imports the capital goods from other countries. The role of foreign trade can be judged by the following Facts

MARKET EXPANDS:
The demand factor plays very important role increasing the production of any country. The foreign trade expands the market and encourage the products. In pakistan home marke is very limited due to poverty. So if is necessary that we should sell our product in other Countries.


INCREASE IN INVESTMENT:
Foreign trade encourages the investors increase the investment to produce more Goods. So the investment increase.


REMOVAL OF MONOPOLIES:
Foreign trade also discourages the monopolies. Whenever any monopolist increase the price government allows the import of goods to reduce the price in the country. Formation of monopoly is also discouraged by the international trade.

REMOVAL OF FOOD SHORTAGE:
Pakistan is also facing the food shortage problem. To remove the food shortage pakistan has improved the wheat many times. So due to foreign trade we solved this problem many times.

AGRICULTURAL DEVELOPMENT:
Foreign trade has played very important role for the development of our agriculture sector. Every year we export rice, cotton, fruits and vegetables to other countries. The  export of these goods makes our farmer more prosperous. It inspires the spirit of development in them.


INCREASE IN EMPLOYMENT:
With the rise in the demand of food domestic resources are fully utilized and it increased the rate of development in the country and reduces the unemployment in the world.


INDUSTRIAL DEVELOPMENT:
Now the share of industrial sector is increasing day by day in the export. The government of pakistan has also provided various incentives to the industrialists to improve the export of this sector. So the rate of industrial development has increased.

FOREIGN EXCHANGE EARNINGS:
Foreign trade provides exchange which can be used to remove the poverty. By improting technology we can utilize our resources.


RISE IN NATIONAL INCOME:
Foreign trade increases the scale of production and national income of the country. to meet the foreign demand we increase the producitvity on large scale so GNP also increases.


USEFUL FOR THE WORLD PEACE:
Today all the countries are tied in trade relations with each other. So foreign trade also prevails peace and prosperity in the country.