which also affected Pakistan.
The investments in the country have declined to the lowestand the major reason is the law and order situation prevailingin the country. The self-imposed war against terrorism hasmade our situation worse as no one is willing to makeinvestments in the country.
The local industry is facing hard times as we don’t havesufficient energy resources available. It has decreased theproduction of goods and ultimately we have to buy them fromother countries which add to our import bill and increase thesupply of our currency.
Pakistan is agriculture based country and we have one of thefinest and largest canal system. But would you believe that weneed to import sugar, wheat and other basic crops to meet thedemand in the country? In recent year Pakistan needed toimport tons of sugar and wheat just because of themismanagement of resources and water shortage created byIndia by building dams on rivers which are flowing towardsPakistan.
Energy crisis needs to be separately mentioned because it notonly affected the Textile industry but overall the economicactivities in the country are paralyzed. And we need to putsome serious efforts to eliminate it otherwise theconsequences will be dangerous.
Political instability in the country has always affected thegrowth of the country and it does affect the trade andultimately the current account of the country.
The government policies are the tools to take correctiveactions to make the things stable and on the track but wrongpolicies may lead to adverse affects. We have been lacking ingood policies regarding the economy of the country.
Inflation, as we’ve discussed in class is a factor which affectnot only the trade but the foreign exchange as well. Theincreasing rate of inflation will lead to the surplus supply of thecurrency and it would depreciate the currency value. Once the