My Dear Readers, I am making an attempt to share some important aspects of Imports and Exports. This post of mine would address and highlight the effects of import as well as the effects of exports on a country’s Economy.
It is obvious that any country which gives priority and importance to its exports, can make its economy stronger and stronger, year by year while the import is equally significant to be taken care of. The import and export process is extremely central as it has a great impact on the Gross Domestic Product (GDP). The import and export movement of a country effects the exchange rate as well as the inflation. In my opinion since it has a great impact on GDP, therefore it is vital that both the process should be balanced.
While I think a country needs to be more vigilant and should put powerful efforts on its exports because the exports increase the exchange rate, when a large amount of money enters into the economy of a country it strengthens the country’s economy. While in the process of import, if it is done at large level (importing goods and material beyond the needs) then a large amount of money goes out of the country which creates trade shortfall and it results in weakening the country’s economy as it badly effects the exchange rate of the country.
Now having understood the process, it is very important and very essential that in the best interest of the economy and to keep the exchange rate balanced and growing, all potentials and focus must be on exports rather than imports, (in my opinion). The export process is done in two ways, directly and in-directly, the direct way is that a company sells it material and product directly to a customer outside its home country while the indirect way is that the export is done through second party. Similar is the importing process although in both activities the transportation process also matters as it also impacts the overall rate of the products.
It is very crucial for the Finance Division or Finance Ministry to plan the import and export activities in such a way that year by year the exports could increase, for the purpose it becomes indispensable to watch and check the international market for the export of its goods and materials. Similarly, check and identify that which country’s produces what material and goods at what prices and rates which my country requires. But before this it would be more fruitful that a country may firstly identify its own goods, items, products, foodstuffs and crops and its quality level, it would be more productive if the products and goods are divided into categories, then needs to find out which countries needs what product, goods, material and food items and of which quality/ category.
Introduce the goods, material, food items and the products to that country keeping in view the international market rates, negotiate and export the goods and products. If efforts are made to the best and not only the high and good quality products are exported but also the other low category goods and products are also exported then that would be a strong and healthy export, it will definitely play a vital role in the growth of economy. It is not that I am saying that all good quality goods, food items and products should be exported, it is crucial that the required number of quality products should be kept for the country itself as well.
Similarly, searching the international market for quality imports needs to be done as well, while it would be healthier if a country could increase its own potentials to cater the needs of its country in terms of the required material or goods or food items so that little items could be imported. Now having said all the above, two things comes out of the discussed matter which is of high importance. 1. Searching the international Market for both purposes, a) to check its own quality products, items, crops and goods which could be exported at a good/ high price/ rate. b) to check the international market for the required products, good, items and products and its rates/ prices that is needed and which the country does not produce.
Above all, coming to the conclusion, I would say that if a country becomes able to exports all the categories of all of its products and items, it will enable the country not only to increase its economic growth but it will also enable the country to import whatever it needs as it exports is growing and its economic condition is strong. The GDP will get stable and the exchange rate would not suffer. Since the GDP is stable then the business will grow and so is the Economy.