BS/B.

Com/ADC

COMMERCIAL
GEOGRAPHY
Course Code: 8595/1428

Department of Commerce
Faculty of Social Sciences & Humanities
ALLAMA IQBAL OPEN UNIVERSITY
 Final: 9-4-2021

COMMERCIAL GEOGRAPHY
LEVEL BA/ADC/BS

Course Code: 8595/1428 Units: 1–9

DEPARTMENT OF COMMERCE
FACULTY OF SOCIAL SCIENCES & HUMANITIES
ALLAMA IQBAL OPEN UNIVERSITY
ISLAMABAD
 (All rights Reserved with the Publisher)

First Edition ...................................... 2021

Quantity ............................................ 5000

Price ..................................................

Typeset by: ........................................ M. Hameed Zahid

Printing Incharge ............................... Abdul Rehman Cheema

Printer ............................................... AIOU-Printing Press, Sector H-8, Islamabad

Publisher ........................................... Allama Iqbal Open University, H-8, Islamabad

ii
 COURSE TEAM

Dean Faculty of Social

Sciences & Humanities: Prof. Dr. Syed Hasan Raza

Chairman: Tanvir Ahmed

Assistant Professor
Department of Commerce

Course Development
Coordinator: Asia Batool

Complied by: 1. Arfa

2. Asia Batool

Reviewers: 1. Hussnu-Nul-Amin
2. Asia Batool

Editor: Fazal Karim

Typeset by: Muhammad Hameed

Title Design: Mushtaq Hussain

iii
 CONTENTS
Page #
Introduction ...................................................................................................... v

Objectives ......................................................................................................... vi

Unit 1: Introduction to Commercial Geography ............................................... 1

Unit 2: World Commercial Geography............................................................. 15

Unit 3: Commercial Geography of Pakistan ..................................................... 39

Unit 4: Natural Resources of Pakistan .............................................................. 59

Unit 5: Agricultural Resources of Pakistan ...................................................... 77

Unit 6: Transportation & Communication Channels ........................................ 99

Unit 7: Industries and Manufacturing ............................................................... 123

Unit 8: Domestic Trade ..................................................................................... 139

Unit 9: Foreign Trade of Pakistan ..................................................................... 155

References ....................................................................................................... 175

iv
 INTRODUCTION OF THE COURSE

Commercial geography is one of the important courses offered in bachelor’s

degree program at department of commerce at AIOU. Keeping in the view the
importance of commercial geography, this course has been included in the scheme
of BS/BA/B.Com. This course consists of nine units, each unit is provided with
sufficient theoretical background and questions to develop strong understanding
of the subject.

Unit-1 is an introduction to commercial geography whereas unit-2 is describing

the commercial geography of the world. Unit-3 is an introduction to commercial
geography of Pakistan and subsequent units are describing the different aspects of
commercial geography of Pakistan such as natural and agriculture resources,
transportation and communication channels, service and manufacturing industries,
domestic and foreign trade.

The course has incorporated the recent trends, facts, figures and related
institutions. The content of the course is taken from reliable sources including
Economic Survey of Pakistan, Karachi Port Trust, National Transport Research
Centre (NTRC), Pakistan Agriculture Research Council, Chamber of industries
and published material in recognized journals. Students are however strongly
encouraged to widen their understanding through looking at other supporting
books and publications.

At the end I would like to pay gratitude to the experts helped in compiling the
contents and faculty at department for their support. Your suggestions however
for improvements will be welcomed always.

Ms. Asia Batool

Course Coordinator

v
 OBJECTIVES OF THE COURSE

The main objective of this course is to understand the geography and its
importance in economic and commercial prospective. However, after going
through this course, student will be able to:

1. to understand basic concepts and key approaches in Commercial and

Economic Geography.

2. to know the continents of the world and their location.

3. to introduce the geographical location and neighbor countries of Pakistan.

4. to elaborate the major economic zones of Pakistan.

5. to explain the types of mineral and agriculture resources in different regions of

Pakistan.

6. to know the modern electronic media and its role in the development and
progress of a country.

7. to know the concept of special industrial and export processing zones.

8. to understand the procedure of domestic and foreign trade.

vi
Unit–1

INTRODUCTION TO
COMMERCIAL GEOGRAPHY

Complied by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin

1
 CONTENTS
Page #
Introduction ....................................................................................................... 3

Objectives ......................................................................................................... 3

1.1 Definition and Meaning of Geography .................................................... 4

1.2 Branches of Geography............................................................................ 5

1.2.1 Human Geography ....................................................................... 5
1.2.2 Physical Geography ..................................................................... 5

1.3 Approaches to Economic Geography ...................................................... 6

1.4 Economic and Commercial Geography ................................................... 6

1.5 Scope of Economic and Commercial Geography .................................... 7

1.6 Key Concepts of Economic Geography................................................... 8

1.7 Importance of Economic and Commercial Geography ........................... 9

1.8 Theories in Economic Geography ........................................................... 10

1.3.1 Neo-Classical Approach, Location Theory.................................. 10
1.3.2 Marxist-Inspired Approaches and uneven development.............. 11
1.3.3 Alternatives Approaches and New Economic Geography........... 12

Summery ........................................................................................................... 13

Self-Assessment Questions .............................................................................. 14

2
 INTRODUCTION

The Commercial geography is the combination of two Greek Words Geo means
the earth and Grapy means the description. In this unit introduced about the
concept of commercial geography. Commercial geography is the relation between
the Geographic features and the commercial activities. In the second section
branches of geography like Human Geography, Economic geography and
Physical Geography will be discussed in detail. Additionally, concept of
Commercial Geography will be explained through different approaches and
theories. Neo-classical approach, location theory, Marxist-inspired approaches
and uneven development alternative approaches and new concept of economic
geography will be discussed in detail. Importance and scope of Commercial
geography for students, ECONOMIST, traders, industrialist, agriculturist and
rulers will be discussed. This unit will help to understand the modern Economic
world through the study of Economic and Commercial Geography.

OBJECTIVES

The main objective of this unit is to understand the geography and its importance
in economic and commercial prospective.

The specific objectives of the unit are:

1. to understand the background of Geography.
2. to explain the branches of Geography
3. to highlights the scope and importance of Economic and Commercial
Geography.
4. to explore the basic concepts and key approaches in Commercial
Geography.
5. finally, to deliberate the theories of Economic Geography

3
 INTRODUCTION TO GEOGRAPHY

Upon hearing the word 'geography' most people immediately think of maps
which detail physical landmasses and oceans on the Earth's surface. While
geography does include the production of maps (cartography), it is also the study
of much more than just physical or even cultural features on a map. Geographers
study the space and the temporal distribution of phenomena, processes, and
features as well as the interaction of humans and their environment. The study of
geography as a science of the Earth began from very early times.

However, its scope remained limited, as its study was confined only to the
environmental conditions in which the ancient lived; with the passage of time man
also began to study the effects of environment on living things. The modern
geographers tried their best to make the subject more interesting and useful. They
tried to study geographical facts on scientific basis. Thus, the modern Geography
included the activities of man on the Earth as an essential part for the study of
Geography.

The history of geography includes many histories of Geography which have

differed over time and between different cultural and political groups. In more
recent developments, geography has become a distinct academic discipline. The
history of geography was influenced by many theories, arising mainly from
economics and geography. It is a subject which employs a geographical approach
to provide insights and understanding of the economy.

However, as Commercial activities are increasing so geography becomes more

important than ever. Geographers illuminated many aspects used today in the
field; maps created by different European powers described the resources likely to
be found in American, African, and Asian territories. Contemporary economic
geographers tend to specialize in areas such as place theory and spatial study with
the help of geographic information systems, (GIS), market research Geography,
transportation, real estate price evaluation, regional and global development,
planning, Internet geography, innovation, social networks.

1.1 DEFINITION AND MEANING OF GEOGRAPHY

The word geography is a combination of two words “Geo” and “Graphy”. Geo is
a Greek word which means “The Earth” and the word “Graphy” has been derived
from the word “Graphen” which means- “Description”. So, geography means
Description of the Earth. Geography is a science that seeks to analyze the physical
environment as well as to study human influences and interactions with the
environment.

4
 “Geography is concerned to provide accurate, orderly and rational
description and interpretation of the variable character of the Earth surface.”
(Reference, Perspective on the nature of Geography. R. Mastshorne- p-21)
 “Geography as a branch of knowledge has for its object the description of
the surface of the Earth as evidence of man’s relationship with the Earth’s
surface the home of man.” (International Geographical congress 1908)
 “Geography as a whole is regarded as that department of knowledge which
studies the varied features of the Earth’s surface as the environment of
mankind”. (Dr. Scott, Ritter, Ratzel).

1.2 BRANCHES OF GEOGRAPHY

The field of geography is a vast with thousands of researchers working in dozens
of interesting sub-disciplines or branches of geography. Geography is divided into
two main branches:

1.2.1 Human Geography

Human Geography is the branch of social science that deals with the study of
people and their communities, cultures, economies, and interactions with the
environment by studying their relations with and across space and place. This is
the main branch at Geography and it mainly covers studies of the human race.
This normally involves their backgrounds, how they interact and their perceptions
about various ideologies. Human geography consists of a number of sub-
disciplinary fields that focus on different elements of human activity and
organization. One of them is commercial Geography.

1.2.1.1 Commercial Geography

Commercial geography is a sub-discipline that uses a geographical approach to
study the economy. Commercial geographers examine the distribution of
production and distribution of goods, the distribution of wealth, and the spatial
structure of economic conditions. It describes and explain the absolute and
relative location of economic activities, and the flows of information, raw
materials, goods, and people that connect otherwise separate local, regional, and
national economies.

1.2.2 Physical Geography

Physical Geography (also known as geosystems or physiographic) is one of the
two major sub-fields of Geography. Physical geography is that branch of natural
sciences which deals with the study of processes and patterns in the natural
environment like the atmosphere, hydrosphere, biosphere and geosphere as
opposed to the cultural or built environment.

5
1.3 APPROACHES TO COMMERCIAL GEOGRAPHY

As economic geography is a very wide discipline, the economic geographers

using many different methodologies in the study of economic phenomenon in the
world? There are many approches in economic approachesi.e Traditional
approaches, philosophic approaches and modern approches. Here we discuss
traditional approach of economic geography.

1.3.1 Traditional Approach

Traditional approaches are the approaches which are common in geography and
frequently used in Commercial geography. These are:

1.3.2 Regional Approach

In a Commercial geography, the term ‘region’ is very popular. It examines the
economic conditions of a particular region i.e. climatic region, a natural region, an
industrial region, an agricultural region, an administrative region or political
region. So several geographers have chosen this region approach in economic
geography because it gives better knowledge of different parts of system, their
relationship to each other and to the system as a whole.

1.3.3 Commodity Approach

The commodity approach describes the distribution pattern of a commodity, or an
industry (cotton textile industry) or a human occupation (fishing). The commodity
approach is very popular. It analyzes the division and sequence of their
development.

1.3.4 Principles Approach

In every sphere of human activity certain rules and principles hold well, they
provide the foundation upon which the different structures based. Economic
regions are based on certain fundamental principles. In the case of extraction of
minerals, or the localization of industries or the exchange of commodities
different principles based.

1.4 ECONOMIC AND COMMERCIAL GEOGRAPHY

 “Economic Geography is the intellectual interest to the study of

geographical facts relating to commerce”. (Reference G.D. Chisholm’s
handbook of Commercial Geography).
 “Economic Geography is the study of the way man adjusts his economic
activities to the physical environment” (Clime and others)
6
Economic and commercial geography is that branch of human geography in
which we study the Geographical description of production and distribution of
various products required by mankind. Therefore, we say that Economic and
Commercial Geography is the Geography of production and distribution. While
producing any product various factors contribute their effects on production.
These factors are related to the surroundings of a place of production or
distribution. Hence, one may say that Economic Geography deals with the factors
affecting the production of articles required for food, shelter and clothing.

Thus, the purpose of Economic and Commercial Geography is to study the

relationship between the factors affecting production, and also factors affecting
distribution and their relation with mankind. As the natural resources are unevenly
distributed and therefore, prosperity, development, demands and supply are also
variable, at different places, and the factors influencing the type or pattern of
production and distribution are dissimilar at different places depending upon the
progress of mankind.

1.5 SCOPE OF ECONOMIC AND COMMERCIAL

GEOGRAPHY
As the purpose and scope of Economic and Commercial Geography is to study
the factors responsible for production and distribution for production and
distribution of various commodities, to study the trend of consumption, together
with the problems involved. Thus we can say that Economics and Commercial
Geography is mainly concerned with the study of agriculture, minerals, industrial
resources and also means of transportation and trade centers of the world. So
more detailed explanation, about the factors of production and distribution are as
follows:

1.5.1 Study of Agricultural Resources

For the study of Economic and Commercial Geography it is essential to study the
causes to produce various agricultural products. It is also identified which factors
are responsible for the growth of agricultural products and also the factors that are
responsible for the commerce and trade of the agricultural products.

1.5.2 Study of Minerals Resources

The type and nature of mineral resources are available in the world for study.
Minerals are also an important factor of trade and commerce, because every
country in the world is not self-sufficient in mineral resources, in Economics and
Commercial geography, we study about the production and distribution of
different minerals found in the world.

7
1.5.3 Study of Industrial Resources
Agricultural and mineral resources are responsible for the growth and
development of industrial sector because agricultural and minerals are used as an
input in industries. So, industrial progress cannot be studied without the study of
other factors. Our agricultural produce plays an important role in the industrial
sector. A country with limited agricultural and mineral resources cannot be
progressed in the industrial sector.

1.5.4 Study of Means of Transportation

Transportation plays an important role for the progress of agricultural, minerals
and industrial resources. An industrial and agricultural produce cannot be brought
if means of transportation are not efficient. So, without the study of means of
transportation study of other factors is not possible.

1.5.5 Study of Traders

Trade centers also play an important role for the development of trade and
commerce of certain areas. All trade activities are carried through these centers
so, without the studies of trade centers commerce and trade of the other areas
cannot be promoted.

1.6 KEY CONCEPTS OF COMMERCIAL GEOGRAPHY

The study of Commercial geography put the concept of space, place scale and
trade. After the analysis the geographers draw the concepts. So, it is essential to
clearly understand these concepts.
1.6.1 Space
Space is the concept that refers to physical distance and area. In this concept
different type of simple questions are to be asked such as where a particular
process is happening. Following are the elements that related with the concept of
space.
 Form of a particular country.
 Location of a particular country.
 Trade flows between countries.
 For a capitalist system the concept of uneven space is necessary.

1.6.2 Place
The concept of place refers the specificity of a particular place. Through this
concept geographers explore the richness and complexity of particular places and
also the economic processes that are the part of environmental, social, cultural,
institutional and political context. The economic processes are much influenced
by the environmental, social, cultural, institutional and political contexts.

8
Therefore, the way economies are constructed and performed may be very
different in different places. So, the concept of place is somewhat indefinite
because it takes various shapes and sizes.

1.6.3 Scale
The concept of scale in economic geography helps us to organize places through the
spatial scales. Spatial scales that the economic geographers commonly used are:
 Global scale
 Macro-regional scale
 National scale
 Regional scale
 Local scale
 Lived places

It is important to realize that the above key concepts are not neutral tools for
describing the world but they are used for the presentation of the world.

1.7 IMPORTANCE OF ECONOMIC AND COMMERCIAL

GEOGRAPHY

Economic and Commercial Geography is very important now a day for students
and also very important subject for every person because its helps in various
fields of life, these some important are given below:

ECONOMIST Industrialist

Importance of
Students Economic and Agriculturist
commercial
Geography

Traders Rulers

9
The study of Economic and Commercial Geography play an important role for
Economist. It can help the economist while making economic planning. Through
the study of Economic and Commercial Geography economist can find out the
resources available in a country. The study of Economic and Commercial
Geography is also helpful for industrialist. It can help the industrialist to know
about the industrial processes and to learn know the raw material. So, an
industrial can easily invest his capital after studying the Economic and
Commercial Geography.

Agriculturalist can also get maximum advantage after the complete study of
Economic and Commercial Geography. When he knows about the quality of
seeds and new methods and techniques so, he can get maximum output. A trader
can trade his goods and services in such a way if he has complete knowledge
about the market, its size location and many others factors.

Thus, a businessman can make his business more efficient after the study of
Economic and Commercial Geography. The study of Economic and Commercial
Geography is also helpful for the students. Especially it can help the commerce
students to choose right path for their future, so that they can become successful
businessmen, industrialist, traders and bankers etc. The study of Economic and
Commercial Geography can guide the ruling class, they can know about the
agricultural, minerals and industrial progress in different parts of the world. It tells
the people that how can they utilize the available resources and how they improve
their standard of living. The study of Economic and Commercial Geography can
guide the ruling class, how the best use of natural resources can be made. So, the
Challenges of poverty, hunger and unemployment can be handled.

1.8 THEORIES IN ECONOMIC GEOGRAPHY

Commercial Geography focuses on theories about distribution of economic

activities. Following are the theories in Commercial Geography that are discussed
below:
8.1 Neo-classical approach, location theory
8.2 Marxist-inspired approaches and uneven development
8.3 Alternative approaches and new economic geography

1.8.1 Neo-classical Approach, Location Theory

In Neo-classical approach the discussion is that the factors of production i.e.
(capital and Labour) will move across regions in order to maintain a balanced and
an efficient pattern of development. The fact in this theory is that in real life the

10
factors of production cannot move freely over different regions, there are various
constraints that are involved. For instance, the movement of capital such as
machinery, material or goods over the distant geographical location usually
involves cost. For labors, there is also involved the factors of cost.

One of the obstacles that are involved in the free movement of factors of
production is the Friction of distant. For manufacturing firms, there is cost
involved in moving raw material storeroom toward factory and there is cost
associated with delivering finished products from the factory to ultimate
consumers. Thus, for the people and business the strategy for the personal interest
and profit maximization is based on the localization. So, the calculation of cost
that related with the moving of factors of production in any geographical location
forms the basis of Neo-classical location theory. Thus, the obstacle of distant of
friction can be eliminating through the element of cost.

1.8.2 Marxist-inspired Approaches and Uneven Development

In this theory the issue of unequal and uneven development will be considered.
This theory will include a discussion on wealth, value and circuits of capital.
Wealth can be defined as a share of the reward that is generating during the
economic process of adding value. The creation of value is therefore general in
the economic development and particular in the uneven development. In this
theory we learn what is value and how is value created? According to the Marxist
theory the value is created through human labour. Value is always created by
people or labour. Workers engage in a labour process by applying their labour on
raw material in order to produce finished goods and these finished goods create
values.

Marxist theory made distinguishes between several types of values. In this theory
the key distinction can be made between exchange value and use value. Exchange
value is a value for which you need to pay a certain price to buy them that is
expressed in money. It is the value of a commodity to the person who uses it. For
instance, of drinking a glass of juice. This theory also describes the circulation of
value in different circuits of capital. However, for the capitalist the need to make a
decision about what to do with the little capital (surplus value) which they create,
and the other option is to re-invest their surplus value in the production process.

For instance, the owners of the pen making factory may decide to use the profit to
hire a few more workers. Capital is divided into three circuits; Primary circuits
involve investing the surplus value in production and continuously putting capital
to work with the primary circuit. The secondary circuit involves investing
surplus value in fixed capital. Capitalist investing their capital in the secondary

11
circuit (e.g. property and development project) has much expectations of realizing
their profit through the rental income and from the future sale price of the
building. Tertiary circuit involves investment in science and technology,
education, healthcare etc. this will increase the productivity and improving labor
capability.

1.8.3 Alternative Approach and New Economic Geography

New economic geography approaches often provide a contrast to both the Neo-
classic and Marxist approaches. New economic Geography approach is taking
various social, cultural, institutional and other factors. New economic Geography
approaches are shedding a new light on the problem of uneven development. For
the study of Commercial Geographies many scholars use a combination of
various approaches. On the one hand there are some key differences between the
Neo-classical and Marxist approaches and on the other hand new Economic
geography and the other alternative approaches are introduced for the discussion.
By discussing geographical implications among agricultural, stages theory, cycle
theories and wave’s theories are the theories that are examined to understand the
new Economic Geography concepts.

i. Stages Theory
Stages theory is look upon the economic development and implication of
broad sector stages between agricultural, manufacturing and services. This
theory is composed of four sectors.
 Primary sector related with the agricultural & Extractive activities.
 Secondary sector related with the manufacturing and production.
 Tertiary related with the services.
 Quaternary concerned with the Research & Knowledge intensive
activities.

The purpose of Stage theory is that societies and economics move through
these stages for their development from agriculture to manufacture to
services to knowledge-based form of development.

ii. Cycle Theories

These theories are related with the process of economic evolution. Cycle
theories focus on the stages if development through product and profit life
cycle. Product life cycle show different location pattern from the conception
of new product with an idea of innovation product life cycle theory focuses
on the product’s profit stages are associated with the product life cycle
theory.

12
iii. Wave theories, Technical Change& Innovative:
Wave theories are focus on the technical change and innovations. These
technical changes and innovation are related with the four phases of
business cycle i.e. prosperity, recession, depression and recovery. Each
wave in the business cycle is associated with significant technological
changes with other innovations in the production, distribution and
organization and ultimately spread through the economy.

SUMMARY

In this unit introduction and concept of geography has been discussed.

Commercial geography is associated with the flows of capital information,
commodities trade, and exchange of goods and services over long distances. The
exchange of goods and services at specific markets, are core components of the
economy. This chapter also described the economic geography, Economic
Geography is the study of economic activities across the world like the location of
industries and international trade and branches of geography, human geography
and physical geography in detail. Further the scope and importance of economic
and commercial geography has been explained. In the final section of the unit the
theories of Economic Geography have been discussed in detail.

13
 SELF-ASSESSMENT QUESTIONS

1. Define the term Geography? Also explain the branches of Geography.

2. What is meant by geography, explain its scope?
3. Explain the scope of economic and Commercial Geography in detail?
4. What are the key concepts of economic Geography? Discuss.
5. Describe the approaches used in economic Geography?
6. What is economic Geography? Also discuss theories of economic
Geography.
7. Discuss Neo-classical Approach, location theory and new Economic
Geography.

14
Unit–2

WORLD COMMERCIAL
GEOGRAPHY

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin
15
 CONTENTS

Page #
Introduction ....................................................................................................... 17

Objectives ......................................................................................................... 17

2.1 Continents of the World ........................................................................... 18

2.1.1 Asia ................................................................................................. 18
2.1.2 Africa .............................................................................................. 19
2.1.3 North America ................................................................................ 20
2.1.4 South America ................................................................................ 20
2.1.5 Antarctica ........................................................................................ 21
2.1.6 Europe ............................................................................................. 21
2.1.7 Australia/Oceania ............................................................................ 21

2.2 World trade routes.................................................................................... 22

2.3 Modern Routes ........................................................................................ 24

2.4 Major sea Ports of the World ................................................................... 25

2.5 Resource and their Categorization ........................................................... 27

2.6 World Major Economies .......................................................................... 32

Summary ........................................................................................................... 37

Self-Assessment Questions .............................................................................. 38

16
 INTRODUCTION

This unit will introduce the continents of the world. The world economy is
characterized by the strong interdependence among market which connects
countries together. In the first section of unit the seven continents, its location and
climate will be explained. After this, the world trade routes that are used to
exchange multiples commodities for the economic activities will also be
elaborated to identify the mechanism of trade among different countries. The
concept of resource and its categorization will be explained in detail. World major
economies will be discussed to explain the industrial progress of different
countries and their major products which they export to other countries.

OBJECTIVES

After studying this unit, your will be able to:

1. to introduce the continents of the world and their location.
2. to explain the major resources and their categorization.
3. to highlight the world trade routes.
4. to elaborate major seaports of the world.
5. to list down the global manufacturing centers.

17
2.1 CONTINENTS OF THE WORLD
The term continent is used to differentiate between the various large areas of the
Earth into which all the land surface of the earth is divided. So, continent is a
large, continuous area of land on Earth. All continents together constitute less
than one third of the Earth’s surface and about two third of the Earth’s surface is
covered by water. Two third of the continental land mass is located in the
northern hemisphere (the upper half of the globe, north of the equator). The world
is divided into seven continents which are given below:
2.1.1 Asia
2.1.2 Africa
2.1.3 North America
2.1.4 South America
2.1.5 Antarctica
2.1.6 Europe
2.1.7 Australia

2.1.1 Asia
Asia is the world’s largest continent having area 43,810,582 kilometer square
covering approximately 30% of the Earth’s land and 8.66% of the Earth’s surface.
Ural Mountains are on the west side, the Arctic Ocean to the North, the Pacific
Ocean to the East and the Indian Ocean to the South. The longest river in Asia and
the third longest in the world is the Yangtze (6211km) which flow through China.

The largest desert in Asia is the Gobi desert measuring 281,800 kilometer square.
The highest point in the world is Mount Everest(8848m) situated in the Tibetan
region of the Himalayas. There are 53 countries in Asia including Russia and
Turkey lie in both Europe and Asia and Taiwan which is technically a part of
China. Asia is the most populated continent containing 60% of the world’s
population. The population of Asia is growing with the growth rate of
approximately 2%. The total population of Asia is approximately
4,629,000,000(2005). Asia is broadly divided into Six regions i.e. Northern Asia,
Eastern Asia, Central Asia, Western Asia, Southern Asia and South East Asia.

Regions and their Countries

i. Eastern Asia
China, Hong Kong, Macao, Tibet, Japan, North Korea, South Korea,
Mongolia and Taiwan

ii. Northern Asia

Russian federation
18
iii. Central Asia
Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Afghanistan.

iv. Western Asia

Armenia, Azerbaijan, Bahrain, Cyprus, Georgia, Iraq, Israel, Jordon,
Kuwait, Lebanon, Oman, Palestine territories, Qatar, Saudi Arabia, Syria,
Turkey, United Arab Emirates and Yemen.

v. Southern Asia
Afghanistan, Bangladesh, Bhutan, India, Malaysia, Sri Lanka, Nepal and
Pakistan

vi. South East Asia

Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar,
Philippines, Singapore, Thailand, East Timor and Vietnam.

2.1.2 Africa
Africa is the world’s second largest continent having area 30,065,000 square
kilometer. It covers about 6% of the Earth’s surface and 20% of the Earth’s land.
Africa continent is covered by the Atlantic Ocean to the West, the Indian Ocean
to the East and the Mediterranean Sea to the North East and separate Africa from
Europe. The world’s largest desert, the Sahara, measuring 9000,000 square
kilometer cover much of North Africa. The Atlas mountain range lies in the North
West of Africa and the highest mountain Kilimanjaro 5895m is in Tanzania.
There are 54 countries in the continent of Africa. Africa continent is divided into
five regions such as Northern Africa, Western Africa, Eastern Africa, Central
Africa, Southern Africa and Indian Ocean Islands. The population of Africa is
approximately 1,330,780,233(2020). Its population is growing with a growth rate
of 3% per annum. The desert regions are least populated and the regions where
weather conditions are suitable having more population.

Regions and their Countries

i. Northern Africa
Algeria, Egypt, Libya, Morocco, Sudan, Tunisia.

ii. Eastern Africa

Burundi, Comoros, Djibouti, Ethiopia, Kenya, Madagascar, Malawi,
Mauritius, Mayotte, Mozambique, Reunion, Rwanda, Seychelles, Somalia,
Tanzania, Uganda, Zambia and Zimbabwe.

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iii. Central Africa
Angola, Cameron, Central African Republic, Chad, Democratic Republic of
the Congo, Equatorial Guinea, Gabon and Sao Tome and principle.

iv. Western Africa

Benin, Burkina Faso, Cape Verde, Ivory coast, Gambia, Ghana, Guinea,
Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Saint Helena,
Senegal, Sierra Leone and Togo.

v. Southern Africa
Botswana, Lesotho, Namibia, South Africa and Swaziland.

2.1.3 North America

North America is the world’s third largest continent. It covers area of 24,474,000
square kilometers. It is covered by the Atlantic Ocean of the East, the Arctic
Ocean to the North and the Pacific Ocean to the West. The highest mountains of
this continent are Alaska (6194) and the longest river of this continent is
Mississippi (3765km). There are 38 countries that lie in this continent. North
America is the fourth most populated continent with a total population of
368,187,260(2020) which is 5.5%of the world’s population. North America can
be broadly divided into the six regions i.e. Greenland, Canada, United States,
Mexico, Central America and Caribbean. There are 23 countries in this continent;
Canada and USA comprise 80% of the total land.

Countries
Anguilla, Antigua and Barbuda, Barbados, Belize, Canada, USA, Mexico,
Guatemala, Cuba, Dominican Republic, Haiti, Honduras Costarica, Panama etc.

2.1.4 South America

South America is the fourth largest world’s continent. The area of this continent
is about 17, 84,000 square kilometers. South America is the fifth most populated
continent with a total population of 429,705,655(2020). Brazil is by far the most
populous South American country, with more than half of the continent's
population. The north-west coastal region and the eastern coast of Brazil are the
most densely populated areas. There are 12 countries in this continent. The largest
river in the world, the Amazon (6400 km) flows across the top of the continent.
i. Countries in South America
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay,
Peru, Suriname, Uruguay, Venezuela.

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2.1.5 Antarctica
Antarctica is the fifth world’s largest continent. Its area is about 14 million km2. It
is covered by Southern Ocean and it lies entirely within the Antarctica circle. 98%
of the land area is permanently covered with ice. West Antarctica, on the other
hand, is a series of frozen islands stretching toward the southern tip of South
America. The ice of Antarctica is not a smooth sheet but a continuously changing
expanse. Glaciers inch across the continent, cracking and breaking the ice. East
Antarctica makes up two thirds of the continent, and is about the size of Australia.
There are no countries in Antarctica but have various regions. Antarctica is nearly
twice the size of Australia. Antarctica, on average, is the coldest, driest, and
windiest continent. There are a number of rivers and lakes in Antarctica. The
continent is divided into two regions, known as East and West Antarctica.

2.1.6 Europe
Europe is the world’s second smallest continent. Its area is about 10,180,000
km2.it covers by Atlantic Ocean to the west, the Arctic Ocean to the North, and
the Mediterranean Sea to the south and Asia to the East. Europe is the third most
populated continent with a total population of around 747,504,293(2020) about
11% of the world’s population. Southern England, Western Germany, the
Netherlands and North Italy are the most populated areas. There are 50 countries
in Europe. Europe can be broadly divided into three regions; Western Europe,
Eastern Europe and central Europe.

Regions and their Countries

i. Central Europe
Austria, Croatia, Czech Republic, Germany, Hungary, Liechtenstein,
Poland, Slovakia, Switzerland and Slovenia.

ii. Eastern Europe

Albania, Bosnia and Herzegovina, Bulgaria, Greece, Macedonia,
Montenegro, Romania, Serbia, Turkey and Kosovo.

iii. Western Europe

Belgium, France, Ireland, United Kingdom, Luxembourg, Monaco and
Netherlands, Portugal, Denmark, Norway

2.1.7 Australia/Oceonia
Australia is the smallest of the world's continents. Its area is about 7,686,850 km 2.
The population of this continent is approximately 42,677,813(2020). It is
surrounded by the Indian and Pacific oceans. It is the flattest continent, with the
oldest and least fertile soils. Australia is the driest inhabited continent; its annual
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rainfall averaged over continental area is less than 500 mm. The continent
primarily sits on the Indo-Australian plate. Because of its central location on its
tectonic plate, Australia doesn’t have any active volcanic region, the only
continent with this distinction. Best known animals are the Kangaroo, Koala,
Echidna, Dingo, Platypus, Wallaby and Wombat. Temperature remains constant
over a long period of time.
i. Countries:
Australia, New Zealand, Papua New Guinea

2.2 WORLD TRADE ROUTES

A trade route is a route, often covering long distances i.e. an area or land or sea
etc. that is used by traders for trading their goods and services. For Economic
activities, traders used these routes in order to exchange multiple commodities. A
trade route can be established between any multiple points that are linked by
trade, whatever the distance between them and these routes can exist within a
small area or specific region or over large distances between a numbers of
regions. No matter what type of commodities they transported, trade routes played
a vital role. For the formation of good trade relations around the globe and were
often sources for the exchange of not only goods, but of people and ideas. All
trade routes exchanged multiple goods, the largest and most famous trade routes
became known for the transportation of specific precious commodities such as
gold, salt and silk. For the development of human history, there must be the
connection between trade routes and the development of cultures and political
entities. So the trade routes which are created by the traders are very important to
bring political and social change.

2.2.1 Land Routes

Land routes are the routes through which trade activities among different parts of
country exist through land roads. Following are the land routes that are given
below:

2.2.1.1 Silk Road

The Silk Road was a network of trade routes, which linked the regions of the
ancient world in commerce and it also links the ancient civilization of china and
the Roman Empire. While many different kinds of merchandise traveled along the
Silk Road, the name comes from the popularity of Chinese silk with the West
especially with Rome. Silk was traded from china to the Roman Empire which
starts in the first century in exchange for wool, silver and gold coming from
Europe. The greatest value of the Silk Road was the exchange of culture. Art,
religion, philosophy, technology, language, science, architecture and every other
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element of civilization was exchanged through the Silk Road along with the
commercial goods the merchants carried from country to country.

2.2.1.2 Trans-Saharan Route

The Trans-Saharan route from North Africa to West Africa was made up of
number of routes, providing a crisscross of trading links across the desert. The
Sahara once had a very different environment. Thousands of camels would carry
goods across the Sahara. Gold, slaves, salt and clothes were the most important
commodities on this route. This route also encouraged the development of state
building and monetary system. This trade route was instrumental in spread of
Islam.

2.2.1.3 Amber Road

Amber has been traded since 3000 BCE. Romans developed Amber road linking
the Baltic with the rest of Europe. They valued stones for both decorative and
medicinal purposes. Large deposits of Amber are found under the Baltic Sea.
Today traces of the old Amber Road can be found in Poland, where one of the
major routes is known as the “Amber Highway”.

2.2.1.4 Grand Trunk Road

The grand trunk road is one of Asian’s great historical road and a major route
connecting much of the Indian subcontinent. It runs through parts of Bangladesh,
India, Pakistan and Afghanistan. The objective of this route is to facilitate trade
activities. It was built by Sher shah Suri. The road continues to Pakistan near
Peshawar through Khyber Pass from Afghanistan.

2.2.2 Sea Routes

A sea route is a regularly used route for vessels on oceans and large lakes to carry
the trade activities among different countries of the world. Following are the sea
routes of the world:

2.2.2.1 Mediterranean Suez Asiatic Route

It links Europe to the Far East. This route transport goods and services from the
Middle East and the raw material from the Asian countries. Due to wars in the
Middle East the trade activities through this route are disturbed especially through
Suez Canal. However, trade in the Mediterranean Sea still flourishes with ports
like Tel-aviv, Algiers and Venice.

2.2.2.2 North Atlantic Route

North Atlantic Route lies in the area which is considered the busiest in the world.
It links Europe with the North America. On both sides of North Atlantic are areas

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of very dense rich population and with various industrial activities. It has some of
the world’s largest sea and one of the European sides. The major ports of this
route include Rotterdam, Amsterdam, London and Lisbon. These are outlets for
the rich agricultural, commercial and industrial areas of Europe. Large quantities
of manufactured goods are traded to North America.

2.2.2.3 West-Indies Route/Panama Route.

It is through Panama Canal. It has become the great way to the pacific. It has
facilities of the trade activities like minerals, food stuffs and manufactured goods
between the East west coastal areas of USA. It is also an important trade route for
China, Japan and south-East Asian countries with Western Europe.

2.2.4 The Rhine Water Way

The Rhine is Europe’s most important water way. It flows through Switzerland
and Germany. The Rhine River is linked to Rhone River and the Mediterranean
by the Rhone river canal. It passes through the most important industrialized areas
in the world i.e. Rahur industrial region and enter the busiest sea in the world i.e.
North Sea. The trade activities on the River Rhine include machinery, steel pipes,
diesel engines, watches, food stuffs, oil, and coal and iron ore.

2.3 MODERN ROUTES

With the development of means of transport and free trade agreements, modern
routes are introduced. Newer means of transport led to the establishment of new
routes, and countries opened up borders to allow trade activities of goods as per
prevailing free trade agreement. Some trading routes were reopened during the
modern times.

2.3.1 Wagon Way Route

Wagon way consists of the horses, equipment and tracks used for hauling wagons.
The advantage of using wagon way was that far bigger loads could be transported
with the same power. The settlers in the U.S used this wagon train for westward
emigration during the 18th and 19th centuries. Wagon route were crossing rivers,
mountains and hostile Native Americans. Wagon frightening was also essentials
for American growth until it was replaced by the railroad and the truck.

2.3.2 Railway Route

Through this route trade are benefited as the workers and the lower classes had
the ability to travel to other towns frequently. The British constructed a vast
railway network in India but it was considered to serve a strategic purpose in

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addition to the commercial purpose. These remain the best means of transporting
large volumes of commodities such as coal grain, chemicals and ore over long
distances. The development of containerization has made the railroads more
effective in handling finished goods at relatively high speeds.

2.3.3 Air Routes

Air transport has become an essential part of modern world. People have come to
use air transport both for long and middle distances. This mode of transportation
links national, international and global economies that are beneficial to many
other industries. Express delivery through international cargo airlines touched $20
billion in 1998 and according to the world trade organization; it is expected to
triple in 2015. Air transport particularly favors light, expensive and small
products.

2.4 MAJOR SEA PORTS OF THE WORLD

An inland port is a port on a navigable lake, river (fluvial port), or canal with
access to a sea or ocean, which therefore allows a ship to sail from the ocean
inland to the port to load or unload its cargo. Port locations are selected to
optimize access to land and navigable water, for commercial demand, and for
shelter from wind and waves. Ports with deeper water are rarer, but can handle
larger ships. Since ports throughout history handled every kind of traffic, support
and storage facilities vary widely, may extend for miles, and dominate the local
economy. Following are the sea ports of the world.

2.4.1 Port of Shanghai

The Port of Shanghai is the biggest port in the world based on cargo throughput.
The Chinese port handled 744 million tons of cargo in 2012, including 32.5
million twenty-foot equivalent units (TEUs) of containers. The port is located at
the mouth of the Yangtze River covering an area of 3,619km². Shanghai
International Port Group (SIPG) owns the port facility. It serves more than 2,000
container ships on a monthly basis and accounts for a quarter of China's total
foreign trade.

2.4.1.1 Port of New York and New Jersey

The Port of New York and New Jersey is the port district of the New York-
Newark metropolitan area, encompassing the region within approximately a 25-
mile (40 km) radius of the Statue of Liberty National Monument. The port is by
tonnage the third largest in the United States and the busiest on the East Coast.
The port is the nation's top gateway for international flights and its busiest center

25
for overall passenger and air freight flights. There are two foreign-trade zones
(FTZ) within the port. The port handled $208 billion in shipping cargo in 2011,
and 3,342,286 containers and 393,931 automobiles in 2014. It includes the system
of navigable waterways in the New York–New Jersey Harbor Estuary.

2.4.1.2 Port of Kolkata

The Port of Kolkata is a river in port in the city of Kolkata, India, located around
203 kilometers (126 mi) from the sea. It is the oldest operating port in India, and
was constructed by the British East India Company. The Port has two distinct
dock systems - Kolkata Docks at Kolkata and a deep water dock at Haldia Dock
Complex, Haldia. In the 19th century, the Kolkata Port was the premier port in
British India. From 1838 to 1917, the British used this port to ship off over half a
million Indians from all over India, mostly from the Bhojpuri Belt, Bengal, and
Tamil Nadu and take them to places across the world. After independence, the
port's importance decreased because of factors including the Partition of Bengal
(1905) and reduction in size of the port.

2.4.1.3 Porto de Santos/Port of Santos

It is located in the city of Santos. This port is the largest in Brazil and one of the
busiest in Latin America, currently serving 26 Brazilian states. The Porto de
Santos is important for the economy of the state, Santos is the most important port
of the country, and it is the one that has the highest number of problems,
especially related with the workforce. The most marketed products at this port are
sugar, soy, containerized cargo, coffee, corn, wheat, salt, citrus pulp, orange juice,
paper, automobiles and alcohol.

2.4.1.4 Port of Durban

The Port of Durban, commonly called Durban Harbour, is the 2ndlargest and
busiest shipping terminal in sub-Saharan Africa. It handles up to 31.4 million tons
of cargo each year. It is the fourth largest container terminal in the Southern
Hemisphere. Durban is the busiest port in South Africa and generates more than
60% of revenue. The distance around the port is 21 kilometers (13 miles). The
port has 58 berths which are operated by more than 20 terminal operators. The
entrance channel had a depth of 12.8 meters (42 ft) from Chart Datum, and a
width of 122 meters (400 ft) between the caissons. The port has recently been
widened.

2.4.1.5 Port of Hedland

It is the biggest part in located on the west coast of Australia, handling about 452
million fans of Cargo. It is mainly used for the expert of Iran are.

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2.4.1.6 Port of Yokohama
The Port of Yokohama is operated by the Port and Harbor Bureau of the City of
Yokohama in Japan. It opens onto Tokyo Bay. In 2013, the Port of Yokohama
served 37,706 ships. It handled 271,276,977 tons of cargo and 2,888,220 TEU
containers. The total value of the cargo was 10,921,656 million yen. The Port of
Yokohama formally opened to foreign trade on the 2nd of June 1859. The port
grew rapidly through the Meiji and Taisho periods as a center for raw silk export
and technology import. Honmoku Pier is the port's core facility with 24 berths
including 14 container berths.

2.4.1.7 Port of Gawadar

The Gawadar Port is the deepest sea port in the world, situated on the Arabian Sea
at Gawadar in Balochistan province of Pakistan and is under the administrative
control of the Maritime Secretary of Pakistan and operational control of the China
Overseas Port Holding Company.

Gawadar's potential to be a deep water sea port was first noted in 1954, while the
city was still under Omani sovereignty. Plans for construction of the port were not
realized until 2007, when the port was inaugurated by Parvez Musharraf after four
years of construction, at a cost of $248 million.

2.5 RESOURCE AND THEIR CATEGORIZATION

A resource is a source or supply from which benefit is produced. Resources are
materials, cash, services, staff or other assets that are transformed to produce
benefit. Benefits of resource utilization may include increased wealth, satisfaction
of needs or wants, proper functioning of a system. Resources can be broadly
classified on basis upon their availability they are renewable and non-renewable
resources. Resources can also be classified as actual and potential on the basis of
level of development and use, on the basis of origin they can be classified as
biotic and abiotic. Resources have three main characteristics; utility, limited
availability and have potential for consumption.

2.5.1 Economic Resources

Economic resources are the factors used in producing goods or providing services.
They are inputs that are used to create things or help us to provide services.
Economies itself has been defined as the study of how society manages its scarce
resources. Economic resources can be divided into human resources such as labor
and non-human resources include land and capital goods. Land includes all
natural resources that are viewed as both the site of production and the source of

27
raw materials. Labor or human resources consist of human effort that produces
the products and in return wages are paid to the labor. Capital consists of human
made goods or means of production that are used in the production of goods and
services, paid in interest.

2.5.1.1. Land or Natural Resources

Natural resources are the resources which are derived from the environment.
Many natural resources are compulsory for human beings to survive while some
resources are not necessary they are used for satisfying human desire. Natural
resources may be classified in different ways.

2.5.1.2 On the Basis of Origin

Resources can be classified on the basis of origin I.e. Abiotic resources and biotic
resources. Abiotic resources are the resources that comprise non-living things
e.g. land, water, air and minerals etc. Biotic resources are the resources that are
obtained from the biosphere. Forests and their products, birds and their products,
fish and other marine organisms are important examples. Resources that are
formed from fossilized organic matter are also include3d in this category.

2.5.1.3 On the Basis of Stage of Development

Resources are also categorized based on the stage of development. Potential
Resources are the resources whose entire quantity may not be known and these
are not being used at present. These resources could be used in future. The level
of technology we have at present may not be good or advanced enough to easily
utilize these resources. Actual Resources are those resources that have been
surveyed, their quantity and quality has been determined, and they are currently
being used. The development of actual resources is dependent on technology.

2.5.1.4 On the Basis of Renewability

Natural resources can be categorized on the basis of renewability. Non-Renewable
Resources are those resources whose formation is very slow. They are formed over
long geological periods and do not naturally form in the environment. Minerals and
fossil fuels are the examples of non-renewable resources. Renewable Resources
are the resources that cannot be finished. They are available continuously and their
quantity cannot be affected by human consumption. Sunlight, water air and wind
are the examples of renewable resources.

2.5.1.5 On the Basis of Distribution

On the basis of distribution natural resources can be further classified. Ubiquitous
Resources are formed everywhere e.g. air, light and water etc. Localized Resources
which are formed only in certain parts of the world e.g. copper, iron ore etc.

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2.5.2.1 Labor or human resources
Human beings provide their labor work to the organization in order to get their
benefit considered as human resources. Skills, energies, talents, abilities and
knowledge used by the labor for the production of goods and services are also
including in the human resources. Labor provides their services with best of their
knowledge and abilities in order to get maximum output and in return they get
their reward in the form of wages.

2.5.3 Capital Resources

Capital resources are the resources that are already produced durable goods and
further used for production of goods and services. Examples of capital include
buildings, machinery, railways, roads and ships. However, the capital resources
are not fully consumed, they may be depreciating in the production process.

2.5.4 Tangible or Intangible Resources

Tangible Resources are those resources which have actual physical existence
such as equipments. Intangible Resources such as corporate images, brands and
patents exist in abstraction.

2.5.5 Mineral Resources

Minerals provide the material source that is used in the industries for the
production of various commodities. A mineral is a pure inorganic substance that
occurs naturally in the earth’s crust. Minerals are valuable natural resources being
finite and non-renewable. A demand for minerals is increasing day by day as the
population increases and the consumption demands of individual increase.
Following are the types of mineral resources.
i. Iron
Iron is a mineral that our bodies need for many functions. For example, iron
is part of hemoglobin, a protein which carries oxygen from our lungs
throughout our bodies. It helps our muscles store and use oxygen. Iron is
also part of many other proteins and enzymes.

Your body needs the right amount of iron. If you have too little iron, you
may develop iron deficiency anemia. Causes of low iron levels include
blood loss, poor diet, or an inability to absorb enough iron from foods.
People at higher risk of having too little iron are young children and women
who are pregnant or have periods.
Too much iron can damage your body. Taking too many iron supplements
can cause iron poisoning. Some people have an inherited disease called
hemochromatosis. It causes too much iron to build up in the body.

29
ii. Copper
It is one of the most important and widely used metals of modern society.
Pure copper is soft and malleable. Its surface has a reddish-orange color. It
is used as a conductor of heat and electricity. The largest use of copper is in
the electrical industry where copper wires and cables are produced. Copper
is used as a conductor of heat and electricity, as a building material, and as a
constituent of various metal alloys, such as sterling silver used in jewelry
and coins and constantan used in strain gauges and thermocouples for
temperature measurement. Copper reserves are found in South Central
Africa, China, Western USA, Kazakhstan and Canada.

iii. Gold
Gold is the soft, dense and malleable mineral with a bright yellow color. It is
one of the least reactive chemical elements. It is highly prized by people
because of its attractive color and its many special properties. In its purest
form, it is a bright, slightly reddish yellow, dense, soft, malleable and ductile
metal. Gold is a good conductor of heat and electricity. Whereas most metals
are gray or silvery white, gold is slightly reddish-yellow. As a precious metal
gold has been used for coinage, jewelry, and other arts throughout recorded
history. Trace amount of gold are found almost everywhere, but large deposits
are found in only a few locations. Gold producing countries are South Africa,
Canada, Russia, USA, Australia and India.

iv. Silver
Silver is one of the so called precious metals because of its brilliant white
color, malleability and ductility. Silver used in the manufacturing of coins,
ornaments and jewelry. Unlike gold, silver are present in many naturally
occurring materials. Silver is often found in conjunction with these or
alloyed with other metals such as gold, it usually must be further extracted
through amalgamation or electrolysis. Silver mining has been undertaken
since early times. Silver is found generally in lead ores, copper ores and
cobalt ores and is also frequently associated with gold in nature. Silver is
found in Mexico, USA, Canada and Peru.

v. Coal
Coal is a brownish-black sedimentary rock that contains elements of carbon.
Coal is composed primarily of carbon, along with variable quantities of
other elements such as hydrogen, sulfur, oxygen, and nitrogen. Coal also
contains same percentage of solid, liquid and gaseous hydrocarbons. It is
divided into different groups on the basis of properties, such as anthracite,
bituminous, lignite and peat. A fossil fuel, coal forms when dead plant

30
 matter is converted into peat, which in turn is converted into lignite, then
sub-bituminous coal, after that bituminous coal it lastly form anthracite.
This involves biological and geological processes that take place over time.
It is referred as a fossil fuel. Coal producing countries are China, Australia,
Russia, South Africa and Germany.

vi. Oil / Petroleum

Oil is a clear, colorless & odorless liquid. Mineral oil is a liquid by
producing of refining crude oil to make gasoline and other petroleum
products. Oils have a high carbon and hydrogen content and are usually
flammable and surface active. They are used for food fuel (e.g., heating oil),
medical purposes (e.g., mineral oil), lubrication (e.g. motor oil), and the
manufacture of many types of paints, plastics, and other materials. Oil
producing countries are Canada, Iran, Iraq, Kuwait, United Arab Emirates,
and Russia etc.

2.5.6 Agricultural Resources:

i. Wheat
Wheat is a food crop. It is the crop of temperate region. It is the most widely
grown crops in the world and provides 20% of the daily proteins and also
food calories. Wheat is grown on more land area than any other food crop.
After rice, wheat is the second most important food crops in the developing
world. Today, wheat is grown on more land area than any other commercial
crop and continues to be the most important food grain source for humans.
Wheat is the primary food staple in North Africa and the Middle East, and is
growing in Asia. All countries share the need to increase wheat yield, as
well as to improve input use efficiency in order to increase the wheat
production.

ii. Rice
It is the crop of tropical region. It is the plant of water. It is the most widely
consumed staple food for a large part of the world's human population,
especially in Asia. Cultivation of Rice is originated is China over 4000 years
ago. Rice is an essential agricultural product in many countries. In poor and
developing countries, rice is used as a staple commodity due to its low costs
and high caloric value. Rice was first cultivated commercially in the United
States in South Carolina during the 17th century. Rice cultivation is well-
suited to countries and regions with low labor costs and high rainfall, as it is
labor-intensive to cultivate and requires ample water. Rice consumption is
increasing day by day in many countries due to growth in population and
people’s demand.

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iii. Cotton
Cotton is a soft, fluffy staple fiber that grows in a protective case, around the
seeds of the cotton plants. The fiber is almost pure cellulose. Under natural
conditions, the cotton bolls will increase the dispersal of the seeds.
Successful cultivation of cotton requires a long period, plenty of sunshine,
and a moderate rainfall. Cotton plant produces fibers which are used to
make clothes and other products like towels, carpets or sheets. Cotton is a
subtropical plant that grows in many warm areas of the world. China is the
world's largest producer of cotton, but most of this is consumed
domestically. Most important cotton-growing countries are the USA, China,
India, Pakistan and Australia.

iv. Sugarcane
Sugarcane is a crop that is grown in many countries. It is mainly grown for
sugar production. Most of the World’s sugarcane is grown in subtropical
and tropical areas. The world demand for sugar is the primary driver of
sugarcane agriculture. Sugarcane is also used in industries for the
production of essential items like chip board, paper, chemicals, plastics,
paints, synthetic fiber, insecticides and detergents. In some regions, people
use sugarcane reeds to make pens, mats, screens, and thatch. Sugarcane
producing countries are Brazil, China, India, Thailand, Pakistan and
Mexico.

v. Maize
Maize is cereal plant of the grass family and it is edible grain. Maize has
become a staple food in many parts of the world, with total production
surpassing that of wheat or rice. Maize was first domesticated by native
peoples in Mexico about 10000 years ago. The domesticated crop originated
in the Americans and is one the most widely distributed of the world’s food
crops. However, not all of this maize is consumed directly by humans. Some
of the maize production is used for corn ethanol, animal feed and other maize
products, such as corn starch and corn syrup. Crops are used as livestock feed,
as human food, as biofuel and as raw material in industry. The Maize
producing countries are USA, China, Brazil, India, Argentina etc.

2.6 WORLD MAJOR ECONOMIES

Global manufacturing centers are the centers that are involved in manufacturing
processes. Manufacturing industries where raw material transformed into finished
goods on a large scale. Such finished goods may be sold within the country or
export to other countries. Finished goods may also be sold to other manufacturers
32
for the production of other more complex products such as aircrafts, household
appliances, furniture, sports equipment or automobiles. Developed countries
regulate manufacturing activity with labor laws and environmental laws.

2.6.1 Economy of Japan

The economy of Japan is the third largest in the world by nominal GDP and the
fourth-largest by purchasing power parity (PPP) and is the world’s second largest
developed economy. The Japanese economy faces considerable challenges posed
by a declining population. Japan is the world's third largest automobile
manufacturing country and has the largest electronics good industry and is
considered among the world's most innovative countries. The petrochemical
industry experienced moderate growth in the late 1980s. The highest growth came
in the production of plastics, polystyrene and polypropylene prices for
petrochemicals remained high because in the newly developing countries of Asia
the demand is increased.

In the long term, the Japanese petrochemical Industry faces intensifying

competition by other Asian countries to catch up with Japan. The motor vehicle
industry is one of the most successful industries in Japan. Japan is a six of the top
of the largest vehicle manufacturer in the world. E.g. it is home to multinational
companies such as Toyota, Honda, Suzuki and Mazda. The textile industry
showed a strong revival in the late 1980s because of increased domestic demand
from the construction, automobiles, housing and civil engineering industries for
various synthetic fibers. The fields in which Japan enjoys relatively high
technological development include semiconductor manufacturing, optical fibers,
video discs and videotext, facsimile and copy machines, industrial robots and
fermentation processes.
i. Japan’s Major Industries
Automobiles, consumer electronics, computers semiconductors, iron and
steel are major industries of Japan. Other key industries in Japan are mining,
petrochemicals, pharmaceuticals, bio industry, shipbuilding, aerospace,
textiles and processed foods.

ii. Major industrial Cities of Japan

Tokyo, Osaka, Nagoya, Southwestern part of Honshu, Northern Shikoku,
Northern part of Kyushu and Fukuoka.

2.6.2 Economy of China

China is the world’s second largest economy by nominal GDP and the world
largest economy by purchasing power parity. China is the world’s largest
manufacturer, sometimes referred as the “the world’s factory”. In recent years

33
China has been an attractive destination for manufacturing due to its low labor
costs, skilled workforce and good infrastructure. But China’s manufacturing
profile is changing with developed regions moving downward. China is the
world's largest producer of rice and other agriculture produce include wheat, corn
(maize), tobacco, soybeans, potatoes, sorghum, peanuts, tea, millet, barley,
oilseed, pork, and fish.
i. Major industries of China
Mining and more processing, iron and steel, aluminum, coal, machinery,
ornaments, textiles, petroleum, cement, chemical, fertilizers, food
processing, automobiles and other transportation equipment including rail
cars, ships, and aircrafts, consumer products including footwear, toys and
electronics, telecommunication and information technology. China’s cotton
textile industry is the largest in the world producing yarns, cloths, woolen
piece goods, knitting wools, silk, jute bags and synthetic fibers. High
technology industries produce high speed computers 600 types’
semiconductors, specialized electronic measuring instruments and
telecommunication equipment.

ii. Major industrial cities of China

Shanghai, Beijing, Tianjin, Guangzhou and Shenzhen.

2.6.3 Economy of Germany

Germany is the largest national economy in Europe, the fourth largest by nominal
GDP in the world and fifth by purchasing power parity. The economy of Germany
is the largest manufacturing economy in Europe and it is less affected by the
financial crises. In 2016, Germany recorded the highest trade surplus in the world
worth $310 billion that makes the Germany the biggest capital exporter globally.
Germany is the manufacturer of automobiles, machinery, electrical equipment and
chemicals. It was the world’s fourth largest producer and largest exporter of
automobiles. The best known and the second largest industry in Germany is
automotive manufacturing. Almost half of all German produced automobiles are
exported to other EU members and to North America. Other important industries
are the traditional German industries of steel and coal mining, both heavily
subsidized and still large employers. Aerospace is a small but growing industry,
also heavily subsidized.
i. Main industries of Germany
Machine tools, automobiles manufacturing, electrical engineering, iron,
steel, chemicals and optics are major industries of Germany. The
manufacturing in East Germany is expected to concentrate in the same
industries overtime, thus, the future German economy will retain a powerful
industrial component that will above 30% of German.

34
ii. Major industrial region
Germany, Rhine, Hamburg, Berlin and Leipzig

2.6.4 Economy of France

France has the world's 6th largest economy in the world and the 10th largest
economy by purchasing power parity. Various reform measures have been
adopted to increase the economy’s competitiveness and flexibility. France is the
world’s largest industrial producers. Manufacturing in France is serves as primary
source of export income. Manufacturing sector consist of mostly family Owned
small firms, which produce low volumes of crafted goods. France become a
leading producers of automobiles, steel, electrical equipment, and chemicals and
earned a reputation for technological innovation. Food processing is the largest
manufacturing sector in terms of employment. France is the world’s largest
producer of sugar beets, the second largest producer of wine. Other well-known
French food include meats, bread etc. French firms are known for technological
innovation in aerospace, defense, transportation and other specialized industries.
i. Major industries of France
Food products, automobiles, aircrafts, ships, trains, electrical machinery,
mechanical equipment and machine tools, chemicals, pharmaceuticals,
textiles and clothing. France produces advanced commercial and military
aircraft as well as many kinds of military hardware. A large electronics
industry in France produces telecommunication equipment, computers,
television, radios and other items. The French chemical industry produces a
diverse range of products, including industrial chemicals, plastics,
fertilizers, beauty products and pharmaceuticals. The textile industries
famous for cotton, silk and woolen goods remain important.

ii. Major Industrial Region of France

North-east industrial region that include (Dunkirk, Denain, Tourcoing,
Cambrai and Roubaix), Lorraine industrial region, the Paris Basin, Dijon
industrial region, Rhone Sone valley region and Lorraine region

2.6.5 Economy of USA

The economy of USA is the world's largest national economy in nominal terms
and second largest according to purchasing power parity (PPP). It represents 22%
of nominal GDP and 17% of gross world product (GWP). The US has abundant
natural resources, a well-developed infrastructure, and high productivity. The U.S.
is the world's third largest producer of oil and natural gas. The United States is
estimated to have a population of 323,127,513 in 2016, The US manufacturing
industries created good paying employment opportunities for workers. Due to
industrial progress, employment growth in industries such as construction,

35
finance, insurance and real estate and services industries played a significant role
in provision of employment. Manufacturing continues evolve due to factors such
as information technology and supply chain innovations.
i. Major Industries of U.S
Petrochemical, steel, automobiles, aerospace, telecommunication,
chemicals, lead electronics, food processing, consumer goods and mining
are major industries of U.S. The large portion of U.S industrial output in the
world is aircraft manufacturing. The primary export commodities were
transportation equipment, computer and electronics products, agricultural
products, machinery chemicals and food product.

2.6.6 Economy of South Korea

The economy of South Korea is the fourth largest economy in Asia and the 11th
largest in the world. South Korea is famous for its amazing rise from one of the
poorest countries in the world to a developed high-income country in just one
generation. South Korea has almost no natural resources and a problem of
overpopulation which cause continued population growth and the formation of
large internal consumers market, to stabilize its economy.

South Korea adopted export-oriented strategies and in 2014, South Korea was the
seventh largest exporter and seventh largest importer in the world. South Korea
still remains one of the fastest growing developed countries in the world
following the great recession. South Korea effective education system and the
highly motivated and educated people are responsible for rapid economic
development and research into the future. The total population in South Korea
was estimated at 50.8 million people in 2016, according to the latest census
figures.
i. Main Industries of South Korea
Major industries of South Korea include Steel, automobiles, ships,
chemicals, clothing, television sets, household appliances, computers and
semiconductor chip.

2.6.7 Economy of Holland

According to World Bank, Holland was the 18th largest economy of the world in
2012. The judicial system is independent and free of corruption, provides strong
protection of property rights. Global trade and investment is well established in
this economy and there is transparent and efficient regulatory environment.
Netherlands has discovered huge natural gas resources since 1959. The sale of
natural gas generated revenues for the country which added hundreds of billions
of Euros to the government’s budget. The Netherlands has a prosperous and open
economy which depends heavily on foreign trade. The economy is stable

36
industrial relations, low unemployment and inflation and a very big size current
account surplus. Netherlands being a small country is a big player in the world’s
trade and the global transfer of capital. Netherlands is the 66thmost populated
country in the world and it has a population of 17,000,000 (2016).

ii. Major Industries of Netherlands

Transport equipment, machinery, food and agricultural products, electronics,
footwear and clothing, pharmaceuticals, optical, technical and medical
equipment, iron, steel, live trees, plants and cut flowers.

SUMMARY
In this unit the basic concept of continents and their geographical location has
explained. The term continent is used to differentiate between the various large
areas of the earth into which all the land surface of the earth is divided. In second
section of this unit concept of resources has been explained. A resource is a
source or supply from which benefit is produced. Resources are materials, cash,
services, staff or other assets that are transformed to produce benefit.
Classification of resources according to its nature and characteristics has been
discussed in detail. In third section of the unit major world trade routes that are
used for trade activities among different countries has been elaborated. Lastly,
world major economies that explain the manufacturing of different commodities
in different countries have been discussed.

37
 SELF-ASSESSMENT QUESTIONS

1. What are the continents of the world and their location?

2. Describe the suitable physical and Nonphysical factors for the growth of
industrial development.
3. Explain the worldwide production of iron and steel industry.
4. Write a detail note on World trade routes.
5. Describe World major economies and discuss major seaports of the world.

38
Unit–3

COMMERCIAL GEOGRAPHY
OF PAKISTAN

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin
39
 CONTENTS

Page #
Introduction ...................................................................................................... 41

Objectives ......................................................................................................... 41

3.1. Introduction to Pakistan ........................................................................... 42

3.2 Demography of Pakistan ......................................................................... 42

3.3 Neighbors of Pakistan .............................................................................. 45

3.4 Physical Features of Pakistan................................................................... 58

3.5 Climate of Pakistan ................................................................................. 52

3.6 Major Industries of Pakistan .................................................................... 53

3.7 Major Economic Zones of Pakistan ......................................................... 55

Summary ........................................................................................................... 57

Self-Assessment Questions .............................................................................. 58

40
 INTRODUCTION

In the previous unit you learned about the world Commercial Geographic and in
this unit you will introduce the geography of Pakistan. In the first section of the
unit the introduction of Pakistan and its neighboring countries will be discussed in
detail. Pakistan is located in the continent of Asia. Pakistan is surrounded by land
on three sides: east, west and north and ocean in the South. The physical features
and climatic regions of Pakistan will be described. The major part of our country
consists of fertile alluvial plain which is drained by the river Indus and its
tributaries. The demography of different provinces of Pakistan and distribution of
urban and rural population will also have elaborated. Major industries of Pakistan
will also explain.

OBJECTIVES

After reading this unit, you will able;

1. to introduce the geographical location of Pakistan.
2. to discuss the neighbor countries of Pakistan.
3. to explain the physical features of Pakistan.
4. to explain the climate of different regions of Pakistan.
5. to highlight major industries of Pakistan.
6. to elaborate the major economic zones of Pakistan.

41
3.1 INTRODUCTION TO PAKISTAN
Pakistan is located in the continent of Asia. The Areas wise Pakistan is 36th
largest nation in the world with a total area of 796096 km2. Pakistan became an
independent state in 1947 after gaining its sovereignty from the United Kingdom.
Pakistan is a profound blend of landscapes varying from plains to deserts, forests,
mountains, and plateaus. It is largely a dry area drained by large streams. It is
poor in metallic minerals, but rich in several non-metallic minerals. It is an
agricultural country, but it is trying to acquire modern technology. The population
of Pakistan is 207,774,520 and the nation has a density of 256 Persons/km2. It
extends from 230 35’ N to 370 05’ N (latitude). Therefore, Pakistan records high
temperatures in summer, and winters are not very severe. Pakistan extends from
600 57’ to 770 50’ E (Longitude). Longitudinal extension is not much; therefore, it
is possible to have a one standard time for the whole country.

Pakistan is surrounded by land on three sides: east, west and north. The Arabian
Sea, which is a part of the Indian Ocean, lies to its south. Pakistan, therefore, has
full access to the ocean routes, particularly the Asian- Mediterranean route, which
connects Pakistan to Japan, china and other East Asian countries, south East Asia,
south Asia, south-western Asia, north and north-East Africa, Europe and North
America. The Arabian Sea has moderating effects of the coastal areas of Pakistan.

3.2 DEMOGRAPHY OF PAKISTAN

The population of a country and the trend of population growth determine the
number of persons to be fed, clothed, housed and employed today and tomorrow.
The population of Pakistan is growing at an explosive rate. Pakistan's estimated
population as of March, 2020 was 219.4 million people, making it the world's
fifth-most-populous country, just behind Indonesia and slightly ahead of Brazil.

During 1950–2011, Pakistan's urban population expanded over sevenfold, while

the total population increased by over fourfold. In the past, the country's
population had a relatively high growth rate that has been changed by moderate
birth rates. In 1998 Pakistan’s population was 132.4 million with a population
density of 166 person’s km2. Between 1998-2017, the average population growth
rate stood at 2.40%. Pakistan has a multicultural and multi-ethnic society and
hosts one of the largest refugee populations in the world as well as a young
population.

42
Major cities population:
Top 10 cities Census-2017 Census-1998
Karachi 14,051,521 9,339,023
Lahore 11,126,285 5,143,495
Faisalabad 3,203,846 2,008,861
Rawalpindi 2,098,231 1,409,768
Gujranwala 2,027,001 1,132,509
Peshawar 1,970,042 982,816
Multan 1,871,843 1,197,384
Hyderabad 1,732,693 1,166,894
Islamabad 1,014,825 529,180
Quetta 1,001,205 565,137

3.2.2 Provinces of Pakistan

Pakistan is divided into the following provinces
1. Baluchistan
It is one of the four provinces of Pakistan, forming the southwestern region
of the country. Its provincial capital and largest city is Quetta. Baluchistan is
situated in the southwest of Pakistan and covers an area of 347,190 square
kilometers. Baluchistan is Pakistan’s largest province by area, constituting
44% of Pakistan's total land mass. The province is bordered by Afghanistan
to the north and north-west, Iran to the south-west, Punjab and Sindh, and
Khyber Pakhtunkhwa and the federally administered Tribal Areas to the
north-east.

The main ethnic groups in the province are the Bloch people and the
Pashtun’s, who constitute 52% and 36% of the population respectively.

43
 Baluchistan’s population density is low due to the mountainous terrain and
scarcity of water. According to survey report of 2017 the population of
Baluchistan is 12,344,408. In 1981 the population was 4,332,376 and in
1998 (6,565,885).

2. Punjab
It is Pakistan's second largest province by area, after Baluchistan, and its
most populous province. It occupies 25.8% of the total landmass of
Pakistan. Nearly 53% of Pakistan's population lives in the Punjab. The
population of Punjab in 1981 was 47,292,441, in 1998 (73,621,290) and
according to census 2017 the population of Punjab is 110,012,442. On the
east, it has border with India.

Punjab province is bordered by Sindh to the south, the province of

Baluchistan to the southwest, the province of Khyber Pakhtunkhwa to the
west, and the Islamabad Capital Territory and Azad Kashmir in the north.
The capital and largest city is Lahore which was the historical capital of the
wider Punjab region. Other important cities include Faisalabad, Rawalpindi,
Gujranwala, Sargodha, Multan, Sialkot, Bahawalpur, Gujarat, Sheikhupura,
Jhelum and Sahiwal.

3. Sindh
It is one of the four provinces of Pakistan, in the southeast of the country. It
occupies an area of 140,915 square kilometers. Sindh is the third largest
province of Pakistan by area and second largest province by population after
Punjab. According to census-2017 the population of Sindh is 47,886,051. In
1981 the population was 10,028,666 and in 1998 (29,991,161).

Sindh is bordered by Baluchistan province to the west, and Punjab province

to the north. Sindh also borders the Indian states of Gujarat and Rajasthan to
the east, and Arabian Sea to the south. Sindh has Pakistan's second largest
economy with Karachi being its capital that hosts the headquarters of several
multinational banks. Sindh is bounded by the Thar Desert to the east, the
Kirthar Mountains to the west and the Arabian Sea in the south.

4. Khyber Pakhtunkhwa
It is one of the four administrative provinces of Pakistan, located in the
northwestern region of the country along the international border with
Afghanistan. It covers an area of 47,521 km2. According to census report of
2017 the population of KPK is 30,523,371. The population of KPK in 1981
was 11,061,328 and in 1998 it was17, 743,645.

44
 Khyber Pakhtunkhwa's provincial capital and largest city is Peshawar, with
Mardan being the second-largest. It shares borders with the Afghanistan to
the west; Gilgit–Baltistan to the northeast; Azad Kashmir, Islamabad and
Punjab to the east and southeast. FATA (Federally Administrated Tribal
Areas) with a population of 5,001,676 (2017) is now a part of KPK, which
was officially merged with the Khyber – Pakhtunkhwa on 31 May, 2018 by
the 25th Amendment of the constitution of Pakistan.

3.2.3 Administrative Units

Pakistan administrative units consist of:
i. Azad Jammu & Kashmir
Azad Jammu and Kashmir abbreviated as AJK is a nominally self-
governing administered by Pakistan. Azad Kashmir is part of the greater
Kashmir region, which is the subject of a long-running conflict between
Pakistan and India. The territory lies west of the Indian-administered state of
Jammu and Kashmir. It was previously part of the state of Jammu and
Kashmir which was separated by the Line of Control as a result of the first
Kashmir war fought between India and Pakistan. Azad Kashmir is one-sixth
of the size of Gilgit-Baltistan. Azad Kashmir has a total area of 13,297
square kilometers and a total population of 4,045,366 according 2017
census.

ii. Gilgit-Baltistan: Gilgit-Baltistanis formally known as the

Northern Areas. It is the northernmost administrative territory in Pakistan. It
borders Azad Kashmir to the south, the province of Khyber Pakhtunkhwa to
the west, the Wakhan Corridor of Afghanistan to the north, the Xinjiang
region of China, to the east and northeast, and the Indian-administered state
of Jammu and Kashmir to the southeast. The territory of present-day Gilgit-
Baltistan became a separate administrative unit in 1970 under the name
"Northern Areas". Gilgit-Baltistan covers an area of over 72,971 km² with a
population of 1,900,000 (2017).

3.3 NEIGHBORS OF PAKISTAN

Pakistan is situated in the South Asia, and is positioned in both the eastern and
northern hemispheres. It shares its borders with the Iran, Afghanistan, India and
China. Following are the interesting facts about the Neighbors of Pakistan include
India, china, Afghanistan and Iran.

45
3.3.1 India
India lies to its east. The Radcliffe Line became the official border between Pakistan
and India. Pakistan has a long border with India, which is approximately 1610 km.
When discussing Indo-Pak border, Wagah is an important place for both countries. It
is the only road border crossing between India and Pakistan, and lies on the Grand
Trunk Road between the cities of Amritsar and Lahore. Wagah is also famous for 'the
lowering of the flags' ceremony which is held there every evening, and is witnessed
by a large crowd from both the nations. Wagah is actually a village from which the
Radcliffe line was drawn separating India and Pakistan.

3.3.2 China
The border between Pakistan and China is nearly 523 kilometers long and is situated
in the northeast of Pakistan China lies to the North of Pakistan. Several agreements
took place between 1961 and 1965 in which the borderline was determined between
the two countries. The famous agreement called the Sino-Pakistan Agreement, or the
Sino-Pakistan Frontier Agreement was passed in 1963 between Pakistan and China,
according to which both countries agreed on the border between them.

46
 Lofty snow-capped mountains lie between the two countries. The Karakorum
Highway also known as the Eighth Wonder of the World, lies on the border
between Pakistan and China links the two countries via the Khunjerab Pass. It
connects Sinkiang Uighur of China and Gilgit–Baltistan of Pakistan and is one of
the highest paved international roads in the world.

3.3.3 Afghanistan
Afghanistan is located on the North-western and western border of Pakistan. The
border between Pakistan and Afghanistan formally known as the Durand Line is
located on the west of Pakistan. The Durand Line is named after Sir Mortimer
Durand, who was the foreign secretary of the British India.

There are two important roads that link Afghanistan with Pakistan. One links
Peshawar (Pakistan) with Kabul (Afghanistan) via the Khyber Pass. There is a
proposal to extend the railway from Chaman (Pakistan) to Kandahar (Afghanistan).
Afghanistan is landlocked; therefore, a large part of its trade passes through Pakistan.
With Afghanistan Pakistan has the longest boundary, which is 2252 km.

3.4.4 Iran
Iran lies to the south-west of Pakistan. The border between Pakistan and Iran is
located on the west side, and is known as the Pakistan-Iran Barrier. It is 909
kilometers long and a 700 km concrete wall that is, three feet wide and 10 feet
high has been built to stop the flow of illegal border crossings.

There is a railway link between Pakistan and Iran as well. The railway runs from
Quetta via Dalbandin and Nok Kundi to Iran. Kuh-i-Taftan is the border railway
station in Pakistan and Iran. A road runs parallel to the railways. There is another
good road link between the two countries, which connects southern Balochistan
through Turbat and Mand with Iran. A large trade exists between Pakistan and Iran.

3.3.5 Other neighbors of Pakistan

Other neighbors of Pakistan include Turkmenistan, Uzbekistan, Tajikistan and
Kyrgyzstan. All these countries are landlocked, but they could take advantage of
port facilities of Pakistan. These countries have rich resources of oil, gas and
other minerals. Already there is a proposal to lay down an oil pipeline between
Turkmenistan and Pakistan. Pakistan is located to close to the oil-rich countries
bordering the Gulf, Oman, United Arab Emirates, Qatar, Bahrain, Saudi Arabia,
Kuwait, Iraq and Iran.

47
3.4 PHYSICAL FEATURES OF PAKISTAN
The major part of our country consists of lofty mountains on the north and west, it
has the world fertile alluvial plain which is drained by the river Indus and its
tributaries. It has plateaus and few deserts also and thus Pakistan can be divided
into a number of physical regions which are given below:

3.4.1. The North Eastern Mountains

The highest mountain of the world known as “The Himalayas and Karakurram
comprising of a series of ranges which is situated in the north-east of our country.
The Himalayas stretches like a bow in the north of Indo-Pak sub-continent having
a length of about 1500km. The part of this mountain which came into our share,
consists of four parallel ranges. With beautiful valleys. The slope of these goes
decreasing from the north to south. Thus according to their altitudes, these ranges
can be sub-divided as:

3.4.1.1 The Siwalik Range

These are line of low altitude hills, situated adjacent to plain areas of Hazera
district in KPK and Attock, Rawalpindi, Jhelum, Gujrat and Sialkot districts in
Punjab. Here these hills have a height of between 3000 and 4000 feet from sea
level.

3.4.1.2 The Pir Panjal Range

Pir Panjal range is one of the famous ranges that lie in these areas, it has an
average altitude of 14000 to 15000 feet; most of the peaks remain snow covered
during winter. These are also covered with natural vegetation; The thiacests
forests of Pakistan like here. Forests are also seen at some places.

3.4.1.2 The Central or Great Himalayas

The average height of these ranges is 20,000 feet. These mountains lie in between
the Pir Panjal range and Karakoram Range and most of the peak remains snow-
covered throughout the year. The highest peak of this range known as Nanga
Parbat lies in Kashmir with 26,660 feet height. The beautiful valley of Kashmir
lies between the Pir Panjal range and the great Himalayas.

3.4.1.3 The Karakoram Range

The famous Karakorum Range lies to the north of central Himalayas in northern
Kashmir and Gilgit area. These ranges have an average height of more than
20,000 above sea level. The peaks having a high altitude remain snow covered
throughout the year. The north eastern mountains of our country are quite high

48
and it is difficult to cross them. The highest-Peak of these ranges is K-2 with
2,825/feet height which is the 2nd highest peak of the world offer Mount Everest.

3.4.1.4 The North Western Mountains

The north western ranges of our country are also known as western branches of the
Himalayas Mountains. These mountains consist of several parallel ranges and are
lower in altitude than the north eastern mountains. As most of these ranges lie
outside the course of summer monsoons coming from Arabian Sea, and so there the
rainfall is low and these are almost baren of natural vegetation. These mountains act
as a boundary between Afghanistan, Iran and Pakistan. These mountain ranges lie
north to south, having some passes in river and beds in the valleys. So the north
western mountains can be sub-divided into the following divisions:
1. The Hindu-Kush: Between the Knot Pamir and Kabul river lies the Hindu
Kush range. The average height of this range is between 10000 to 16000
feet above sea level. Most of the mountain remains snow-covered during
winter months. The highest Peak is Tirchmir with 25,230 feet height.
2. Koh-Sufaid: South of the Kabul River up to Khurram pass lies the Koh-
Sufaid range which runs east and west. These mountains have an average
height of 12000 feet are often covered with snow in winter.
3. Waziristan Hills: Between the Khurram and the Gomal rivers lies the
Waziristan hills area. These hills have low altitude. The Tochi River joins
the Kurram River from the west in North Waziristan and Gomal River
coming from Afghanistan joins Indus near Dera Ismail khan.
4. The Sulaiman Mountain: In the south of the Gomal river lays the
Sulaiman Mountain. Its highest peak is known as Takht-i-sulaiman, whose
height is 11,440 ft above sea level.
5. The Kirthar Hills: In the west of lower Indus plain lies a hilly area known
as “The Kirthar hills”. These hills are not high enough, their average height
being about 7000 feet. Hab river drains from these ranges.

3.4.3 The Indus Plain

River Indus is the largest river of our country. This river after originating from the
northern slopes of Kailash Range in Tibet (china) passing through the Himalayas
and enters in Pakistan’s territory near Gilgit. In the upper region a number of
streams join in it, but at the later stage, some of its western and eastern tributaries
make it huger and vast in volume and speed. All the plain areas of our country
have existed by the sediments brought by river Indus and its tributaries, the whole
of the Indus plain can be sub-divided into two main parts:
1. The Upper Indus Plain
From the point of junction of eastern tributaries of river Indus is known as
the upper Indus plain. It includes most of the areas of Punjab province. The
49
 upper Indus plain has a height from 600 feet to 1000 feet. The north eastern
part is comparatively higher. The five big rivers of Punjab drain this plain.
The land which lies between the two rivers is known as “Doab”. Thus the
area of Punjab plain can be divided into Bari Doab, The Rachna Doab, The
chaj Doab and the Sindh Sagar Doab. Although the north eastern areas of
Upper Indus plain receive enough amount of rainfall, but here the average
annual rainfall is less than 20 inches, which is insufficient for the
agricultural activities, So Irrigates is practical number of crops such as
wheat, rice, cotton, maize and pulses are cultivated in these areas.
2. The Lower Indus Plain: the lower Indus plain differs from the upper Indus
plain because of its structure. The lower Indus plain has been formed by the
changing course of a single great river and the deposits are of a
comparatively recent origin. The lower Indus plain situated between the left
bank of the Indus River and Thar Desert. It is a level alluvial plain. It is
more productive, but rainfall is scanty and agricultural activities cannot be
performed on western side of Indus are comparatively less fertile and most
of the areas lying north west of Indus river have been suffering from the
disease of water logging and salinity.

3.4.4 Plateaus
Plateaus includes
1. The salt range: The area of salt range begins in the east near the Jhelum and
runs south-west to the north of the river Jhelum for some distance before
turning North West to cross the Indus near kalabagh. Large quantities of
rock salt and minerals like gypsum and coal are found in this range.
2. Potwar plateau: North of salt range the area of Rawalpindi, Jhelum and
Mianwali districts are known as Potwar Plateau. These areas have also an
uneven surface. The Haro and Soan rivers pass across the potwar plateau. Due
to scanty of rainfall and uneven surface these areas are not suitable for
agricultural activities, but some of the minerals of our country such as mineral
oil, coal, iron, ore, lime-stone etc. are found from the potwar plateau.
3. The Baluchistan Plateau: this plateau lies to the west of the sulaiman and
Kirthar Mountains. Like potwar plateau, the dry hills run across the plateau
from the north east to the south west. The mountains in the north-east are
higher than those in the south and contain valuable deposit of coal, iron,
chromite and other minerals. These areas receive a small amount of rainfall
and there is scarcity of water. So due to shortage of water and uneven
surface these are not suitable for cultivation.

50
3.4.5 The Desert Areas
Deserts, in Pakistan, make up a large part of the country’s geography, especially
in the central and south-eastern regions. These areas receive very little rain fall
and have large tracts of barren wastelands, with formation of sand dunes rising
sometime to 150 m above ground level. The desert areas also support wildlife
including desert gazelles, bustards, jackals, foxes, wild cats, lizards and snakes
etc. The major deserts are:
1. Thar Desert: Thar is the world's 17th largest desert located in Pakistan.
This desert also enters the boundary of India therefore it is one of the largest
deserts of Asia. It covers an area of 175,000 square kilometers and covers
large areas of Pakistan and India. About 85% of the Thar Desert is in India,
and the remaining part in Pakistan. In Pakistan, the desert covers eastern
Sindh province and the southeastern portion of Pakistan's Punjab province.
Rainfall in the area is very low and the climate is harsh with temperatures
ranging from near freezing up to 50°C.
2. Cholistan Desert: It covers an area of about 16,000 square km and extends
into the Thar Desert of India. The south border area of Bahawalpur division
is known as Cholistan. The average annual rainfall is only 12 cm, and the
little cultivation is made possible by underground wells, drawn up by the
camels. Due to shortage of rainfall the areas of Cholistan desert have
become dry barren land. The soil of desert is fertile but due to lack of water
facilities the cultivation is not possible. Sand dunes can be seen everywhere
in the desert.
3. Thal Desert: The Thal deserts situated in Punjab, Pakistan. It is located
between the Jhelum and Sindh rivers near the Potohar Plateau. The total
length from north to south is 190 miles and a maximum breadth is 70 miles
(110 km) and minimum breadth is 20 miles. The desert covers the districts
of Bhakkar, Khushab, Mianwali, Muzaffargarh as well as Jhang, from the
left bank of the river Jhelum. Here rainfall is very low and scattered. Sand
dunes are seen everywhere. Large area of the Thal desert is irrigated by
canal of river Indus.
4. Kharan Desert: This is also called the Sandy Desert. It is located in the
Province of Balochistan. It covers an area of about 48,051 sq. km. t is
basically covered with sand dunes and scrub vegetation. Rainfall is very
limited in the desert leaving it with dry lakes. The land is not fit for
agriculture due to low irrigation. The altitude of this desert moves from
about 1000 m in the north to approximately 250 m in the southwest. The
average rainfall in the desert is about 100 mm annually. Hamun-e-Mashkhel
is the largest Saltish Seasonal dry lake of this desert.

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3.5 CLIMATE OF PAKISTAN
The atmospheric conditions at any place for a short time (a day, a week, or even
months or so) is known as weather. “The generalized picture of weather is called
climate”, thus to have a general picture of the atmospheric conditions of a place,
the average conditions of weather are obtained. Temperature, pressure, wind
rainfall, etc., are the composite parts or elements of climate. The elements depend
upon a number of factors. Climate differs from place to place and from time to
time according to the changing factors. Pakistan enjoys arid and semi-arid
conditions with hot summer and cold winter. So while studying the climate of
Pakistan it has been seen that a great difference is found in climatic conditions of
various areas of our country. Our country has three main seasons:
1. Winter season: (from November to February)
2. Summer season: (from March to June)
3. Rainy season: (from July to October)

Climatic Regions:
In Pakistan humidity is mostly low and the air is dry for the greater part of the
year. Only in coastal area there is enough amount of humidity throughout the
year. Pakistan can be divided into the following climatic regions:
1. Sub-tropical continental highland type: This region includes the mountains
in the north and west of the Indus plain. In this region winters are cold and
lengthy and often the temperature goes below the freezing point; and the
higher peaks remain snow-covered throughout the year. But here summer
remains short, cool and temperate. This region receives highest rainfall.
2. Sub-tropical continental plateau type: This region includes the north
western part of Baluchistan province. Here winters are cold, and in summer
temperature goes higher enough and often dust storms prevail. Although it
has higher altitude, but due to poor rainfall, these have turned into arid
desert. In these areas there is scarcity of rain water, but in some of the places
of these areas have the lowest rainfall.
3. Sub-tropical continental low land type: This region includes the interior
areas of Punjab and Sindh province. It has generally arid hot climate. Here
summer remains long and hot. But winters are cool and short. It has the
hottest places of the country. The rainy season begins in the middle of the
summer months. But the western part of this plain is drier than the eastern
due to very poor rainfall.
4. Sub-tropical coastal areas type: This region includes the coastal strip
around Karachi and Makran coast in Baluchistan. Here due to the influence
of the sea, the temperature remains moderate. But due to proximity of the
sea, a large amount of humidity remains in the atmosphere.
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5. Temperature:
From keeping in view temperature can be divided into the following divisions:
1. The north east and north western mountainous region: north east and
north western mountainous areas of our country are higher enough from the
sea level. Here due to a higher altitude the winters are cold and longer, and
during winter months temperature often goes down below freezing point,
there is enough snow falls, and the higher peaks remain covered with snow.
But summers remain cool and temperate.
2. The plain areas of Punjab and Sindh Provinces: the plain areas of Punjab
and Sindh are situated in the south of the mountainous region. Thus due to
low altitude and being far away from the ocean, these areas have a typically
continental type of climate. The temperature reaches the maximum during
summer months and the summer is hot and lengthy. So, after dry hot
weather, thunderstorms or dust storms appear; the thunderstorms bring
heavy rainfall and light rainfall is often followed by the dust storms. Thus,
due to rainfall a slight decrease in temperature occurs which gives
temporary relief.
3. Southern coastal areas: these areas are situated in the south of the lower
Indus plain, here due to nearness of sea; the temperature does not reach up
to extreme, the atmospheric conditions remain humid, and the heat in the
summer months is oppressive.
4. Baluchistan plateau: here the summer temperature is somewhat higher and
winter temperature is also low. As these areas are also far away from sea, so
due to high altitude temperature in winter often remains below freezing
point. Rainfall being low, these areas are dry.

3.6 MAJOR INDUSTRIES OF PAKISTAN

The Industrial Sector is the second largest individual sector of the economy
accounting for 24% of the GDP. The activity in the manufacturing sector is
comprised of large, medium and small-scale. The development of industrial sector
means more investment, employment and production. Increase in production will
increase the national income. The growth rate of industrial sector for the year
2009-2010 remained 4.9 percent %. Industrial sector contribution to GDP (Gross
Domestic Product) for the year 2009-2010 remained 18.5%. Industrial sector
earns a good amount of foreign exchange for the country which is used for
repairing national debt and for import oil and machinery important industries are
given below:
1. Textile Industry: The Textile industry in Pakistan is the largest
manufacturing industry in Pakistan. Pakistan is the 8th largest exporter of
textile commodities in Asia. Pakistan is the 4th largest producer of cotton
53
 and it contributes 5% to the global spinning capacity. The textile industry is
the second largest employment sector in Pakistan and it employs about 45%
of the total labor force in the country. In the 1950s, textile manufacturing
emerged as a central part of Pakistan's industrialization. Cotton is the largest
segment of textile production. Other fibers produced include synthetic fiber,
filament yarn, art silk, wool, and jute.
Textiles comprise 57% of Pakistan's export revenues. However, in
recent years textile exports have declined significantly. The Pakistan Textile
Exporters Association recently requested the government to take significant
measures to ensure the growth of textile exports.
2. Sports Industry: Pakistan is one of the greatest exporters of sports items.
Almost all the goods of sports are exported outside the Pakistan because
there is a very high demand of Pakistan’s goods of sports in every country
of the world. In Pakistan almost all sports related items are produced but the
famous products are soccer ball, cricket bat, cricket ball, tennis ball etc.
Sports industry of Pakistan has even manufactured the soccer ball for the
FIFA World cup of the year 1994.
The sports industry of Pakistan lies in the city of Sialkot which is a
part of the province of Punjab. All the items of sports of the best quality are
manufactured in the city of Sialkot and sports industry in Sialkot is the main
factor of Sialkot’s economy as it earns great profit from it due to the high
demand of sports good in international market. All other goods related to the
sports are also produced in the sports industry of Pakistan like sports bags,
sports jackets, sports cap etc.
3. Sugar Industry: The sugar industry plays an important role in the economy
of the country. It is the second largest industry after textiles. The output of
sugar as well as the production of sugarcane increased at an average rate 24
percent. At the time of independence in 1947, there were only two sugar
factories in Pakistan. The output of these factories was not sufficient for
meeting the domestic requirements. The country started to import sugar
from other countries and huge foreign exchange was spent on this item. So,
to meet the requirements of sugar the Government setup a commission in
1957 to frame a scheme for the development of sugar industry.
At present there are 76 sugar mills operating in Pakistan. In Pakistan
about 99% of the sugar is extracted from sugar production than the
requirements and in adverse years the country falls short resulting in imports.
4. Cement Industry: Cement industry is one of the few industries that existed
in Pakistan before the partition of the sub-continent. The annual production
of the cement at the time of the creation of Pakistan was only 300000 tons
per year. At the time of independence in 1947 there were four cement
factories with an installed capacity of 470,000 tons per annum. These units
54
 were located at Karachi, Rohri, Dandot and WAH. In 1956 PIDC
established two plants at Daudkel and Hyderabad and subsequently more
plants were established in the private sector.
The major reason for the existence of this industry is the availability of
the raw materials. Pakistan is a country rich in deposits of limestone, shale
and gypsum, which are the main ingredients for the production of cement.
The cement market in Pakistan is divided into two zones: The North zone
and the South zone. The North zone includes Punjab, Azad Kashmir, KPK.
and the upper region of Baluchistan. The remaining area of the Baluchistan
and entire Sindh constitute the Southern zone. The demand for cement has
grown at a steady rate of 8% in the northern region while 4% in the southern
region. The way the new plants are being set up and the existing plants are
undertaking expansion. The demand and supply situation is bound to create
surpluses. New projects are being undertaken in the cement sector.
Fertilizer Industry: Over the past years, this sector has been facing
several challenges due to insufficient gas supplies, high gas tariffs and
heavy taxation. The capacity of Pakistan’s fertilizer production is 6 million
tons per year. The fertilizer sector is heavily supported by the government
because of its significant position in the agricultural sector. At present
government started to focus on strengthening the agricultural and fertilizer
sectors. Special packages are announced for the farmers in order to support
the agricultural sector and also providing subsidies on fertilizers.
Further both urea and Di-ammonia phosphate prices are deregulated
and there is no excise duty or sales tax on fertilize sales. Government also
provides loans to small farmers. The soil of Pakistan is to be deficient in
nitrogen so, Urea is the most used fertilizer which eliminates this factor.
Urea represents 65% of total fertilizer consumed and Di-ammonium
phosphate (DAP), which accounts for 18%, are the main types of fertilizer
used in Pakistan. The main market for urea is wheat growers, followed by
cotton growers, rice and sugarcane cultivators. Although urea produced in
Pakistan cannot meet demand of local community, so the rest is imported
from the other country. However, the only way to get a higher production of
agriculture output is through a more widespread use of fertilizers.

3.7 MAJOR ECONOMIC ZONES OF PAKISTAN

Since independence, Pakistan has been focusing on its industrial development.

Recently some special Economic Zones were approved under CPEC.

55
1. Special Economic Zone:
A Special Economic Zone (SEZ) is a specific area of the land used to promote
industrial growth in a country by providing moderate economic and tax policies.
Government of Pakistan has promoted five industrial estates such as Multan
Industrial Estate Phase-II, Bhawal Industrial Estate and Mianwali, Rahim Yar
Industrial Estate, Dera Ghazi Khan and Rawalpindi Industrial Estate, as special
economic Zone.
 Khairpur Special Economic Zone
 Rashakai Economic Zone Mardan
 Gadoon Economic Zone
 Hathar Economic Zone

Export processing zones (EPZ):

Export Processing Zones Authority is a Pakistan Government venture conceived
and designed to increase and improve the exports of the country. EPZA is one of
the fast-growing projects undertaken by the government and carries a great appeal
for both local and overseas investors. The reason for success in this venture is
simple: to provide service with a mission. And this success would not have come
about without active cooperation and participation of some other sectors which
worked closely and helped The EP2A. Following are the export processing units
of Pakistan:
 Karachi EPZ
 Risalpur EPZ
 Sialkot EPZ
 Gujranwala EPZ
 Saindak EPZ
 Duddar EPZ
 Gwadar EPZ

2. Industrial Estates:
Industrial estates are the ones that are used to carry industrial activities. Activities
such as roads, power, and other utility services are provided to facilitate the
growth of industries and to minimize impacts on the environment. Selection of
industrial sites should depend on social, environmental and economic factors.
Industrial estates should maintain safe distances from residential areas. Industrial
estates units monitor data, review it at regular intervals, and compare it with the
operating standards so that any necessary corrective actions can be taken. These
include:
 Multan Industrial Estate phase-II
 Rahim Yar Industrial Estate
 Bhawal Industrial Estate
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 Mianwali Industrial Estate
 Rawalpindi Industrial Estate
 Dera Ghazi Khan Industrial Estate
3. CPEC Special Economic Zones (SE2s)
 Rashakai Economic Zones - Noshera
 China Special Economic Zone – Dhabeji
 Bostan Industrial Zone
 Allama Iqbal Industrial city – Faisalabad
 ICT Model Industrial Zone – Islamabad
 Development of Industrial Park at Port Qasim.
 Special Economic Zone at Mirpur, AJK
 Mohmand Marble City
 Moqpandass SEZ Gilgit – Baltistan.

SUMMARY

This unit explained the geographical location of Pakistan. Pakistan became an

independent state in 1947 after gaining its sovereignty from the United Kingdom.
Pakistan is a profound blend of landscapes varying from plains to deserts, forests,
hills, and plateaus. In the second section of this unit neighboring countries of
Pakistan, Iran, Afghanistan, India and China has been discussed. Physical features
of Pakistan i.e. landforms and plain areas have been explained. In the third section
of this unit the different climatic regions have been discussed with different type
of climate. After this, the demography of Pakistan has been explained to show the
population of different provinces. Distribution of rural and urban areas population
have been elaborated. After that, the major industries of Pakistan have been
discussing in detail. Major economic zones of different provinces of Pakistan
have been explained.

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 SELF-ASSESSMENT QUESTIONS

1. Describe the geographical importance of Pakistan.

2. Write a detail note on neighbors of Pakistan.

3. Describe the physical features of Pakistan in details.

4. Define Industry and explain the major industries in Pakistan.

5. Define soil? Explain the classification of soil of Pakistan.

6. Discuss the major economic zones of Pakistan in details.

58
Unit–4

NATURAL RESOURCES
OF PAKISTAN

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin

59
 CONTENTS
Page #
Introduction ....................................................................................................... 61
Objectives ......................................................................................................... 61
4.1 Natural Resources .................................................................................... 62
4.2 Mineral Resources of Pakistan................................................................. 62
4.2.1 Coal ............................................................................................... 64
4.2.2 Natural Gas .................................................................................... 64
4.2.3 Mineral Salt ................................................................................... 64
4.2.4 Copper and Gold ........................................................................... 65
4.2.5 Iron Ore ......................................................................................... 65
4.2.6 Lime Stone .................................................................................... 66
4.3 Water Resources ...................................................................................... 66
4.3.1 Rainfall .......................................................................................... 67
4.3.2 The Indus Water Treaty ................................................................. 67
4.3.3 Glaciers .......................................................................................... 67
4.3.4 Rivers ............................................................................................ 68
4.3.5 Dams .............................................................................................. 68
4.3.6 Barrages ........................................................................................ 70
4.3.7 Canals ........................................................................................... 71
4.3.8 Groundwater in Pakistan ............................................................... 71
4.3.9 Fishing in Pakistan ........................................................................ 71

4.4 Natural Vegetation ................................................................................... 72

4.4.1 Forests ........................................................................................... 73
4.4.2 Grass lands .................................................................................... 75

4.5 Agricultural Resources............................................................................. 75

4.5.1 Oil Seeds ....................................................................................... 75
4.5.2 Livestock ...................................................................................... 75
Summary ........................................................................................................... 76

Self-Assessment Questions .............................................................................. 76

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 INTRODUCTION

In the previous unit you learned a brief knowledge about the commercial
geography of Pakistan and now in this unit Natural resources of Pakistan will be
discussed in detail. Ever since the Earth was inhabited, humans and other life on
earth have depended on things that exist freely in nature to survive. All the
resources that exist naturally are called natural resources. The introduction of
mineral resources, types of mineral resources and the regions where these mineral
resources found will be explained. The water resources (rainfall, rivers, dams,
barrages and canals) and fishing in Pakistan will also be elaborated in detail. After
this, the natural vegetation of Pakistan that consists of forests and grasslands will
be elaborated. At, the end agricultural resources i.e. crops and livestock will be
described.

OBJECTIVES
After reading this unit, you will able,
1. to understand the natural resources of Pakistan.
2. to know the minerals resources of Pakistan.
3. to explain the types of mineral resources in different regions of Pakistan.
4. to show the water resources of Pakistan.
5. to explain the fish industry in Pakistan
6. to highlight the natural vegetation of Pakistan.
7. to elaborate the major agricultural resources of Pakistan.

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4.1 NATURAL RESOURCE
Natural resources are the resources that exist without actions of humankind. On
earth it includes, sunlight, atmosphere, water, land (includes all minerals) along
with all vegetation, crops and animal life. All these mentioned above are natural,
and they exist in nature no human created them. Natural resources can be
consumed directly or indirectly. Natural resources can be classified into various
types. Mainly they are divided into two categories A-biotic resources and biotic
resources. The biotic resources consist of plants, animals and microorganisms
whereas the A-biotic resources include nonliving materials such as soil, land,
metals, water and minerals. Other common categorization of natural resources is
renewable resources and nonrenewable resources. Renewable resources are those
natural resources that can be replaced by nature over a period of time.
Nonrenewable sources are those natural resources that are available only in
limited amounts and are not easily replaced by nature.

4.2 MINERAL RESOURCES OF PAKISTAN

After independence of Pakistan, only a few mineral resources that were exist in the
country. So with the help of different surveys, the presence of different resources has
been confirmed. The mineral resources of a country are valuable means and measures
for its economic and industrial growth. These resources are important for Pakistan
because of its favorable geological environment. Pakistan has a widely geological
frame work that includes a number of zones hosting several metallic minerals,
industrial minerals, precious and semi-precious stones. As a result of various efforts
that were made for the development of mineral sector, several mineral resources have
been discovered in different areas of Pakistan, including world class resources i.e.
coal, copper, Iron, gypsum, rock salt etc.

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Mineral industry in Pakistan requires Government support for the exploration and
extraction of minerals. However, the government shows full interest in developing
the mining sector. An institution named Geological survey of Pakistan is
established in Pakistan for the mapping and investigation of different mineral
resources in a particular area. The province of Sindh has large quantities of
minerals. In all there are 24 minerals which are being mined at present. The
province also has large quantities of coal and granite reserves. Karunjhar Range
of Mountains in Nagar parkar has huge reserves of granite and other types of
rocks which has the potential to compete the international market. Some the
mineral resources of Pakistan are given:

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4.2.1 Coal
Mining of coal began in 1887 in different areas of the present Pakistan. After
independence very small quantity of coal was taken out but with the passage of
time more mines of coal have also been discovered. The coal found in our country
is of poor quality. Coal is used in thermal power station and in furnaces for
making bricks. The coalfield in the Sindh province has huge coal resources of
about 175 billion metric tons. About 80 percent of the coal found in our country is
used in bricks and lime burning kilns and some quantity is used for Railway and
for domestic purpose. Now a day’s approximately 80 percent of cement industry
has also switched over to indigenous coal from furnace oil that has saved
considerable foreign exchange being spent on the import of furnace oil. The
conversion of cement industry from furnace oil to coal has generated a demand
for 2.5 to 3.0 million metric tons coal per annum. Coal mines are available in
Makerwal (Punjab), Mach and Degari (Baluchistan), Thar Lakhra and Jhimpir
coal mines (Sindh).

4.2.2 Natural Gas

Natural gas is an important source of energy. It is a great blessing of nature
especially for Pakistan which is deficient in the production of mineral oil. Natural
gas production is at a high level in Pakistan. Under the barren mountains of
Baluchistan are untouched gas reserves that were discovered in 1952 at Sui
district Dera Bugti in Baluchistan province and the commercial exploitation of the
field began in 1955. Estimated reserves are 885.3 billion cubic meters (as of
January 2009).

The Sui gas field is the largest; accounting for 26% of Pakistan’s gas production.
Daily production is 19 million cubic meters a day. The main use of gas is that it is
used for thermal electricity, in cement industry, fertilizers industry and for
commercial and domestic purposes. After the discovery of gas, the Indus gas
company laid a pipe line from Sui to Karachi in order to supply gas to industrial
and domestic consumers. Another company named Sui northern completed a pipe
line from Sui to Multan in 1958.Later on it supplied to the other cities. Major
users of natural gas are Karachi, Lahore, Faisalabad, Multan, Rawalpindi and
Islamabad.

4.2.3 Mineral Salt

Salt is being mined in the region since 320 BC. Salt in its natural form as a
crystalline mineral is known as rock salt. Salt is essential for life in general and
saltiness is one of the basic human tastes. The Khewra Salt Mines are among the
world's oldest and 2ndbiggest salt mines. Khewra Salt Mine is situated in Pind
Dadan Khan Tehsil of Jhelum District. The mine is in mountains that are part of a
64
salt range, a mineral-rich mountain system extending about 200 km from the
Jhelum River south of Pothohar Plateau where the Jhelum River joins the Indus
River. Khewra salt is also known as Himalayan salt. It is red, pink, off-white or
transparentcolor.

Khewra salt mine has an estimated total of 220 million tons of rock salt deposits.
The current production from the mine is 325,000 tons of salt per annum. It is used
for cooking, as bath salt, as brine and as a raw material for many industries. Salt
from Khewra mine is also used to make decorative items like lamps, vases,
ashtrays and statues, which are exported to the United States, India and many
European countries. It has great commercial value.

4.2.4 Copper & Gold

Baluchistan deposits of copper and gold are present in Reqo Diq. The Reko Diq
mine is located near Reko Diq town in Chagai District, Balochistan, Pakistan.
Reko Diq represents one of the largest copper reserves in Pakistan and in the
world having estimated reserves of 5.9 billion tons of ore grading 0.41% copper.
The mine also has gold reserves amounting to 41.5 million metric tons.

Antofagasta the company having possession of Reqo Diq field is targeting initial
production of 170,000 metric tons of copper and 300,000 ounces of gold per year.
The project may produce more than 350,000 tons a year of copper and 900,000
ounces of gold per year. The lease agreement has been terminated with Said
Company by the government of Pakistan. There are also presences of copper
deposites in Daht -e- Kuhn, Nokundi, located in Chaghi district.

4.2.5 Iron Ore

Iron is another mineral resource of Pakistan. Although iron is the fourth most
abundant element in the Earth's crust. Iron ore is the raw material used to make
pig iron, which is one of the main raw materials to make steel and 98% of the
mined iron ore is used to make steel. 11 February, 2015 the reserves of iron were
found in Chiniot, around 160 kilometres northwest of Lahore. 165 million tons of
iron ore reserves had been discovered. The extracted iron had been tested in Swiss
and Canadian laboratories to find that about60 to 65 percent of iron contents is to
be high grade. Iron ore is found in various regions of Pakistan including Nokundi,
Chinot and the largest one in Kalabagh (Less than 42% quality), Haripur and
other Northern Areas. It is used primarily in structural engineering applications
and in maritime purposes, automobiles, and general industrial applications.

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4.2.6 Lime Stone
Limestone is made up of calcium carbonate. Pakistan has rich deposits of
limestone which are found in different regions. The limestone reserve of Pakistan
is huge and therefore its production is increasing rapidly. Limestone production
was 13,150,127 tons (2003-04), 14,857,479 tons (2004-05) and 18,427,706 tons
(2005-06).

Limestone is used in the manufacturing of lime, bleaching powder, glass, soap,

paper, paints etc. The most important ranges of limestone are Trans-Indus salt
Range, the Potwar plateau and Margallah hill.

4.3 WATER RESOURCES

Water is one of the basic necessities of life. All living things require water to
grow and reproduce. 97% of the water on the Earth is salt water and only three
percent is fresh water. Ocean carries a great percentage of the world’s water. The

66
remaining amount is contained by rivers, lakes, ponds and ditches. God has gifted
Pakistan with abundant water resources. Water is required for drinking, domestic,
irrigation and industrial uses. Agriculture sector is also the major user of water
and its consumption will continue to dominate water requirement. Big dams are
the main source of hydropower for industrial development. There are two types of
major water resources in Pakistan, natural and artificial. Natural resources include
rainfall, rivers, glaciers, ponds, lakes, streams etc.

Artificial resources consist of the surface water from rainfall and rivers are stored
in dams and reservoirs. The water from these dams and reservoirs is not only used
for irrigation and supplying water for daily consumption, but also used for
hydroelectric power generation. Sources of water are:

4.3.1 Rainfall
There are two major sources of rainfall in Pakistan i.e. the Monsoons and the
Western Disturbances. The rainfall varies as we move from the north and
northeast to the south of the country. Rainfall over fields and forest are absorbed
by the soil and thus the soil water is used for the cultivation of different crops.
Northern areas of Punjab Pakistan appreciable amount of rainfall in summer as
Compared & Southern parte.

4.3.2 The Indus Water Treaty

Before independence of Pakistan most of the canals are belong to India. As a
result of partition the head-works of these canals remained the part of India and
their drained areas became part of Pakistan. In September 1960, an agreement was
signed which named as the Indus water treaty. Under this agreement Pakistan has
rights over the three western rivers i.e. the Indus, Jhelum and Chenab and India
has right on three eastern rivers i.e. the Ravi, Beas and Sutlej. During this period
India agree to continue supplying water to Pakistan. After this Pakistan construct
different dams and barrages. The estimated cost of two dams, barrages and canals
was about one billion dollars. The amount was arranged by the World Bank.

4.3.3 Glaciers
Glaciers are a large body of ice which holds most of the Earth’s fresh water
resources. When global warming is on rise the life of these glaciers is not
indefinite. The glacier area of Pakistan is about 13,680 sq km. There are more
glaciers in Pakistan than any other land, except North and South Poles. Pakistan’s
Glaciers Systems consists of numerous large and small size glaciers, found in the
northern mountain ranges of Karakoram, Himalaya and Hindukush. The water of
these glaciers is a lifeline for the people and economy of Pakistan. Country is
heavily depending on regular discharge of these waters for large scale agriculture,
67
industrial and domestic use. Without these glaciers, Pakistan would be a barren
place to support its large population base. Siachen, Batura and Hispar are
Karakorum Glacier while Chianter and Tirich Mir are glaciers at Hindukush.

4.3.4 Rivers
Rainfall taking place over hilly and plain areas are form streams and rivers.
Pakistan has been blessed with a number of rivers. Jhelum, Chenab, Ravi, Beas
and Sutlej are the rivers which join the Indus River from eastern side and number
of small rivers which join Indus River from the west side.

4.3.5 Dams
The historical background of dams in Pakistan is relatively short. At the time of
independence, there were only three dams in Pakistan. The two dams which are
built as a part of Indus water Treaty were at Tarbela and Mangla. The project of
dams is designed to store large quantity of water in order to generate electricity.
The Mangla Dam is located on the Jhelum and it has storage capacity of 7.4
million acre-feet and generated 1,000 megawatts of electricity. It supplies water to
canals that irrigated the mostly Doabs.

Tarbela Dam
Tarbela dam is the largest water reservoir of Pakistan located in KPK on Indus
River with 11.0 million acre-feet water storage capacity and 3,478 megawatts
electricity generating capacity.

68
Mangla Dam

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4.3.6 Barrages
Barrages are usually larger than the head works of irrigation and link canals, a
barrage is a diversion of dam which consists of a number of large gates that can
be opened or closed to control the amount of water passing through them, and
thus regulate and stabilize river water upstream for use in irrigation and other
systems. A barrage is built for diverting water, and raises the water level only a
few feet; they are generally built on flat area across meandering rivers. Chashma
Barrage, Guddu Barrage, Sukkur Barrage, Taunsa Barrage etc. are the barrages of
Pakistan.

Important barrages of Pakistan

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4.3.7 Canals
Canal which brings river water close to the field where it is required? These
canals come out of rivers, dams, and barrages. The irrigation system of Pakistan is
one of the best in the world due to the largest irrigation system in the world. Canal
System of Pakistan consist of three main important types of canals: Perennial
Canals, Non-Perennial Canals and Inundation Canals. Perennial canals are the
canals that are used to supply water to the field and these are taken either from
dams or barrages and these includes Lower and upper Bari Doab, Lower & Upper
Chenab canal and Sidhnai. Non-perennial canals include Sutlej, Sidhnai (from
Ravi) and Haveli (from Chenab) canals. The Inundation canal is taken from the
rivers when there is a rise in the water level due to flood and include canals of
Chenab and Indus river. 45 canals have been taken from rivers, dams and barrages
to provide water to the fields.

4.3.8 Groundwater in Pakistan

Other important source of water is groundwater which consists 99 percent of fresh
water and easily accessible for the world. In Pakistan the volume of ground water is
immeasurable. The water is used for irrigation purposes and pumped through tube
wells. The irrigation of land has been started though tube wells in early sixties. For
the Indus Basin Irrigation System 500,000 tube wells has been installed.

4.3.9 Fishing in Pakistan

Fishery and fishing industry plays a significant part in the national economy of
Pakistan. It is one of the great primary industries of the world. Now a day fishing
industry is not only meeting the local requirement but also export to the other
countries. Pakistan has enough fishery resources that remain to be developed.
Most of the population of the coastal areas of Sindh and Baluchistan depends on
fisheries for livelihood. It is also a major source of export earnings. Fishing
industry is the managed by the Fisheries Development Commissioner (FDC)
under the Ministry of Food, Agriculture and Livestock (MFAL) of Government of
Pakistan. The office of the FDC is responsible for policy, planning and
coordination with provincial fisheries departments and other national and
international agencies. Some universities in the country are also involved in basic
fisheries research.

Pakistan has many marine and inland fishery resources. There are about 16,000
fishing boats in coastal area of Pakistan which operate in shallow coastal waters
as well as in offshore areas. There are 29 fish processing units in Pakistan with
storage capacity of 10,000 tons, out of these 25 units are located in Karachi.
Through this process, 8 establishments have already improved their conditions
and were approve to export seafood to European Union countries. A substantial
quantity of fish is consumed locally a remaining is exported. Fish is used as a
meal as well as for manufacturing of different products. Fish oil is used for

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medicines and for industrial purposes like lubricating, soap making, tanning and
tempering of steel.

Types of fisheries:
There are three main types of recreational fisheries in Pakistan: billfish and tuna
fishing in the EEZ of Karachi; sport fishing (pelagic) in coastal waters; and hand-
line fishing (bottom fishing) in inter-tidal and shallow waters. About 1,000 people
with 120–150 fishing boats are involved in this sector.

Marine fisheries
Marine fisheries in Pakistan are being carried out on two distinct grounds i.e.
coastline covering Mekran (Balochistan) as well as the coast of Karachi (Sindh).
Karachi and Mekran being the most important fishing ports are being developed by
the Government of Pakistan as a fishing centre. Inland fisheries are getting much
popularity. Some inland resources include small rivers, dams (Tarbela, Mangla and
Chashma), lakes (Haleji, Keenjhar and Manchhar), barrages, reservoirs, ponds and
canals.

Pakistan exports reasonable quantity of prawns, shrimp, fish and its products and
earns a substantial amount of foreign exchange. Fish and fish products are
processed and exported to many countries, European Countries being at the top.
Major markets for export are: Canada, USA Denmark, Japan, Holland, Norway,
Iceland, Korea, Hong Kong, Taiwan, Singapore Malaysia, and Gulf.

4.4 NATURAL VEGETATION

Natural vegetation comprises forests, shrubs and grasses, and it is determined by
the climatic conditions and soil types of a country. From all these forests are the
most important to humans because these provide timber and firewood to the
people. Many geographers emphasize on the importance of trees. For a balanced

72
economy 20-25 percent of the land should be under forest. The climate of
Pakistan is too dry for forests. In Pakistan, only about 5 percent of the total area is
forested. Slightly over two-thirds of the forest land is under public ownership, the
remainder being privately owned. The natural vegetation of a country is depends
upon its temperature, type of soil and amount of rainfall. Areas where there is low
rainfall have poor natural vegetation. So the temperature and rainfall in different
regions of a country is different and therefore natural vegetation of these regions
include into forests and grass lands are also different.

4.4.1 Forests
The total area of forests in Pakistan is 4.224 million Rectors which is 4.8% of the
total land area. The forest covered area has been considerably reduced. Punjab
cover 17%, Sindh 18%, Baluchistan 8% and KPK covers highest share of forests
i.e. 32%. Between 1981 and 1990, forest area of the Tropical Asia and Oceania,
which Pakistan is a part of, had been decrease up to 4.3%. During the same
period, a 0.6% deforestation had been occurring each year. In Pakistan,
subtropical, temperate, Riverain and mangrove forests are being lost because of
unfavorable use of land and the ever-increasing demand for timber and firewood.
Total Forest Area under the control of the Forest Departments (including Azad
Kashmir and the Northern Areas) is 4.26 million hectares. The forestry sector of
Pakistan is a main source of lumber, paper, fuel wood, medicine as well as human
and animal food. The following forest types are found in Pakistan.
 Littoral and Swamp forests: These are forests of low heights which occur
in the Arabian Sea around the coast of Karachi and Pasni in Baluchistan. It
covers at least 14 million hectors and 257500 hectors. These forests are
found in Pakistan and the 7th largest littoral and swamp forests in the world.
These forests are evergreen and it is not important from the point of view of
timber production. They are natural habitat to a large number of insects,
microorganisms, birds, different mammals as well as snakes. These are also
known as mangroes.
 Tropical dry deciduous forests: These are low or moderate height forests
that consist of entirely deciduous species. This type does not occur
extensively in Pakistan but there are limited areas in the Rawalpindi
foothills carrying this type of vegetation. The spring is hot and dry but there
is much rain in late summer up to 37 inches during the year.
 Tropical thorn forests: This type of forests is naturally growing over the
whole of Indus plain except for the driest areas. In upper Indus plains these
forests are known as Rakh forest while in lower Indus plains known as
desert forests. They are most widespread in the Punjab plains, but these
forests also occupy small areas in southern Sindh and western Baluchistan.
Its annual temperature varies from 75 F to 80 F. Annual rainfalls in these
areas is 30 inch to 5 inch which changes from year to year. The districts of
Sialkot, Gujrat and Jhelum consist of this type of tropical thorn forests.

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 Sub-tropical broad-leaved evergreen forests: These evergreen forests consist
of branchy trees. These forests are small-leafed evergreen species. These trees
and shrubs are mostly thorny and evergreen, but some other trees like olive and
pomegranate are not thorny. This type occurs on the foothills and lower slopes
of the Himalayas, the salt Range and the Sulaiman Range. These forests are
found in Gujrat, Margallah hills, Attock and Malakand.
 Sub-tropical pine forests: Sub-tropical pine forests which are generally
known as Chir pine forests have tree height up to 120 ft. these are open
inflammable pine forest sometimes with, but often without a dry evergreen
shrub layer and little or no underwood. These types of forests are generally
found in Abbottabad, Kashmir, Dir and Swat.
 Himalayan moist temperate forests: The evergreen forests of conifers.
Their undergrowth is rarely dense, and consists of both evergreen and
deciduous species. These forests occur between 1500 m and 3000 m
elevation in the Western Himalayas except where the rainfall falls below
about 1000 mm. These forests are divided into a lower and an upper zone, in
each of which definite species of conifers and oaks dominate. Mainly these
are found in Murree, Kaghan, AJK and Nathiagali Shogran.
 Himalayan dry temperate forests: These forests are open evergreen forest
with open scrub undergrowth. Both coniferous and broad-leaved species are
present. The annual total rainfall is less than 30 inches. This type of forests
is confined to hilly country and most it on steep rocky slope. Himalayan dry
temperate forests occur on the inner ranges throughout their lengths and
mainly represented in the north-west.
 Sub-alpine forests: Evergreen conifers and mainly evergreen broad-leaved
trees occur in relatively low open canopy. Sub-alpine forests zone is
topmost tree formation in Himalaya being developed between 11000 to
12000 feet on northern aspects. These forests receive appreciable amount of
rainfall and snow. It is found in Kashmir, Dir, Swat, Chitral and Hazar.
 Alpine scrub: Under this type are included shrub formations 1 m to 2 m high
extending 150 m or more above the sub-alpine forests. Alpine scrub zone
consists of limited number of species. The stems are generally, flexible and
adapted to snow pressure. These forests are present in Kashmir, Hazara, and
Upper Dir.

Lower Dir, Miandam Swat

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4.4.2 Grass Lands
Grasslands are environments in which grasses and grass like plants dominate the
vegetation. Grasslands develop wherever rainfall is not high neither too light.
There are few trees in grasslands because the climate is too dry, or the soils are
not of a good quality. Grasslands can therefore support a high density of grazing
animals. Temperate grasslands are found where the summers are hot, the winters
cold, and rainfall is low throughout the year. Tropical grasslands grow where
temperature is relatively high during the year round and rainfall occurs seasonally.
Many grass species can grow back quickly. Fire and herds of large grazing
animals are the factors which are found in most grassland areas. The animal life is
mainly depending upon the grassland.

4.5 AGRICULTURAL RESOURCES

Agriculture is a vital sector of Pakistan's economy. The Economy of Pakistan
largely depends on its agricultural resources because it provides livelihood to
millions of peoples. Pakistan’s agricultural sector accounts for about 70 percent of
rural household income and nearly one-quarter of national GDP. In Pakistan, farm
production is dominated by a few crops. The most important crops are wheat,
sugarcane, cotton, and rice, which together account for more than 75% of the
value of total crop output. Pakistan's largest food crop is wheat. Pakistan exports
rice, cotton and fruits to the other countries. The government introduced
agriculture assistance policies, including increased support prices for many
agricultural commodities and expanded availability of agricultural credit for the
farmers in order to get maximum agricultural output. Agricultural reforms,
including increased wheat and oilseed production, play a central role in the
government's economic reform package. Pakistan depends on one of the world's
largest irrigation systems to support its forming.

4.5.1 Oil Seeds

Some seeds like seed of Mustard, Sunflower and Soybean are also very important
cash crops but vegetable oil is mostly manufactured from the cotton seeds. These
crops are helpful to strengthen the economy and to save a lot of foreign exchange
for the country. Sunflower and mustard are the major oilseeds of Pakistan.
The production of oilseeds can he greatly increased through government policy
measures and technological developments. Oilseeds can also be grown profitably
on fallow lands in Barani areas.

4.5.2 Livestock
Livestock is a subsector of Pakistan’s agriculture which contributes approximately
56% of value addition in agriculture and nearly 11% to the gross domestic
75
product (GDP). Livestock contribution towards agriculture sector is very
significant where large scale mechanization has not taken place. Animals pull
farming equipment’s and provide peoples with meat, milk and eggs. Cow dung is
used as a fuel and fertilizers. Moreover, animals supply skin, wool and leather etc.
In the Pakistani livestock sector, milk is the single most important commodity.
The share of livestock in the agriculture sector is significant due to its overall
contribution. It plays an important role in poverty reduction strategies, and this
sector may be developed very quickly as all required inputs for this sector are
available in adequate quantities in the country.

SUMMARY
This unit explained the natural resources of Pakistan. These resources are
important for Pakistan because of its favorable geological environment. Pakistan
has a widely geological framework that includes a number of zones hosting
several metallic minerals, industrial minerals, precious and semi-precious stones.
In the first section of this unit different types of mineral resources and their
location has been explained. In the second section of this unit different water
resource have been described. After this, Natural vegetation that comprises
forests, shrubs and grasses, and also the climatic conditions and soil types of a
country have been explained. In the last section of the unit agricultural resources
that consist of different crops (wheat, rice, maize, cotton, sugarcane etc.) and
livestock have been discussed in detail.

SELF-ASSESSMENT QUESTIONS

1. Explain the worldwide production of iron and steel industry.

2. Explain the suitable factors for the growth of natural vegetation.

3. Describe the worldwide production and distribution of iron ore.

4. Describe the worldwide production of coal.

5. Write a detail note on Uranium.

6. Write down the uses of Gold and its world wise production.

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Unit–5

AGRICULTURAL RESOURCES
OF PAKISTAN

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin

77
 CONTENTS

Page #
Introduction ....................................................................................................... 79

Objectives ......................................................................................................... 79

5.1 Evolution of Agriculture .......................................................................... 80

5.2 Introduction to Agricultural Sector .......................................................... 81

5.3 Factors Affecting Agriculture .................................................................. 83

5.4 Agricultural Crops of Pakistan................................................................. 85

5.5 Fruits and Vegetables ............................................................................... 91

5.6 National Agriculture Research System of Pakistan ................................. 95

Summary ........................................................................................................... 97

Self-Assessment Questions ............................................................................... 98

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 INTRODUCTION

This unit will start with a brief history of agriculture sector that describes the
domestication of plants and animals and the development of new techniques for
raising the productivity. After this, the introduction of agriculture sector of
Pakistan will be discussed in detail. Factors that not only affect the agricultural
output but also the industrial sector will also be explained. Major agriculture
crops that are sown in different regions of Pakistan and area, production and yield
will be elaborated. Different Fruits and vegetables that are cultivated in Pakistan
will be described. In the last section of unit, the National Agriculture Research
system of Pakistan will be explained.

OBJECTIVES

After reading this unit, you will able:

1. to know about the history of agriculture sector.
2. to introduce the agriculture sector of Pakistan.
3. to elaborate the factors that affects agriculture sector.
4. to discuss major agriculture crops of Pakistan.
5. to highlights fruits and vegetables that are cultivated in Pakistan.
6. to explain National Agriculture Research system of Pakistan.

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5.1 EVOLUTION OF AGRICULTURE
The history of agriculture records the domestication of plants and animals and the
development of new techniques for raising the productivity. Agriculture began
independently in different parts of the globe and included a diverse range of taxa.
Wild grains were collected and eaten from at least 20,000 BC. From around 9,500
BC, the eight different crops included emmer wheat; einkorn wheat, hulled barley,
peas, bitter vetch, chick peas, and flax were cultivated in the Levant (Middle
East).

Rice was domesticated in China between 11,500 and 6,200 BC. In 7000 BC,
many agricultural products like Sugarcane and some root vegetables were
domesticated in New Guinea. Sorghum was domesticated in the Sahel region of
Africa by 5,000 BC. The potato was domesticated in South America between
8,000 and 5,000 BC, along with beans, coca, llamas, alpacas, and guinea pigs.
Bananas were also cultivated in the same period. Cotton was domesticated in Peru
by 3,600 BC.

In the Middle Ages, both in the Islamic world and in Europe, agriculture sector
transformed with improved techniques and introduced sugar, rice, cotton and fruit
trees. After 1492, the Columbian exchange brought New World crops such as
maize, potatoes, sweet potatoes to Europe, and Old World crops such as wheat,
barley, rice, and turnips, and livestock including horses, cattle, sheep, and goats to
the Americas.

Irrigation, crop rotation, and fertilizers were introduced soon after the Neolithic
Revolution and developed much further in the past 200 years, starting with the
British Agricultural Revolution. Since 1900, agriculture sector in the developed
nations and in the developing world, has seen large rises in production of
agricultural output as new innovations has been brought instead of human labour
like mechanization, synthetic fertilizers, pesticides, and selective breeding. The

80
Green Revolution was doing series of research and development projects to
introduce technology between the 1940s and the late 1970s. This revolution
increased agriculture production around the world. Increased supply of grains has
led to cheaper livestock as well. Further, in 20th century there was great increase in
global yield when high-yield varieties of common staple grains such as rice, wheat,
and corn were introduced as a part of the Green Revolution. The Green Revolution
exported the technologies (including pesticides and synthetic nitrogen) to the
developing countries. The Green Revolution was significantly increased rice yields
in Asia. In the past 15 to 20 years the yield increases have not occurred.

In 1901, Dan Albone constructed the first commercially successful gasoline-

powered general-purpose tractor. Laters, in 1923, there were replacements of draft
animals with machines by introducing International Harvester Farm all tractor.
Since that time, self-propelled mechanical harvesters, planters, Tran’s planters
and other equipment have been developed for further development of agriculture
sector. These inventions allowed the farmers to fulfill all tasks with a speed and
on a large scale leading modern farms to output much greater volumes of high-
quality produce per land unit.

5.2 INTRODUCTION TO AGRICULTURE SECTOR

Pakistan has rich and vast natural resources that cover different climatic regions.
Pakistan has potential for producing all types of food commodities. For economic
development and growth agriculture sector play an important role. Agriculture
sector is providing food to the consumers and fibers and other raw material to and
it is also a source of foreign exchange earnings. Agriculture constitutes the largest
sector of our economy. It contributes 24 percent of gross domestic product (GDP).
To make agriculture more effective in supporting higher economic growth and to
reduce poverty level in Pakistan, a policy framework is required with favorable
socio-political climate and adequate governance. In order to improve farm level
practices and to develop links of farmers with markets and industry, government
need to barrow new technologies for the farmer in order to sustainable growth of
Agro industry. Agriculture sector has traditionally achieved a satisfactory growth
level to ensure food security for growing population. Major problem that the
farmer has been faced is that of low returns to farmers because of higher cost of
production. The total geographical area of Pakistan is 79.6 million hectares.
About 27 percent of this area is currently under cultivation. Of this area, 80
percent is irrigated. The cultivable waste land area offers good possibilities for
production of crops. Pakistan is classified as arid to semi-arid because rainfall is
not enough to grow agricultural crops, forests and fruit plants and pastures.
Agriculture is largely dependent on artificial means of irrigation of the total
81
cultivated area, about 82 percent or around 17.58 million hectares is irrigated,
while crop production in the remaining 3.96 million hectares depends mainly
upon rainfall. In Pakistan, the best area of agricultural production is Punjab. Its
soil is very fertile, and its irrigation system is very fine.

About 50 years ago, agricultural sector was not considered as a commercial sector
for economic development in many developing and developed nations. During the
last 50 years this sector is realized as a major productive sector of Pakistani
economy. 61 percent population is living in more than 50000 villages in Pakistan.
The government is currently focusing to develop mechanisms for minimizing cost
of production to increase farmer’s interest in agriculture and livestock. As a
policy, the government provides infrastructure support to agro-processors in order
to provide job opportunities for growing young population. During 2016-17
performance of the agriculture sector remained up to the mark and achieved
growth of 3.46 percent against the target of 3.5 percent. This was possible by
better harvesting of major crops trough greater availability of agriculture inputs
like water, agriculture credit and intensive fertilizers.

Pakistan Economic Survey 2016-17

Agriculture Growth Percentages

Sector 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Agriculture 1.96 3.62 2.68 2.50 2.13 0.27 3.46
Crops 0.99 3.22 1.53 2.64 0.16 -4.97 3.02
Important Crops 1.50 7.87 0.17 7.22 -1.62 -5.47 4.12
Other Crops 2.27 -7.52 5.58 -5.71 2.51 0.59 0.21
Cotton Ginning -8.48 13.83 -2.90 -1.33 7.24 -22.12 5.59
Livestock 3.39 3.99 3.45 2.48 3.99 3.36 3.43
Forestry 4.76 1.79 6.58 1.88 -12.45 14.31 14.49
Fishing -15.20 3.77 0.65 0.98 5.75 3.25 1.23

Pakistan has two crop seasons, "Kharif" being the first sowing season starting
from April-June and is harvested during October-December. Rice, sugarcane,
cotton; maize, moong, mash, bajra and jowar are “Kharif" crops. "Rabi", the
second sowing season, begins in October-December and is harvested in April-
May. Wheat, gram, masoor, tobacco, barley and mustard are "Rabi" crops.
Pakistan’s agricultural production is closely linked with the availability of
irrigation water. During 2016-17, the availability of water for Kharif 2016 stood
at 71.4 million-acre feet and During Rabi season the water availability remained
at 29.7 million-acre feet.

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5.3 FACTOR AFFECTING AGRICULTURE
Agriculture is the support of Pakistan’s economy. It thus plays central role in
national development, food security and poverty reduction. The rapid growth of
Pakistan’s urban areas indicates that demand for high-value perishable products
such as fruits, vegetables, dairy, and meat is rising. Management and control of
research resources and information throughout the agricultural research system is
weak. It is an activity in which nature and man are involved. The role of man is to
sow the seed and nature germinates that seed. In the same way man and nature
can affect the agricultural produce. Many other factors can also affect the
agriculture which is:

5.3.1 Natural Factors

Agricultural activities are not uniform due to the natural factors. Due to these
factors agricultural output can be affected. Natural factors are climate, soil and
topography.

5.3.1.1 Climate
The most important factor that controls agriculture is climate. Different types of
agricultural output are depending on the climatic condition of a region. Areas where
there is a deficiency of heat are also deficient in agricultural produce. Temperature
is an element that has significant impact on agricultural output. Its can determine
the growth of natural vegetation. Every crop required a certain temperature for its
growth and development. For example, if temperature exceeds a crop's optimal
level, if sufficient water and nutrients are not available, yield increases may be
reduced or reversed It the same time rainfall also affects crop productivity.

5.3.1.2 Soil
The second factor that affects agriculture is soil, because there is great difference
of various agricultural crops in the world due to change in soil. A rich soil for
plantation of different crops is the chief requirement of successful agriculture.
Soils that are poor in texture have low productivity. It produces agriculture output
of poor quality and variety.

5.3.1.3 Topography
Topography also effects agriculture as it relates to soil erosion and poor
transportation facilities. Agricultural crops are mainly depending on the
topography of land. On hilly and rough areas, the use of agricultural machinery is
not possible. In hilly areas, the barren land can be changed into plain land for
cultivation of different crops by using new techniques and methods.

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5.3.2 Economic Factor
Agricultural activities are affected by Economic factors which are as follows.

5.3.2.1 Transportation Facilities

Road transport plays an important role in agricultural development. Transport is a
crucial that can improve agricultural productivity. It enhances quality of life of the
people, creates market for agricultural produce and can facilitate interaction among
geographical and economic regions. Through transport agricultural output can be sent
to the warehouses and markets so its role in agriculture is very significant.

5.3.2.2 Markets
Markets are the context, both physical and conceptual, where exchange takes
place. Market will generally affect the competitive power of the agricultural
output. Places near large centers of population generally develop market.
Perishable goods can be transported to the market for short distances without
much damage. Large bulk of agriculture production can be transported to the
markets, where there is large number of buyer.

5.3.2.3 Labour
Agriculture sector requires skilled labour that is efficient for productive activities.
A skilled labour can easily judge the suitable season and soil for the cultivation of
different crops. Agricultural labour can determines the timely sowing, harvesting
and other practices that ensure favorable return. So without labour the agriculture
growth cannot be possible.

5.3.2.4 Capital
Capital is main factor that is essential in agriculture. The modern farming
technique has become capital-intensive. The farmer has to invest large amount of
capital in agriculture, so he can buy agriculture machinery, fertilizers and
chemicals which is not possible without money.

Social Factors
Social factors affect farming in a number of ways. The type of farming practiced
is always related to regional social structure. Social factors can also affect the type
of crops that are grown. Social factors include:
 Inheritance of land: In many parts of the world the land of father is divided
between his children. This will lead to the breaking of small farms into
smaller units which affect the productivity.
 Lack of agricultural education: Uneducated farmers affect the agricultural
output due to unawareness about newly scientific methods and use of
modern technology.

84
 Size of holdings: size of holdings is the factors that affect the farming
system. Small size of holdings affects the efficiency of production and on a
large scale, it is impossible for small size of holding to use machinery.
 Political Factors: Political factors also play a vital role in agricultural
development. The political system, i.e., capitalistic, communist or socialistic
system determines the pattern of agriculture.
 Encouragement from government: The government policies regarding
land, irrigation, marketing and trade, etc., have a direct impact on
agriculture. Government facilities can help the farmer for the improvement
of agriculture production.
 Security of farmer’s right: Government should protect the rights of
farmers under law, so that they may work with more interest

5.4 AGRICULTURAL CROPS OF PAKISTAN

In Pakistan, farm production is dominated by a few crops which account
for almost 60 percent of GDP from agriculture. The most important crops are
wheat, sugarcane, cotton, and rice, which together account for more than 75% of
the value of total crop output. Cropping systems vary widely because of variations
in agro-climatic and soil conditions. Wheat is the major winter crop in all regions
of the country. In summer, rice, cotton, and maize are grown in areas suitable for
their production. The economic significance of different major crops is briefly
described in the following paragraphs.

5.4.1 Wheat
Wheat is the leading food grain of Pakistan. Wheat is a grassy shaped plant and its
height between 2.5 feet to 4 feet. When it is cultivated its growth start and the
number of grains on a plant depends upon the quality of seed, climatic condition
and fertility of soil. Wheat is cultivated almost all regions of Pakistan and it
occupies an important position in the crops of moderate regions as compared to
other crops. Wheat is cultivated thousands of years ago and in the beginning it
was cultivated in the western Asian countries and in Nile, Sindh and Dajla valley.
In our country wheat is produced on large scale.

For the cultivation of wheat loamy soil having proper quantity of sand and clay is
very suitable. Wheat production requires suitable temperature at the time of
plantation of the crop i.e. 500 to 600 F. The temperature rises up to 700 F at the
time of plantation which is harmful for the plant and its growth. The areas having
20” to 30” rainfall are more suitable for wheat plantation. Wheat accounts for 9.6
percent of the value added in agriculture and 1.9 percent of GDP of Pakistan.
During 2016-17, sown on an area of 9052 thousand hectares that show a decrease
of 1.9 percent compared to 9224 thousand hectares during same period last year.
85
Wheat production was estimated at 25.750 million tons during 2016 showing an
increase of 0.5 percent over the last year’s production of 25.633 million tons. The
production increased due to better supply of inputs which contributed in
enhancing per hectare yield.

Area, Production and Yield of Wheat

Wheat production in Thousand tons

5.4.2 Rice
Rice is also an important element of human diet. Pakistan does not receive enough
rainfall for the growth of rice. The areas which receive comparatively more rain
are favored for the cultivation of rice. Rice is not grown as widely as wheat in
Pakistan. The grassy shaped rice plant is produced mostly in the areas having of
hot and moist climate. At the time of sowing rice, the temperature should not be
less than 700F but at the time of cultivation if the temperature increases from 800F
to 900F there is no harm at all. Rice is a plant of water, so the areas where annual
rainfall is less than 40” cannot be carried out for cultivation without irrigation

86
system. As the plant grow the requirement of water increases. For cultivation of
rice alluvial clay soil is best and suitable.

Rice share in agriculture sector is 3.0 percent and 0.6 percent of GDP. During
2016-17, rice crop was shown on area of 2724 thousand hectares showing a
decrease of 0.6 percent over the last year’s area of 2793 thousand hectares.
Production of rice decreased due to decline in domestic prices of rice which
reduced the area under the crop and growers shifted to sugarcane and maize crop.

Area, production and yield of rice

Rice production in tons

5.4.3 Maize
Maize being the highest yielding cereal crop in the world and it is a plant of
tropical regions. In Pakistan maize is third important cereal after wheat and rice.
In Pakistan, maize crop is sown mainly in two seasons; spring and the autumn
season. Spring maize can be planted in the first week of February up to first week
of March while the sowing time for autumn maize starts from the last week of
July and ends in mid of August. Maize can be sown on both flat soils as well as
on the ridges. Ridge sowing is better for water saving. The most suitable soil for
cultivation of maize is fertile soil. Maize has prospective to play major role in
nutrition of Pakistani people. It can act as the alternate food source when the

87
conventional cereal grains are deficient. The maize cultivation does not require
abundant rainfall. The areas where the rain is approximately 20” annually are
suitable for its cultivation.

Maize contributes 2.7 percent in agriculture sector and 0.5 percent to GDP.
During 2016-17, the cultivation of maize has increased to 1334 thousand hectares,
showing a significant increase of 12.0 percent over last year’s. The record
production has been achieved through the use of critical agricultural inputs
(fertilizers) with an increase in area sown.

Area, production and yield of Maize

Maize production in Thousand tons

5.4.4 Sugarcane
Sugarcane is an important cash crop of Pakistan. It is mainly grown for sugar and
sugary production. It is an important source of income and employment for the
farming community of the country. It is grown in tropical and sub-tropical regions
of the world in a range of climates from hot dry environment near sea level to
cool and moist environment at higher elevations. Pakistan occupies an important

88
position in cane producing countries of the world. It ranks at the fifth position in
cane acreage and production and almost 15th position in sugar production.

The goal of increasing sugar yield per unit area is difficult, time consuming and
needs dedicated efforts of government, millers and the growers. Some of the
measures to bring down the cost of cultivation and improve cane productivity
include the selection of the right varieties, maintenance of soil health fertility,
quality planting material, nutrient management, adoption of cropping systems
approach, water management according to the scientists. It also forms essential
item for industries like sugar, chip board, paper, barrages, and uses in chemicals,
plastics, paints, synthetics, fiber, insecticides and detergents.

During 2016-17, the production of sugarcane reached to historical high of 73.6

million tones showing an increase of 12.4%. Its production accounted for 3.4
percent in agriculture’s value addition and 0.7 percent in overall GDP. The
production increased due to increase in area cultivated as it shifted from other
competitive crops facing frequent distress.

Area, production and yield of sugarcane

Sugarcane production in tons

89
5.4.5 Cotton
Cotton is called the plant of warm temperate regions. Cotton is known as a king of
all the natural fibers. It is said, the man uses cotton cloth from his birth to death.
Cotton is known as silver fiber. Mostly the color of cotton fiber is white. The
cultivation of cotton requires sufficient quantity of lime, potash and nitrogen in
the soil while in desert areas its plantation is impossible. The areas where there is
30 to 40 inches annually rainfall are suitable for its cultivation. Cotton crop is
sown in the month of April or May and the temperature required range from 770F
to 900 F. frost, moist and snow falling is not suitable for a good crop. Cotton
cultivated in Pakistan is divided into Desi and American kind. The government
has set up two research centers at Multan and Tando Jam to increase the
production of cotton. These centers made recommendations to use different kinds
of cotton after analysis and experimentation. Government has persuaded the
farmers to plant new varieties of cotton seed.

During 2016-17, Cotton production was estimated at 10.671 million bales, 7.6
percent increase over the production of 9.917 million bales during 2015-16.
Cotton crop has 1.0 percent share in GDP and contributes 5.2 percent in
agriculture sector.

Area, production and Yield of Cotton

Cotton production in thousand bales

90
5.5 FRUITS AND VEGETABLES
Fruits and vegetables constitute important items of food. In farming system, every
farmer desires to be self-sufficient in food, including fruits and vegetables. Punjab
is the producer of most of its fruits. Punjab producing 54 percent, Sindh 16
percent, Baluchistan 22 percent and KPK 8 percent fruits. Pakistan produces
tropical fruits named citrus fruits, mangoes, bananas and dates etc.

Different vegetables are also cultivated in different regions of Pakistan.

Furthermore, climatic and soil condition do not permit every farmer to cultivate a
piece of land for vegetables. About 85 percent of potato grown in Punjab province
and Tomato is another important vegetable. About 15 percent of tomatoes come
from Punjab, 40 percent from KPK, 25 percent from Sindh and 20 percent from
Baluchistan. Other vegetables include lady fingers, bitter gourd, pumpkin, beans,
radish, spinach, cabbage, sweet potatoes etc. are cultivated in different areas of
Pakistan.

Fruits 2010-11 2011-12 2012-13 2013-14 2014-15

Mango 1503213 1304223 1280211 1251967 1313612
Banana 8217 4500 3568 2128 1673
Apple 3534 3541 3545 3545 3506
Pomegranate 13304 11859 11038 10325 9762
Guava 420091 377555 379389 375080 373007
Apricot 227 253 241 246 247
Peach 363 220 188 202 192
Plums 262 202 202 196 172
Dates 42533 44170 43634 43850 44041
Vegetables 2010-11 2011-12 2012-13 2013-14 2014-15
Ladyfinger 107453 102577 110114 108426 112983
Brinjal 84707 85965 91126 84149 82999
Bitter gourd 53728 55729 58730 57190 56949
Pumpkin 41458 44530 47925 41973 40292
Beans 1507 1571 1803 2494 2274
Radish 172326 174089 170366 168257 160265
Carrot 241580 235935 90998 251054 227075
Cabbage 74282 73137 76778 77159 77233
Sweet potato 13459 13658 13076 12130 11102
Peas 98171 104995 113067 114925 139233

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5.5.1 Vegetables
Vegetables offer good value in terms of nutrients. Varied agro-climatic conditions
prevailing in different provinces of the country also contribute to year round
production of different kinds of vegetables with many overlaps of supply. The
major vegetable grown in the country are potato, onion, chilies, tomato, turnip,
okra carrot, cauliflower peas and tinda gourd covering 75% of the total area under
vegetables accounting for 74% of the total production. The major share in the
production is of Punjab (63%) followed by Sindh (14%), Baluchistan (12%) and
KPK (11%).

Potato: Potato is grown under diverse seasons in various provinces. The autumn-
sown potato is the major crop and contributes 60% to the total production in the
county. It is sown in September-October and harvested in December-January. The
autumn and spring crops are grown in Punjab and KPK only, whereas the hill
crop is sown in Punjab, KPK and Baluchistan. The diversity in growing season of
potato in different agro-ecological regions makes it possible to ensure supplies to
the domestic consumers throughout the year. The spring and summer crops each
contribute 20% to the total production.

Onion: Onions are grown over a number of seasons in the country. Pakistan
annually produces about 1.5 million tons of onions, with an increasing trend during
the past 6 years. In Sindh planting of onion starts in autumn and ends up to mid of
January. About 30% of the total crop is planted in autumn and remaining 70% in
winter. Onion is the most valuable crop for Malakand division. Within this region
50% comes from Swat, 28% from Dir and 4% from Malakand Agency.

Tomato: Tomato is widely used in various dishes and as salad. Out of its
production, 38% is contributed by each of KPK and Baluchistan provinces, and
15% and 9% by Punjab and Sindh, respectively. Tomato is grown most of the
year in some parts of the county. In the hot-wet season, production shifts from
lowlands to the relatively cooler and dryer highlands. Because high land
production areas are limited, tomato supply dwindles in the wet season resulting
in drastic price increases.

Cauliflower: Cauliflower has a seasonal supply pattern. Summer supplies come from
Abbottabad, prior to the autumn crop from Punjab and Peshawar. There is very little
supply during May to July period. The opportunity for increased cauliflower
production during early summer should be exploited. In Sindh seedlings of early
varieties of cauliflower are raised during May to August and are transplanted from
early July to September. Seedlings of imported varieties are raised in the months of
September to October and transplanting is done in October and November.
92
Chillies: The production of chilies has resulted in the raising of 85% of total
production from Sindh. Punjab produces 12% and Baluchistan 3%. There is a lack
of taste for chilies in KPK, so there is little interest in its production in the
northwestern region. About 80% of the production comes in autumn and 20% in
spring.

Turnip: Turnip trade is dominated by large winter supplies with smaller volumes
supplied during summer. In Punjab and KPK plains, it is extensively cultivated in
Swat, mainly Kalam and to a lesser extent Malam supplies alone during the early
part of the summer. In the late summer the crop comes from other hill areas
particularly Mansehra and Parachinar. Turnips receive relatively good prices in
the mid-summer period and continue till the start of the regular supply season.

5.5.2 Fruits
Orange: Pakistan is the sixth largest producer of Kinow (mandarin) and oranges
in the world, with 2.1 million tons. Pakistan world mandarin and oranges market
share during the year 1997 was 0.9 percent and 3.6 percent in terms of value and
volume respectively. Pakistan is also the largest producer of ‘Citrus Reticula’
variety (Kinow), this unique variety of citrus is indigenous to this part of the
world. According to an estimate approx. 95 percent of the total Kinow produced
all over the world is grown in Pakistan.

The soil and climatic conditions in Pakistan have given the Kinow a unique flavor
which distinguishes it from other comparable mandarins grown in the world. An
ideal condition for growing kinow includes abundance of water, rich nitrogen
content in the soil and relatively cool weather. Winter in the plains of Punjab
province provides an excellent atmosphere for this fruit and the resulting fruit is
sweet and has a very distinct taste.

Mango: Pakistan produces over 150 varieties of mango. Mango is the fruit par
excellence of Subcontinent. Pakistan is an important mango growing country in
the world. The soil and climatic conditions of Pakistan are highly suitable for
mango cultivation. According to FAO production year book of 2001, Pakistan
stands 5th among mango growing countries of the World. Mango enjoys second
position after citrus in Pakistan.

It is grown in the province of Punjab over an area of 48413 hectares out of 94121
hectares in the country (MINFAL 99- 2000). Most of the remaining acreage is
planted in Sindh. At present, (2015-16) the total annual production of fruits in
Pakistan is 6.57 million tons, of which only 674 thousand tones were exported in
2015-16. Even if all of this production reaches to the consumers, per head per day
93
availability of fruit is meagre 114 grams. Fresh and processed fruits and
vegetables export make up less than 1 percent of Pakistan’s total export. That is a
matter of concern when the need for diversification of export is badly felt. The
mango from Pakistan is well known for its taste and quality abroad. More than
53,000 tons of mangos is exported to neighboring and European countries, i.e.
Afghanistan, Bahrain, Dubai, Kuwait, Saudi Arabia, United Kingdom, France,
Malayasia and Singapore etc. fetching foreign exchange. Langra, Dusehri, Samar
Behisht, Chaunsa, Anwar Ratol are important varieties grown in Punjab. Sindhri,
Bagan Pali, Suwarneka, Neelum and Gulab Khas are leading ones from Sindh.

Watermelon: It is all time favorite fruit for most Pakistanis especially because of
its sweet and refreshing quality to combat the deadly heat. And the feeling one
gets if given the middle part, without the seeds, is quite invigorating.

Falsay: The fruit is low in sodium, fat and rich in Vitamin C and plays role in
curing some fatal diseases and are said to be good for heart. It is a shrub or small
tree growing to 8 m tall. The leaves are broadly rounded, 5–18 cm long and broad.
The fruit is an edible drupe 5–12 mm diameter, purple to black when ripe.

Peaches: Peaches are believed to be the "Queen" of fruits and have the very next
position after the apples in popularity. Fresh peach is comprised of very healthy
nutrient. It has a rich source of vitamins A and C and also contains potassium and
fiber. The Peach season usually starts in May and continues till the first week of
September. In Pakistan the environment is quite favorable for Peach production.

Peach is a traditional crop of Khyber Pakhtunkhwa province. Peach is regarded as

one of the most admired fruit grown in Khyber Pakhtunkhwa, Swat, Balochistan
and the northern areas of Pakistan including Peshawar, Parachinar, Chitral,
Hazara, Quetta, Pashin, Ziarat, Mastung, Skurdu, Hunza and Murree hills. Due to
its delicious flavor and high demand, farmers not only meet the local requirement
but also aimed at foreign markets for export.

Jamun: Native to the Subcontinent, Jamun, when sprinkled and shaken up in

black salt are so delectable that they’re hard to put down until the whole bowl is
finished. The fruit has a combination of sweet, mildly sour and astringent flavor
and tends to color the tongue purple. The seed is also used in various alternative
healing systems like Ayurveda (to control diabetes, Unani and Chinese medicine
for digestive ailments.

94
The pulp of the fruit extracts from the bark and seeds is of great benefit when it
comes to lowering of blood glucose level. Taking dried extract of the seeds orally,
greatly reduces the blood sugar and glucosuria. The leaves and bark are used for
controlling blood pressure and gingivitis. Wine and vinegar are also made from
the fruit. It has a high source in vitamin A and vitamin C.

5.6 NATIONAL AGRICULTURE RESEARCH SYSTEM OF

PAKISTAN
At present, Pakistan’s agricultural research system is organized and managed at a
level where research is required for maintenance of agriculture sector and to
increase crops yields and livestock production in future. In economy of Pakistan,
the production and productivity growth of agriculture sector are not keeping pace
with the past growing rates. For the growth of Pakistan agriculture research
system, the gap between food and fiber supply and that of food and fiber demand
in the future should be good.

In 1991 with the assistance of World Bank, the agriculture research (ARP-II)
project was launched to improve the research planning and coordination in
Pakistan agriculture research system. The principal goal of this project was to
prepare a National Master Agricultural Research Plan (NMARP). National Master
Agricultural Research Plan was completed in 1997 that embodies the Pakistan
Agricultural Research Council (PARC) institutional long-term plans along with
provincial research master plans (PRMPs) which were completed by each
province. The objective of this project was to:
(i) Review the reasons why Pakistan’s agricultural research systems needs to be
revitalized.
(ii) Review the present status of the Pakistan agricultural research system.
(iii) To find out the problems that Pakistan agriculture research system has
faced.
(iv) To conclude future agenda for Pakistan’s agricultural research system that
is based on the findings of the National Master Agricultural Research Plan.

Pakistan agricultural research system is organized at both the federal and

provincial levels. There were 74 research establishments at the federal level and
106 research institutions at the provincial level in 1990. Many agricultural
universities also conduct research in Pakistan. Pakistan agriculture Research
Corporation is the body that conduct, coordinates and promote research. The
research conducted at the federal level has been both applied and adaptive with
some long-term priority research.

95
 Expenditure on agricultural and livestock research was reported to be Rs 742
million in 1988-89. In 1992-93 these expenditures was rose up to Rs 1,099
million. The latest budget allocations for agricultural research in Pakistan for
1996-97 and the current funding environment for agricultural research in Pakistan
indicate that it may be difficult to keep future funding levels, in real terms, from
decreasing.

The Pakistan Agricultural Research Council (PARC) is in Islamabad, Pakistan.

Pakistan Agricultural Research Council is an agricultural research organization at
the national level. Its main objective is to strengthen Pakistan's agricultural
research system, comprising the federal and provincial components.

PARC has seven major research establishments in Pakistan conducting research

according to the agro-ecological needs of the regions.

 National Agricultural Research  Sugar Crops Research Institute (SRI)

Centre (NARC)
 Himalayan Agricultural Research
 Southern Zone Agricultural Research Institute (HARI)
Centre (SARC)
 Mountain Agricultural Research
 Arid Zone Research Centre (AZRC) Center (MARC)

 National Tea Research Institute

(NTRI)

96
 SUMMARY

Agriculture constitutes the largest sector of our economy. Majority of the

population directly or indirectly involved anddependent on this sector. It
contributes about 24 percent of Gross Domestic Product (GDP) and accounts for
half of employed labor force and is the largest source of foreign exchange
earnings. The first section of this unit discusses, evolution of agriculture sector
that includes plantation of different crops, introduce technological advancement
and domestication of animals etc.

In the second section a brief introduction to agriculture sector has been given.
Pakistan is the sixth largest producer of Kinow (mandarin) and oranges in the
world, with 2.1 million tons. Pakistan world mandarin and oranges market share
during the year 2019 was 2.48% and 4.6% in terms of value and volume
respectively. After this, the factor that affects agriculture sector has been
explained. Major agriculture crops which are cultivated in different climatic
regions of Pakistan have been explained. Fruits and vegetables that are sown in
different weather conditions have also been elaborated. In the last section of the
unit, the National Agriculture Research System of Pakistan has been explained.

97
 SELF-ASSESSMENT QUESTIONS

1. Define agriculture and explain the suitable physical and nonphysical factors
for the growth of agriculture.

2. What are the affecting factors of agriculture in Pakistan?

3. Describe the suitable factors for the cultivation of wheat crop and explain
the worldwide production?

4. Explain the National Agriculture Research System of Pakistan.

5. Write a detail note on Fruits and Vegetables.

6. Describe the suitable factors for the vegetative growth of rice crop and
explain its production in Pakistan.

98
Unit–6

TRANSPORTATION AND
COMMUNICATION CHANNELS

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin

99
 CONTENTS

Page #
Introduction ....................................................................................................... 101

Objectives ......................................................................................................... 101

6.1 Introduction to Transportation ................................................................ 102

6.2 Means of Transportation .......................................................................... 102

6.2.1 Land Transportation ...................................................................... 103
6.2.2 Water Transportation ..................................................................... 108
6.2.3 Air Transportation ......................................................................... 112

6.3 Importance of Transportation .................................................................. 115

6.4 Introduction to Communication ............................................................... 116

6.5 Means of Communication ........................................................................ 117

6.6 Role of Telecommunication in Economic Development ......................... 119

6.7 Logistics .................................................................................................. 119

Summary ........................................................................................................... 122

Self-Assessment Questions .............................................................................. 122

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 INTRODUCTION

In the previous unit the natural resources of Pakistan have been discussed and in
this unit transportation and communication will be describe on detail.
Transportation is the movement of goods and people from one part of a country to
another. Transport is important because it enables trade between people, which is
essential for the economic development of a country. This unit will explain the
concept of transportation and its role in flourishing economic conditions of
country. The various modes of transportation (land, water and air) will be
elaborated in detail. Similarly, the communication plays an important role in the
economic and social development of a country. This unit will also explain critical
role of communication networks in the development of trade in Pakistan.

OBJECTIVES

After reading this unit, you will able

1. to understand the concept of transportation and telecommunication.
2. to know the means of transportation
3. to know the importance of transportation
4. to know the modern electronic media& its role in the development and
progress of a country.

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6.1 INTRODUCTION TO TRANSPORTATION
Transportation is the movement of humans, animals and goods from one part of
a country to another. Transport is important, because it enables trade between
people, which is essential for the economic development of a country. The
Transportation network is directly linked with country’s economic development
because trade is possible through modern transportation.

The Transport infrastructure consists of roads, railways , airways, waterways,

canals and terminals such as airports, railway stations, bus stations, warehouses,
and seaports. The Transport acts as a bridge between producer and consumers, the
distance between goods and market decreases due to transportation. Due to
undeveloped means of transportation, the prices of commodities increased in local
market. Transportation does not affect only the economic field but also affects the
political, social and historical spheres of life.

Humans' first means of transport involved walking, running and swimming.

Inventions such as the wheel and the sled helped make animal transport more
efficient through the introduction of vehicles. The water transport, including rowed
and sailed vessels, dates back to time immoral and was the only efficient way to
transport large quantities or over large distances prior to the Industrial Revolution.

The Industrial Revolution in the 17th century saw a number of inventions

fundamentally change transport. With telegraphy, communication became instant
and independent of the transport of physical objects. The invention of the steam
engine, closely followed by its application in rail transport, made land transport
independent of human or animal muscles. Both speed and capacity increased
rapidly, allowing specialization through manufacturing being located
independently of natural resources. The 19th century also saw the development of
the steam ship, which sped up global transport. With the development of the
combustion engine and the automobile around 1900, road transport became more
competitive again, and mechanical private transport originated. The first
"modern" highways were constructed during the 19th century.

6.2 MEANS OF TRANSPORTATION

The various modes used for a movement. For each mode, there are several means
of transport.
They are:
1. Land transportation (rail, and road)
2. Water transport (coastal and ocean)
3. Air transportation

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6.2.1. Land Transportation
Land transport is divided into two major categories.
1. Roads
2. Railways

1. Roads
Road transport is most popular, and it carries about 90% of the total passenger
traffic. The country has about 248,340 kilometers of roads. Road traffic is
increasing to nearly overwhelming proportions, with mixtures of animal carts,
high-speed cars, buses, and trucks. Roads are considered very important in our
country, because different cities are connected through roads. Goods may be
transferred as early as possible through roads at their destination. In Pakistan
initially roads served as feeder to the railways. Now roads are competing railways
for all types of passengers, including long-distance.

103
(a) Estimated Length of Roads in Provinces (Kms)
The development of infrastructure pertaining to roads is crucial to economy and
socio-economic development of the country. It is not an exaggeration to suggest
that growth of several other economic sub-sector sectors depends on better roads
network for timely availability of inputs and disposal of goods and services.
During July-March FY 2017, total length of roads in Pakistan including GB and
AJK is 264,401 kilometers as compared to 263,356 kilometers over corresponding
period of last year, the table given below represents the total length of both in low
and high type in the country as given below:

Estimated Length of Roads in Provinces (Kms)

Khyber GB &
Years Punjab Sindh Balochistan Total
Pakhtunkhwa AJK
2012-13 107,805 81,358 42,980 29,655 1,590 263,415
2013-14 107,973 81,493 43,035 29,692 1,592 263,755

2014-15 107,992 81.543 43,072 29,742 1,593 263,942

2015-16 108,085 81,630 43,117 29,785 1,595 264,212
2016-17 108,155 81,681 43,151 29,817 1,597 264,401
Source: National Transport Research Centre (NTRC)

(b) National Highways

During the 1990s, Pakistan began an ongoing project to rebuild all National
Highways of Pakistan throughout the country to important financial, cargo and
textile centers. The National Highway Authority (NHA) is responsible for the
maintenance of all national highways in Pakistan.
1. The Makran Coastal Highway follows the coast of Sindh and Balochistan
provinces. It links the port cities of Karachi and Gwadar. Journey time has
been reduced to six or seven hours with the construction of the new Coastal
Highway. The highway was built as part of a plan to improve transport
facilities in southern Balochistan.
2. The Karakoram Highway is the highest paved international road in the
world. It connects China with Pakistan across the Karakoram mountain
range, through the Khunjerab Pass.
3. The Grand Trunk Road (commonly abbreviated to GT Road) is one of South
Asia's oldest and longest major roads. For several centuries, it has linked the
eastern and western regions of South Asia. It runs from western Bengal,
across north India, into Peshawar in Pakistan.

104
(c) Motorways
The construction of motorways began in the early 1990s. The idea was to build a
world class road network and to reduce the load off the heavily used national
highways throughout the country. The M2 motorway was the first motorway
completed in 1998. It links the cities of Islamabad and Lahore. Many new
motorways have opened up including the M1 motorway and M3 motorway. The
NHA has already completed three segments of Pakistan Motorway networks viz
M-1 (Peshawar-Islamabad), M-2 (Islamabad- Lahore) and M-3 (Pindi Bhattian-
Faisalabad) on a virgin corridor bringing remote areas on mainline and boosting
economic activities.

NHA is now constructing M-4 (Faisalabad-Khanewal-Multan) and Karachi-

Hyderabad Motorway (M-9) on build-operate-transfer (BOT) basis. Details of
NHA Motorways networks is presented in table given below

105
 Motorways/Expressways Projects in Pakistan
Sr.
Motorways/Expressways Length Status
No
1 M-1 (Peshawar-Islamabad) 156Km Completed
2 M-2(Islamabad-Lahore) 376Km Completed
3 Havelian-Thakot 120Km Ongoing
4 Hazara Motorway (E-35) 59Km Ongoing
5 Hakla D.I Khan 285Km Ongoing
6 Sialkot-Lahore 88Km Ongoing
7 Lahore-Multan (M-3) 230Km Ongoing
8 Faisalabad-Gojra (M-4) 58Km Completed
9 Gojra-Shorkot (M-4) 62Km Ongoing
10 Shorkot-Khanewal(M-4) 64Km Ongoing
11 Khanewal-Multan(M-4 Ext) 56Km Completed
12 Sukkur-Multan(M-4) 392Km Ongoing
13 Hyderabad-Sukkur(M-6) 296Km Procurement under process
14 Karachi-Hyderabad(M-9) 136Km Ongoing
15 Pindi Bhattian-Faisalabad (M-3) 53Km Completed
Total 2412Km

Source: Pakistan Economic Survey 2016-17

(d) Railways
The Pakistan Railways has a definite edge over road transport for long haul and mass
scale traffic movement both for passenger and freight in addition to providing a safe,
economical and environment friendly mode of transport. An effective railway system
of the country facilitates commerce and trade, reduces transportation costs and
promotes rural development and national integration. The network of Pakistan
Railways comprises of 7,791 route kilometers, 451 Locomotives (DL439 + Steam
12), 1,732 passengers coaches and 15,948 freight wagons.

Gross earning along with passenger traffic, freight carried and freight tones has
improved by 14.6 percent, 4.5 percent, 38.9 percent and 44.6 percent respectively
in FY 2016 over last Year.

106
 Earning of Pakistan Railways

Fiscal Years Earnings (Rs. Millions)

2011-12 15,444
2012-13 18,071
2013-14 22,800
2014-15 31,924
2015-16 36,581
(July-March)
2015-16 26,436
2016-17 26,268
Source: Pakistan Economic Survey 2016-17

Pakistan has allocated Rs. 41 billion in federal PSPD for the financial year 2016-
17 for the development interventions in Pakistan Railways.

Passenger and Freight traffic

2015-16 2016-17
S.
Subjects 2011-12 2012-13 2013-14 2014-15 2015-16 (July- (July-
No.
March) March)
Number of
1 passengers 41.100 41.957 47.690 52.951 520192 39.55 38.950
carried(Million)
Passenger traffic
2 16,093 17,388 19,778.560 20,288 21,201 16,333.18 17,470.35
Kms (Million)
Freight carried
3 1.323 1.016 1.610 3.600 5.001 3.65 3.82
tones(Million)
Freight tones
4 402 419 1,090.330 3,301.438 4,773.548 3,797.19 3,385.410
Kms(Million)
Gross Earning
5 15,444 18,070 22,800.217 31,924.757 36,581.865 26,436.00 26,268.070
(Rs.Million)
Source: Pakistan Railway

Major Railways Route

1. Karachi- Peshawar Railway Line
It is the main railway line in Pakistan. It is operated by Pakistan railway. It
begins from Kiamari station Karachi and ends at cantonment station Peshawar.
The total length of railway line is 1683 kilometers (1048 miles). There are 184
railway stations between Kiamari stations to Cantonment station.
Approximately 75% of the country’s cargo and passenger traffic uses this line.
Following are the important routes situated on this route are: Karachi cantt,
Landhi junction, Kotri junction, Hyderabad junction, Tando Adam junction,
Nawabshah, Rohri junction, sadikabad, khanpur junction, Multan cantt,

107
 Khanewal junction, Okara, Pattoki, Raiwind junction, Lahore, Lala Musa,
Jhelum, Rawalpindi, Taxilla cantt, Nowshera junction and Peshawar cantt.

2. Karachi to Quetta Railway line

It is also important railway line of Pakistan; it connects the port of Karachi
with various cities of Balochistan.

3. Rohri to Chaman Railway Line

The line begins from Rohri junction station and ends at Chaman station.
Length of this line is 522 kilometers (320 miles). There are 35 stations
between Chaman and Rohri station.

6.2.2 Water Transport

At the time of independence Pakistan only got three ships which were in very bad
condition, and we rely on foreign companies for imports and exports and have to
pay huge amount of foreign exchange to them. For the development of shipping
sector government decided to set up Pakistan National Shipping Corporation
(PNSC). In the beginning 31 ships were there, but with the passage of time
number of ships decrease as in 2004 there was only 13 ships are left to the PNSC.
Pakistan National Shipping Corporation (PNSC)

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At present, PNSC fleet comprises of 09 vessels of various type / size (05 bulk
Carriers and 04 Aramex tankers) with a total deadweight capacity of 681,806
metric tons being the highest ever carrying capacity since its inception.

Financial Performance of PNSC (Rs. In billion)

July-March
Financial Result 2012-13 2013-14 2014-15 2015-16
2015-16 2016-17
Revenues 12.3 15.7 15.5 12.5 9.6 9.1
Expenditures 8.9 12.3 12.5 9.00 6.7 6.6
Profit before Taxation 3.4 3.4 3.2 2.5 2.9 1.8
Source: Pakistan Economic Survey 2016-17

Water transportation is important for handling large quantity of goods and

passengers. The inland waterways along rivers are not as developed as seaports.
Seaport handle major portion of international trade. At present there are three
major ports in Pakistan
1. Karachi Port
2. Port Muhammad Bin Qasim
3. Port of Gwadar

1. Karachi Port
Karachi port is one of the South Asia’s largest seaports. It is located at Indus delta
on the Arabian Sea coast. The port presently handles 60percent of the country’s
trade through its operations within the port limits defined by the federal
government. The geographic position of port places it in close proximity to major
shipping routes such as the Strait of Hormus. The administration of the port is
carried out by the Karachi Port Trust. The port comprises a deep natural Harbour
with an 11-Kilometer-long approach channel which provides safe navigation for
vessels up to 75000 tonnes deadweight.

The main areas of port activity are two wharves: East Wharf with seventeen
vessel berths and West Wharf with thirteen vessel berths. The depth alongside the
berths is currently 11.3 meters.

Karachi international Container Terminal opened in 1996 at West Wharf berths

28-30. It has a handling capacity of 300,000 TEUs per annum.

Pakistan international Container Terminal in 2002 at East Wharf berths 6-9. It has
a handling capacity of 350,000 TEUs per annum.

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 Cargo Handled at Karachi Port Trust (in 000Tonnes)
Period Exports Imports Total
2011-12 11,674 26,201 37,875
2012-13 12,150 26,700 38,850
2013-14 11,007 30,343 41,350
2014-15 10,422 33,000 43,422
2015-16 9,786 40,259 50,045
2016-17 7,462 31,560 39,022
Source: Karachi Port Trust Website

2. Port Muhammad Bin Qasim

Port Qasim Authority was established in 1973 and develops a new port that serves
industrial sector as well general cargo. It is also known as port Qasim. The Qasim
port is located in Karachi Sindh on the coastline of the Arabian Sea. It handles
35% of the nation’s cargo. The port encompasses a total area of 12,000 acres
where in most of industrial zones operate.

Commercial Activities (Million Tonnes)

Period Imports Exports Total
2012-13 17.754 7.047 24.801
2013-14 18.076 7.699 25.775
2014-15 21.608 8.405 30.014
2015-16 25.857 7.464 33.321
2016-17 21.604 5.072 26.676

3. Port of Gwadar
Gwadar is the first port on the south western Arabian Sea coastline in Baluchistan,
about 635 km from Karachi and 120 km from the Iranian border by road. Gwadar
Port is located just outside the Strait of Hormuz, near the key shipping routes
from Arabian Gulf to Far East and Europe. Gwadar Port is strategic warm water.
Deep-sea port and phase-1 of the port has been developed jointly by Government
of Pakistan and the Government of the Peoples Republic of China with a total cost
of US$ 288.0 million, the port was inaugurated in March 2007.

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1. Port Ormara
Ormara is a town in Gwadar District in Balochistan province of Pakistan. It is a
port city located in Makran coastal region. However, after construction of Makran
Coastal Highway and Jinnah Naval base life has taken a positive change for the
locals with many local industries and the resultant increase in jobs for locals.
Ormara has a port and fish harbour. The Jinnah Naval base of the Pakistan Navy
is located at Ormara.

2. Port Pasni
The Port Pasni is located in Pasni City in the Balochistan Province of Pakistan.
The facilities include modern fish harbour, port and naval base for the Pakistan
Navy.

Dry Ports
A dry Port is an inland intermodal terminal directly connected by road or rail to a
Seaport and operating as a center for the transshipment of sea cargo to inland
destinations. In addition to their role in cargo transshipments, dry ports may also
include facilities for storage of goods, maintenance for roads and rail cargo
carriers and custom clearance services. A dry port can speed the flow of cargo
between ships and major land transportation. Dry port can also improve the

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movement of imports and exports. There are numbers of dry ports in Pakistan
which are as:

List of Dry ports in Pakistan

At present there are six dry ports running under the management of Pakistan
Railways.
1. Lahore Dry Port Established in 1973.
2. Karachi Dry Port Established in 1974.
3. Quetta Dry Port Established in 1984.
4. Peshawar Dry Port Established in 1986.
5. Multan Dry Port Established in 1988.
6. Rawalpindi Dry Port Established in 1990.
7. Islamabad Dry Port – H-9

In addition to the above, there are four Dry ports established and running under
the management of private sector.
1) Sialkot Dry Port Established in 1986.
2) Faisalabad Dry Port Established in 1994.
3) Pak-China Sust Dry Port.
4) NLC Dry Port at Thokar Niaz Beg Lahore.
5) NLC Dry Port at Quetta.

6.2.3 Air Transportation

Pakistan has air link with many countries the world. It relates to most Middle East
countries through air. It has air services with USA, European countries, Nepal, Sri
Lanka, Bangladesh, Malaysia, Singapore, Thailand, China, Hong Kong and Japan.
In 1947, there was only three small air companies working in Pakistan, but these
were too small to meet the growing needs of country. In 1955 Government set up
Pakistan International Airline (PIA) to meets the needs. In 1990 government
changed its policy and allows private sector airlines. The private airlines did very
well to compete with the well-established flag carrier, PIA which was controlled
by the government.

PIA fleet consists of the following type of aircraft

 Boeing 777
 Boeing 747
 Airbus A310
 Airbus A320
 ATR42 & ATR72

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Other private Airlines operating in Pakistan are as Air Blue, Shaheen Air, Pearl
Air, Askari Aviation, Vision Air International.

Airports in Pakistan
1. Jinnah International Air Port Karachi
Jinnah international airport is the Pakistan’s largest and busiest international and
domestic airport. It is located in Karachi, Capital of Sindh Province. It is named
after Muhammad Ali Jinnah, the founder of Pakistan. It is run by Civil Aviation
Authority (CAA). The airport is equipped with aircraft engineering and
overhauling facilities. In 2015-2016, 6,196,903 passengers used the airport and
there were 55,461 aircraft movements.

2. Allama Iqbal International Airport Lahore

Allama Iqbal international airport is the second largest airport in Pakistan serving
Lahore, capital of province of Punjab and also large portion of travelers from the
Punjab. It was originally named as Lahore international airport but renamed after
Allama Iqbal one of the pioneers that led to the creation of Pakistan. A total of
4,724,629 passengers travelled in 2016.

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3. Benazir Bhutto International Airport Islamabad
Benazir Bhutto international airport is the third-largest airport in Pakistan, serving
the capital Islamabad and its twin city Rawalpindi in the province of Punjab.
Previously known as the Islamabad international Airport, it is renamed after the
late Pakistani leader Benazir Bhutto on 21june 2008. The airport is located
outside Islamabad, in the area of Chaklala Rawalpindi. Being the main airport for
the Pakistan capital it often hosts officials and citizens from other nations. The
airfield is shared with the transport and liaison squadrons of the Pakistan Air
force. In 2018, the airport was shifted near Islamabad Motorways interchange, 20
km west from the zero point, Islamabad.

4. Bacha Khan International Airport Peshawar

Bacha Khan International Airport is the fourth busiest airport which was
previously known as Peshawar International Airport. It is in Peshawar, the Capital
City of Khyber Pakhtunkhwa. A total of 1,578,319 passengers travelled in the
year 2017-18 and about 7,646 metric tons cargo was handled through the Air Port.
It was reconstructed and renovated in 2016 to 2018.

5. Faisalabad International Airport

Faisalabad international airport is an international airport and stand by Pakistan
air force, Military base situated on Jhang road 10km south west from the city of
Faisalabad in the province of Punjab. It serves the population of Faisalabad and
other local cities. With the new policy agreement with the UAE it is expected that
the airport will handle more traffic in future.

6. Quetta International Airport

It is located in Quetta the province of Baluchistan. The airport is also operating
International flights. Average scheduled flights 1332, non- scheduled flights are
247 in a year.

7. Sialkot International Airport

Sialkot International Airport is situated 14 Km west of Sialkot in the Sialkot
District of Pakistan. It has the distinctions of being the first privately owned
public Airport in Pakistan and South Asia. Sialkot is a major export hub of
Pakistan. The airport is being upgraded to make it compatible to carry the load of
ten Boeing 747s or A340s.

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6.3 IMPORTANCE OF TRANSPORTATION
Transportation helps in creation of new markets. Transportation plays very vital
role in economic development of country. Importance of transportation is as
follows:
1. Growth of industries. Due to transportation product requires quick
marketing are timely arrived in market for consumer. These includefishes,
perishable goods and vegetables etc, which leads to growth in that industry.
2. Creation of place utility. Transport creates place utility. Due to
geographical and climatic factors industries are located at places which are
far away from customer, but due to transport goods are available for
customer at near market.
3. Creation of time utility. Transport creates time utility, because goods are
reached to ultimate customers at time due to speedy transport.
4. Stable prices. Transport helps in stabilization of prices. Transportation
influence prices of goods by moving goods from surplus to deficit areas; it
helps to balance the supply and demand factors.
5. Globalization. Transport enables the customer to enjoy the benefits of goods
that are not produced locally, which leads to improve the standard of living.
6. Competition increased. Due to transport level of competition increases.
Goods are available and prices reduce. Advantages of large scale-production
are only possible through transportation.

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7. Mobility of factors of production. Transport enables the mobility of
Labour and capital. People move from one place to other in search of job.
Capital (Machinery) is transported from other countries for production
purpose through transport.
8. Bring countries closer. No country is self-sufficient. Every country has to
depend upon other country. Transportation brings countries closer. Goods
are easily imported and exported according to requirements.
9. Employment opportunities. Transport contributes to economic development
through creation of employment opportunities for people. It creates both
direct and indirect jobs.
10. Agriculture development. Transport has helped in the development of
agriculture sector. The business of agricultural products has grown to such a
large extent only due to the efficient means of transport.
11. Industrial Development. Transport facilitates the industrial development of
a country. It helps the growth of industries by making available various
factors of production. Mobility of factors of production is only possible
through transport.

6.4 INTRODUCTION TO COMMUNICATION

The Communication plays an important role in the economic and cultural
development of a country. The Telecommunication is the transmission of
signals, words, writings, images and sounds or information of any nature by wire,
radio, optical or other electromagnetic systems. Telecommunication occurs when
the exchange of information includes the use of technology. It is transmitted
either electrically over physical media, such as cables, or via electromagnetic
radiation.

Early means of communicating over a distance included visual signals, such as

beacons, smoke signals, semaphore telegraphs, signal flags, and optical
heliographs. A revolution in wireless communication began in the first decade of
the 20th century with the pioneering developments in radio communications by
Guglielmo Marconi. At present television and radio are considered as modern
electronic media, because they are major mass media. On the other hand, they
also form group of advertising commercial media. Pakistan enjoyed services of
telephone, cable, telegram and radio etc. from its beginning.

Communications in Pakistan describes the overall environment for the growing

mobile telecommunications, telephone, and Internet markets in Pakistan. In 2008
Pakistan was the world's third-fastest growing telecommunications market.

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Telecommunication and the Government of Pakistan
The government of Pakistan controls the telecommunications through number of
departments. In the beginning Telegraph and telephone was done that working. In
1990 Pakistan Telecommunication Corporation was established and replaces
Telegraph and telephone.
Pakistan Telecommunication Corporation department was transformed into
i. Pakistan Telecommunication Company limited (PTCL)
ii. Pakistan Telecommunication Authority (PTA)
iii. National Telecommunication Corporation (NTC)

Pakistan Telecommunication Corporation limited (PTCL): Pakistan Telecom-

munication Corporation is a company established to provide telecommunication
services to customers on commercial basis.

Pakistan Telecommunication Authority (PTA): Pakistan Telecommunication

Authority is a regulatory body responsible for monitoring the telecommunication
business in Pakistan; it controls mobile phone companies, and internet service
providers.

National Telecommunication Corporation (NTC): National Telecommunication

Corporation is responsible to control and provides telecommunication services to
the departments of government.

6.5 MEANS OF COMMUNICATION

The dynamically evolving Information and Communication Technologies (ICTs)

hold crucial importance globally as one of the key sectors in terms of powering
economies, acting as a catalyst of change and enablement across all other sectors.
Communication plays an important role in the economic and cultural development
of a country. Pakistan has following means of communication:
1. Postal Service
2. Television
3. Radio
4. Information Technology (IT)
5. Telecommunication

1. Postal Service
Pakistan post office is one of the oldest government departments in the sub-
continent. In 1947 it began functioning as the department of Post & Telegraph. In
1962 it was separated from Telegraph & Telephone and started working as an
independent attached department.

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Pakistan Post is providing postal services in every nook and corner of the country
through the network of around 13000 post offices. Pakistan post providing
delivery services to about 20 Million households and businesses without any cost.
It also provides the facility of postal life insurance, collection of electricity, Gas
and telephone bills, collection of taxes and saving bank. Other private companies
engaged in postal services are TCS, Leopards Courier, OCS Pakistan PVT LTD,
FedEx Express, DHL EASYSHIP, and Skynet Worldwide Express.

2. Television
The First television station was introduced in Pakistan by a private television
company, in November 26, 1964. On June 27, 1967, it was converted in to public
limited company and named as Pakistan Television Corporation Limited. The
main objectives to establish a Television Network in Pakistan is for the provision
of broadcasting news, education, entertainment and documentaries. There are five
channels in the country owned by government namely PTV Home and PTV
Global, PTV National, PTV News, and PTV World. There are also operating
many private TV channels across the country which are as

Urdu General Entertainment

ARY Digital, ATV, Geo Entertainment, Hum TV, A-Plus Entertainment, Aaj
Entertainment, Express Entertainment, See TV, TV one and Urdu 1 etc.

Religious Channels
ARY QTV, Haq TV, and Madani Channel etc.

News Channels
92 News HD Plus, Aaj News, ARY News, BOL News ULTRA HD, Express
News, Geo News, Dunya News and many others.

Sports Channels
Geo Super, PTV Sports and Ten Sports Pakistan

3. Radio
Pakistan Broadcasting Corporation also known as Radio Pakistan is a public radio
broadcasting network. PBC provides a wide range of radio and news services
within and outside Pakistan in 10 different languages with the objectives to
entertain people, educating the overseas audience about Pakistan.

1. Information Technology (IT)

IT has assumed unprecedented importance in the global economy. Government
has accorded a very high priority to this sector. IT is one of the key determinants
of competitiveness and growth of economic development. In Pakistan the IT
industry is regarded as a successful sector of economy. As of 2011, Pakistan has
over 20 million internet users and is ranked as one of the top countries that have
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registered a high growth rate in internet penetration. Pakistan enjoys good
international telecommunications links via satellite.

Internet is a giant network of thousands of regional computer networks spread

around the globe and each computer network is again the collection of
individually controlled geographically scattered but interconnected computers.
With the emergence of Internet, the people of the world have come closer to each
other and world becomes global village where distance does not matters.

2. Telecommunication
The government of Pakistan controls the telecommunications through a number of
departments. In the beginning Telegraph and telephone was done that working. In
1990 Pakistan Telecommunication Corporation was established and replaces
Telegraph and telephone.

On 1st January 1996, the corporation was recognized by establishing the Pakistan
Telecommunication Authority (PTA), the National Telecommunication Operation
(NTC) and Pakistan Telecommunication Company Limited (PTCL). PTCL has
issued 65,000 telephone connections to its customers. Four Mobile companies are
operating their network in Pakistan under PTA.

6.6 ROLE OF TELECOMMUNICATION IN ECONOMIC

DEVELOPMENT
1. National income increase Telecom sector has been contributing to the
national income in terms of taxes, regulatory fee and activation tax etc.
2. Economic importance It promotes the internal and external trade,
utilization of available natural resources, mobility of factors of production,
reduction in unemployment, increase in agricultural production, increase in
industrial development, reduction in population pressure and elimination of
starvation and hunger etc.
3. Political importance It creates the political awareness in people,
maintenance of law and order in society etc. It also helps bringing out the
opinion of the masses.
4. Social importance Linkage of people develops brotherhood and sense of
unity, and this can stimulate economic activity within the country. It
promotes the education across the country and provides the modern
information by TV, Internet, radio etc.

6.7 LOGISTICS
Logistics is generally the detailed organization and implementation of a complex
operation. In a general, logistics is the management of the flow of goods between

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the point of production and the point of consumption in order to meet needs of
customers or corporations. The resources managed in logistics can include
physical items such as food, materials, animals, equipment, and liquids; as well as
abstract items, such as time and information. The logistics of physical items
usually involves the integration of information flow, material handling,
production, packaging, inventory, transportation, and often security.

In simple terms, "logistics" means having the right amount of a good at the right
time, getting it to the appropriate location in proper condition and delivering it to
the correct customer. Logistics is a web that links to businesses in every sector.
The goal is to manage the fulfillment of each customer, moving quickly and
efficiently from one section of the supply chain to the next.

In military science, logistics is concerned with maintaining army supply lines

while disrupting those of the enemy, since an armed force without resources and
transportation is defenseless. Military logistics was already practiced in the
ancient world and as modern military have a significant need for logistics
solutions, advanced implementations have been developed. In military logistics,
logistics officers manage how and when to move resources to the places they are
needed.

Logistics Management is the part of supply chain management that plans,

implements, and controls the efficient, effective forward, and reverses flow and
storage of goods, services, and related information between the point of
production and the point of consumption in order to meet customer's needs. The
complexity of logistics can be modeled, analyzed, visualized, and optimized by
dedicated simulation software. The minimization of the use of resources is a
common motivation in all logistics fields. A professional working in the field of
logistics management is called a logistician.

Inbound Logistics is one of the primary processes of logistics concentrating on

purchasing and arranging the inbound movement of materials, parts, or finished
inventory from suppliers to manufacturing or assembly plants, warehouses, or
retail stores.

Inbound logistics is an integral element of business operations for a

manufacturing firm, involving the processes of receiving, storing and distributing
raw materials for use in production.

Outbound Logistics is the process related to the storage and movement of the
final product and the related information flows from the end of the production line
to the end user.

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Given the services performed by logisticians, the main fields of logistics can be
broken down as follows:
Procurement Logistics consists of activities such as market research,
requirements planning, make-or-buy decisions, supplier management, ordering,
and order controlling.
Advance Logistics consists of the activities required to set up or establish a plan
for logistics activities to occur.
Distribution Logistics has, as main tasks, the delivery of the finished products to
the customer. It includes order processing, warehousing, and transportation.
Disposal Logistics has as its main function to reduce logistics cost(s) and enhance
service(s) related to the disposal of waste produced during the operation of a
business.
Reverse Logistics denotes all those operations related to the reuse of products
and materials. The reverse logistics process includes the management and the sale
of surpluses, as well as products being returned to vendors from buyers.
Green Logistics describes all attempts to measure and minimize the ecological
impact of logistics activities. This includes all activities of the forward and
reverse flows.
RAM Logistics It combines both business logistics and military logistics since it
is concerned with highly complicated technological systems for which Reliability,
Availability and Maintainability are essential, e.g. weapon systems and military
supercomputers.
Asset Control Logistics: companies in the retail channels, both organized
retailers and suppliers, often deploy assets required for the display, preservation,
promotion of their products. Some examples are refrigerators, stands, display
monitors, seasonal equipment, poster stands & frames.
Emergency Logistics is a term used by the logistics, supply chain, and
manufacturing industries to denote specific time-critical modes of transport used
to move goods or objects rapidly in the event of an emergency.
Production Logistics describes logistic processes within a value adding system.
Production logistics aims to ensure that each machine and workstation receives
the right product in the right quantity and quality at the right time. Production
logistics can operate in existing as well as new plants: since manufacturing in an
existing plant is a constantly changing process, machines are exchanged and new
ones added, which gives the opportunity to improve the production logistics
system accordingly.

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Construction Logistics is known to mankind since ancient times. The various
human civilizations tried to build the best possible works of construction for
living and protection. Now the construction logistics emerged as vital part of
construction industry.

Digital Logistics is driven by a new generation of web-based, enterprise logistics

applications that enable collaboration and optimization, leveraging a central
logistics information backbone that provides visibility across the enterprise and
extended supply chain.

SUMMARY

Transport infrastructure consists of roads, railways, airways, waterways, canals

and terminals such as airports, railway stations, bus stations, warehouses, and
seaports. The Industrial Revolution in the 17th century saw a number of inventions
fundamentally change transport. With telegraphy, communication became instant
and independent of the transport of physical objects. The various modes used for
the movement are land, water and air transportation. Whether it is to purchase and
bring raw materials or it is to distribute finished goods, one or the other means of
transport is necessary. Transportation helps in creation of new markets.

In the second part of unit, the importance of communication and its critical role in
economic and cultural development of Pakistan has been discussed. Similarly, the
dynamically evolving Information and communication Technologies (ICTs) hold
crucial importance globally as one of the key sectors in terms of powering
economies, acting as a catalyst of change and enablement across all other sectors.
Means of communication includes Postal Services, Television, Radio,
Information Technology (IT) and Telecommunication.

SELF-ASSESSMENT QUESTIONS

1. Describe the importance of means of Transportation and Communication?

2. Write a note on means of transport in Pakistan.
3. Define Communication and discuss the role of telecommunication in
economic development.
4. Write down importance of Highway, motorways and railways of Pakistan.
5. Write a detail note on logistics.

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Unit–7

INDUSTRIES AND
MANUFACTURING

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin

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 CONTENTS

Page #
Introduction ....................................................................................................... 125

Objectives ......................................................................................................... 125

7.1 Evolution of Industries ............................................................................. 126

7.2 Factors Influencing Industrial Location .................................................. 126

7.3 Classification / Types of Industries.......................................................... 129

7.4 Heavy Industries of Pakistan .................................................................. 130

7.5 Major Economic Zones of Pakistan ......................................................... 134

Summery .......................................................................................................... 138

Self-Assessment Questions ............................................................................... 138

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 INTRODUCTION

Industry is the production of goods or related services within an economy.

Industrial Sector is of great importance for economic development of a country. It
is historical fact that countries with strong industrial sector have showed more
economic growth and improvement in national income and promote living
standard of population. This unit will introduce the evolution of industrial sector
in Pakistan. Factors Influencing Industrial location and with the passage of time
Pakistan utilized the available domestic resources as well as external for rapid
development of industrial sector. Availability of Raw material is the most
dominant factors in localization of industries. Heavy industries of Pakistan and
major economic processing zones and their importance will be elaborated.

OBJECTIVES

After reading this unit, you will able:

1. to know the factors for localization of industries
2. to list down the types of Industries
3. to understand the heavy industries of Pakistan
4. to know the concept of special economic zones/industrial zones/export
processing zones

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7.1 EVOLUTION OF INDUSTRIES
In 1947 at the time of partition Pakistan had negligible industrial base. Out of 950
industries in British India Pakistan only got 35 industries which are 3.86% of the
total industries established in Subcontinent. The rest were located in India. The
industries which came into Pakistan’s share were comparatively small, these
industries included small sugar mills, cotton gaining factories, flour mills and rice
husking.

In 1947 industrial conference of Pakistan suggested setting up more industries,

which use locally produced raw material. Industrial Finance Corporation and an
industrial investment and credit corporation were set up in 1948 by Pakistani
government. The contribution of industrial sector was 6% to Gross domestic
product (GDP) in 1950.

In 1952 the Government established Pakistan industrial Development Corporation

(PIDC) purpose of this institution was to invest in those industries which required
heavy initial investments. PIDC had completed 59 industries by 1971. A large
number of new industries were established, and production of existing industries
also expanded, due to export bonus scheme in 1958 exports were also boost up.

In 1960’s there was shift in the establishment of consumer goods to heavy

industries. The share of Industries to Gross National Product (GNP) went up to
11.8%. The industrial performance of industrial sector during 1971 to 1977 was
disappointing in terms of exports and production. One wing of the country was
forcibly separated due to suspension of foreign Aid and exports the annual growth
rate fell to 2.8% in the industrial sector.

From 1977 to 1980, the Government initiated a large number of measures to

reform industrial sector. The private sector was encouraged to invest in large scale
industries. Growth rate was 8.9% in 1990. Industry is the second largest and
important sector in the economy accounting for 25% of the GDP. It comprises of
large to middle scale manufacturing, mining & quarrying construction, electricity
& Gas distribution.

7.2 FACTORS INFLUENCING INDUSTRIAL LOCATION

Generally, location of industries is influenced by economic and geographical
factors. Cost minimization of cost and maximization of profit is ultimate goal in
the selection of location for industries. There are several factors which pulls the

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industry to setup in particular place/location. Some major factors influencing
industrial location are as follows.

1. Raw Materials
Availability of Raw material is most dominant factors in localization of industries.
No industry can develop without timely supply of raw material. The establishment
of industry in particular area is more profitable if it is located in raw material
producing area. Nearness to the sources of raw materials would reduce the cost of
production of the industry. The industry situated far away from raw material
production area cost will be higher and it is not possible to compete with other
industries. Raw materials include gold, tin, oil, uranium, bauxite, etc. When they
are present, they attract industries at that place. Iron smelting, brick making,
cement manufacturing are best examples.

2. Labor
Adequate supply of cheap and skilled labor is necessary for the running of
industry. Labor in a region is an important factor influencing the localization of
industries. If skilled labor is not available within country, then skilled labor is
imported from foreign countries which lead to increase in production cost. Now
industries are tending to concentrate in those areas where supply of labor is
available.

3. Market Access
Access to markets is an important factor influencing the localization of industries,
which the entrepreneur must take into consideration. Industries deals in perishable
goods which cannot be transported over long distance required near markets to
time sold out in market. Industries situated near the markets could be able to
reduce the cost of transportation. If the market is quiet far away from the place of
production transport costs will be high which will lead to raise the selling price of
product in market. It will be difficult to compete with other products and to attract
customers.

4. Capital
Development of industries requires a large capital investment. It may come from
any source, local or foreign. Finance is the lifeblood of any industrial venture.
Availability of adequate funds at low rates of interest is a dominant factor
influencing localization of industries. Capital is required for settling of new
industries and also for expansion of already running industry. Industry requires
enough capital for its establishment, that’s why many countries are not able to
establish industry for transforming their own minerals.

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5. Climate
Climate also plays a part in the location of industries. Climate determines the
laborer’s power of work, efficiency and economy of the products. It influences the
manufacturing e.g. Moist/ Humid climate is suitable for cotton, textile industry
while dry weather is suitable for flour mills industries. The stimulating cool
temperate climate is more suitable for the development of industries.

6. Power
Another factor influencing the location of an industry is the availability of cheap
power. Water, wind, coal, gas, oil and electricity are the chief sources of power.
Concentration of iron and steel industry near the coalfield to lower the production
cost. An adequate supply of power and fuel is an important factor for the
uninterrupted operations of any enterprise.

7. Transport Facilities
Transport facilities influence the location of industry. The modes of transportation
(Road, Water and Air) collectively plays very important role. So, the junctions’
point of these major modes becomes the centers of industrial activity. Industries
depend upon efficient and cheap transportation system, which is essential for the
movement of raw material as well as the finished products to their ultimate
customers timely.

8. Personal Preferences
In deciding location of industrial units, sometimes an entrepreneur may have
personal preferences and prejudices in the setting up of an industry in particular
area. In a democratic set up, sometimes political matters also initiate the
establishment of certain heavy industries in certain regions. Mr. Ford started
manufacturing motor cars in Detroit because it was his hometown.

9. Government’s Incentive
Industry develops from an area where the assistance of the local government can
be found. In order to give boost to industries in the country, the government gives
incentives to industrialists, i.e. Low rate of interest, tax exemptions, banking
facilities, electricity at concessional rates, subsidies, rail link etc.

10. Site Requirements

Some modern industries require particular types of site. The government has
classified some areas as backward areas where the entrepreneurs would be
granted various incentives like subsidies, or provision of finance at concessional
rate, or supply of power a cheaper rate etc. For example, an integrated steelwork

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needs a large area of flat land, while a chemical plant may need a site where it is
possible to dispose easily of dangerous waste.

11. Miscellaneous Factors

Miscellaneous factors like historical incidents and attitude of the community plays
a dominant role in location of industries. Further, the size of and industrial unit
would also have much influence in choosing location, because the size of
industrial units depends upon the circle within which they can profitably
distribute their goods within circle.

7.3 CLASSIFICATION / TYPES OF INDUSTRIES

1. Primary Industry
An industry involved in extraction and collection of natural resources, such as
Agriculture, farming, forestry, fishing, horticulture, etc. A company in a primary
industry can also be involved in turning natural resources in to final products.

2. Genetic Industry
The word ‘genetic’ means hereditary. Genetic industries are engaged in re-
production, multiplication and breeding of certain spices of plants and animals
with the object of earning profit from their sale e.g. plant nurseries, forestry, cattle
rearing, poultry, cattle breeding, etc.

3. Extractive Industry
Extractive industry is concerned with extraction of material from the Earth Sea
and air. It includes raising and collection of natural products of the soil for the
subsistence of human beings. Generally, products of extractive industries come in
raw form and they are used by manufacturing and construction industries for
producing finished products. E.g. mining industry, coal mineral, oil industry, iron
ore, extraction of timber and rubber etc.

4. Manufacturing Industry
Manufacturing industries are engaged in transforming raw material and semi-
finished goods into finished product. Manufacturing process converted extracted
articles from soil, air and water into goods that are useful for consumers e.g.
Textiles, Engineering, Chemicals, Sugar industry, and paper industry etc.
Manufacturing industry may be sub-divided into following:
i. Analytical Industry
ii. Synthetically Industry
iii. Processing Industry
iv. Assembling Industry
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5. Construction Industry
Construction industries take up the work of construction of buildings, bridges,
roads, tunnel, dams, canals, etc. This industry is different from all other types of
industry because in case of other industries goods can be produced at one place
and sold at another place. But goods produced and sold by constructive industry
are erected at one place.

6. Service Industry
The industry that earns profit through gave services. In modern times service
sector plays an important role in the development of the nation. The main
industries, which fall under this category, include hotel industry, tourism industry,
entertainment industry, etc.

7.4 HEAVY INDUSTRIES OF PAKISTAN

Industry refers to that sector which is involved in manufacturing and production.
Heavy Industry includes following:

1. Textile Industry
Pakistan has an inherent advantage of being 4th largest producer of cotton in the
world with a huge potential to further increase crop yield. For success of any
export led industry, local availability of basic raw material is an added advantage
being a key factor in reducing cost of doing business. The textile value chain
consists of multiple industrial sub-sectors. The value chain is quite long starting
from cotton picking to finished garments of the latest fashion. The end product of
one sub-sector is the raw material for the other. Each sub-sector in the value chain
contributes to value addition and employment generation. As the change moves
downstream, each link creates larger number of jobs with relatively lower
investments.

Textile is the most important manufacturing sector of Pakistan and has the
longest production chain, with inherent potential for value addition at each
stage of processing, from cotton to ginning, spinning, fabric, dyeing and
finishing, made-ups and garments. The sector contributes nearly one-fourth of
industrial value-added and provides employment to about 40 percent of
industrial labor force.

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 Export of Pakistan Textiles (US$ Millions)

2016-17
Textile 2013-14 2014-15 2015-16
Jul-Mar
Cotton & Cotton textiles 13348 13139 12168 9112
Synthetic textiles 383 331 288 167
Sub Total textiles 13731 13470 12456 9279
Wool & woolen textiles 125 119 98 61
Total textiles 13856 13589 12553 9340
Total exports 25131 23885 20802 15119
Textile as % of Exports 55 57 60 62

Ancillary Textile Industry

i. Cotton Spinning Sector
ii. Cloth Sector
iii. Textile Made-Up Sector
a) Hosiery Industry
b) Readymade Garment Industry
c) Towel Industry
d) Canvas
iv. Synthetic textile fabrics
v. Woolen industry
vi. Jute industry

Sugar Industry
The sugar industry plays an important role in the economy of the country. It is the
second largest industry after textiles. The output of sugar as well as the production
of sugarcane increased at an average rate 24 percent and 11.7 percent. At the time
of independence in 1947, there were only two sugar factories in Pakistan. The
output of these factories was not sufficient for meeting the domestic requirements.
The country started to import sugar from other countries and huge foreign
exchange was spent on this item. So, to meet the requirements of sugar the
Government setup a commission in 1957 to frame a scheme for the development
of sugar industry. At present there are 76 sugar mills operating in Pakistan.

Cement Industry
The main raw material for cement industry is lime stones, followed by a substantial
quantity of gypsum. Fortunately, Pakistan has large quantity of both and also large
domestic market. At the time of independence only few industries were fell in
Pakistan share. The requirements/ Demand for Cement were increasing day by day
due to developing projects. In order to meet the requirements, cement industry have

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been set up in public and private sector. Few years back we were self-sufficient in
cement production and also exported it to other countries. Before 1972 all cement
industries were under private control but after nationalization all industries were
given under the control of a Corporation named Pakistan State Cement Corporation.
The following are the cement factories situated in Pakistan.
 D.G Khan Cement Company
 Luck Cement Company
 Askari Cement Limited
 Maple Leaf Cement
 Attock Cement Limited
 Pioneer Cement
 Kohat Cement Company
 Thatta Cement Company Limited
 Dewan Cement
 Fauji Cement

Cement dispatches reached historic heights in March 2017 touching almost 4

million tons as the factories utilized their full production capacity to meet robust
demand in the local market. The ever-increasing domestic market has vindicated
the manufacturers thrust onadding new capacities. The cement industry isplaying
its due role to get the momentum going and in April 2017 the industry dispatched
3.576million tons of cement against 3.551 million tons dispatched during the
corresponding month of last year.

Cement Production Capacity & Dispatches (Million Tonnes)

Capacity
Production Local Total
Years Utilization Exports
Capacity Dispatches Dispatches
(%)
2103-14 44.64 76.79 26.15 8.14 34.28
2014-15 45.62 77.60 28.20 7.20 35.40
2015-16 45.62 85.21 33.00 5.87 38.87
2016-17 46.39 87.64 29.87 4.01 33.88

Source: All Pakistan Cement Manufacturers Association (APCMA)

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2. Chemical Fertilizer Industry
Because Pakistan has an agriculture based economy, the chemical fertilizer
industry is very vital for the survival. The fertilizer industry is an integral part of
Pakistan’s economy. The Pakistan fertilizer industry produces imports and
distributes various types of fertilizers. The government has pursued a policy of
supporting the industry in the form of feed gas subsidies, GST relaxation and
increasing support prices for commodities. There are ten urea manufacturing
plant, one DAP, three NP, three SSP, two CAN and one plant of blended NPKs
having a total production capacity of 8,983 thousand metric tons per annum.

Although, the installed production capacity for all products has attained the level
of 8,983 thousand tons per annum, the actual production for all products remained
at 8,015 and 8,065 (estimated) thousand product tones for 2015-16 and 2016-17
respectively. The entire fertilizer products are manufactured by the private sector.
At present, the installed production capacity (6,323 thousand tones) of urea
fertilizer is more than the national demand of about 6,000 thousand tons per
annum. The annual production of urea for 2016-17 is estimated as 5,900 thousand
tones, which is less by 6.7 percent of installed capacity of urea fertilizer. Major
chemical and fertilizer industries are as follows:
 Dawood Hercules
 Fauji Fertilizer
 Pak Arab Fertilizer Company
 Fatima fertilizers private limited
 Engro Chemical Fertilizer Company Limited

3. Sports Industry
Pakistan is one of the greatest exporters of sports items. Almost all the goods of
sports are exported outside the Pakistan because there is a very high demand of
Pakistan’s goods of sports in every country of the world. In Pakistan almost all
sports related items are produced but the famous products are soccer ball, cricket
bat, cricket ball, tennis ball etc. Sports industry of Pakistan has even
manufactured the soccer ball for the FIFA World cup of the year 1994.

The sports industry of Pakistan lies in the city of Sialkot which is a part of the
province of Punjab. All the items of sports of the best quality are manufactured in
the city of Sialkot and sports industry in Sialkot is the main factor of Sialkot’s
economy as it earns great profit from it due to the high demand of sports good in
international market. All other goods related to the sports are also produced in the
sports industry of Pakistan like sports bags, sports jackets, sports cap etc.

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7.5 MAJOR ECONOMIC ZONES OF PAKISTAN
Since independence, Pakistan has been focusing on its industrial development. In
1952, Pakistan Industrial Development Corporation (PIDC) was established to
encourage industrial growth that work successfully till 1970.
Special Economic Zone
A Special Economic Zone (SEZ) is a specific area of the land used to promote
industrial growth in a country by providing moderate economic and tax policies.
Government of Pakistan has promoted five industrial estates such as Khairpur Special
Economic Zone, Rashkai Economic Zone, Marden and Hattar Economic Zone.
i. Khairpur Special Economic Zone
Khairpur special economic zone has been established by the government of Sindh
at 140 Acres of land, to facilitate industrialization in Pakistan. The KSEZ is
envisioned to provide best in class infrastructure and facilities & services to local
and foreign entrepreneurs. The project is ideally located near Tando Nazar Ali on
National highway new Khairpur Town and is set to emerge as splendor of
opportunity in the province of Sindh.

Key Areas of Investment

 Non-food processing.
 Agro-food processing.
 Light Engineering/ Manufacturing.

ii. Rashakai Economic Zone Mardan

Rashakai Economic Zone (REZ), the flagship project of KPK Economic Zone
Development and Management Company (KPEZDMC) is spread over an area of
1000 acres. Rashakai Economic Zone is strategically located on M1 Motorway at
intersection and links to CPEC through Burhan interchange. REZ also serves as a
bridging post to Northern Areas of Khyber Pakhtunkhwa and has close proximity to
Afghan border. Due to this central position of the economic zone in the province, the
company foresees it to be the imminent trade hub of Khyber Pakhtunkhwa.
Rashakai Economic Zone will have infrastructure of international standards
including the facility of one window operation to support the industrialists. The zone
enterprises will have access to all amenities like water treatment plants, vocational
training facilities, state of the art IT systems, security, uninterrupted water and energy
supply. Based on the strengths of the connected districts and resource pool, the
economic zone has predominant investment feasibility for industries in fruit & food
packaging, textile and auto manufacturing. The central location also provides
opportunities for industrial set ups involving marble processing, furniture, electrical
products, pharmaceuticals, matchbox manufacturing, sugar mills, tobacco and juices.

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iii. Hathar Economic Zone
Khyber Pakhtunkhwa Economic Zones Development & Management Company has
undertaken a project on undeveloped land owned by Government of Khyber
Pakhtunkhwa at Hattar Phase 7, Haripur. Hattar Economic Zone is strategically
located at Haripur area adjacent to the existing Old Hattar Industrial Estate. Haripur
District also has joining boundaries with four other districts of Khyber Pakhtunkhwa
and two districts of Punjab province. The economic zone is (located) at a short
distance of 39 km from Islamabad, the capital territory of the country.

The project of Hattar Economic Zone envisages developing of an industrial area

on 1424 acres of land out of which 103 acres is earmarked for infrastructure
including roads, drainage, tube wells, overhead tanks, power plants, water supply
system, accommodation for necessary staff etc. 317 acres of plots are reserved for
allotment to industrialists. The main idea of developing economic zone in Hattar
is to provide quality infrastructure for accelerated industrialization in an organized
and scientific manner, to attract investment and to generate economic activities,
employment and income generation.

1. Export processing zones

Export Processing Zones Authority is a Pakistan Government venture conceived
and designed to increase and improve the exports of the country. Export
Processing Zones Authority (EPZA) is a Pakistan Government venture conceived
and designed to increase and improve the exports of the country. EPZA is one of
the fast-growing projects undertaken by the government and carries a great appeal
for both local and overseas investors.

The reason for our success in this venture is simple: we provide service with a
mission. And this success would not have come about without active cooperation and
participation of some other sectors which worked closely with us and helped us stand
where we are today. Following are the export processing units of Pakistan.

 Karachi Export Processing Zones

Karachi Export Processing Zone or KEPZ is located adjacent to the Landhi
Industrial Area in Karachi, Sindh, Pakistan. KEPZ is located within a distance of 18
km from the Quaid-e-Azam International Airport, 20 km from Port Qasim and 35 km
from Karachi Seaport. The Zone is linked with the National Highway network.

Incentives
i. Developed land on competitive rates for 30 years
ii. Duty-free import of machinery, equipment and materials
iii. Freedom from national import regulations
iv. Exchange control regulations of Pakistan not applicable
v. Repatriation of capital and profits
vi. No sales tax on input goods including electricity/gas bills
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vii. Duty-free vehicles allowed under certain conditions
viii. Domestic market available to the extent of 20%. Exceptions may be available
ix. Only EPZA is authorized to collect Presumptive Tax at the time of export of
goods which would be final tax liability
x. Obsolete/old machines can be sold in domestic market of Pakistan after
payment of applicable duties & taxes
xi. Defective goods/waste can be sold in domestic market after payment of
applicable duties, maximum up-to 3% of total value
xii. EPZ units allowed to supply goods to Custom manufacturing bonds

 Risalpur Export Processing Zones

Risalpur is a city in Khyber-Pakhtunkhwa province of Pakistan. The city is
mainly known for its Marble industries and rich mineral resources in the nearby
areas.

 Sialkot Export Processing Zones

Sialkot is the world’s largest producer of hand sewn footballs, with local factories
manufacturing 40 to 50 million football per year, amounting 70% of world
production. Sialkot is also providing all sorts of hospital equipment’s. Other
important industries in Sialkot include Leather tanneries, Leather garments,
musical instrument, Surgical and dental instruments. These are all export oriented
business and earn billions of dollars every year.

 Gujranwala Export Processing Zones

Gujranwala is a commercial and industrial center, playing major role in the
Pakistan economy. It has number of textile mills, and large agriculture processing
plants. Major exports include rice, sanitary, fittings, textiles, plastic, furniture,
pots, heaters, gas stoves, metal utensils, auto parts, military machinery,
motorcycles, food products and industrial motors.

2. Industrial Estates
Industrial estates are the zones that are used to carry industrial activities. Activities
such as roads, power, and other utility services are provided to facilitate the growth of
industries and to minimize impacts on the environment. Selection of industrial sites
should depend on social, environmental and economic factors. Industrial estates
should maintain safe distances from residential areas. Industrial estates units monitor
data, review it at regular intervals, and compare it with the operating standards so that
any necessary corrective actions can be taken. These include:
 Multan Industrial Estate phase
In 1960’s approval was obtained by the Provincial Government to establish an
Industrial Estate in the south of Punjab and 1410 acres of land was acquired for
this purpose. However, Government of Punjab decided to develop it into two
phases. Phase-I comprising of 743 acres was developed & completed in 1980’s
whereas, 667 acres were planned to be developed subsequently as phase-II. All
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plots in phase-I were leased out for a period of 99 years to industrialists and some
Govt. Institutions.

In 2004, the Government of Punjab (GOP) formally handed over MIE to Punjab
Industrial Estates in order to revive industrial activity. An amount of Rs. 100
million was allocated by the GOP for up gradation of the infrastructure and the
same amounts were contributed by PIEDMC expended form.

Multan Industrial Estate Phase-II

Encouraged by the response of up-gradation work in Phase-I, PIEDMC was
assigned task of development of infrastructure work for Phase-II in September
2006. It is located adjacent to Phase-I at a distance of approximately 17 km south
west of Multan City. Phase-II spreads over an area of 667 Acres having 349 plots.
Multan Industrial Estate is led by a Board of Management belonging to private
sector representing various industrial segments of the estate and the rest
representing the Government.

 Rahim Yar Industrial Estate

Rahimyar Khan Industrial Estate is an ongoing project of PIEDMC aiming to
bring the district of Rahimyar Khan into the main stream of economic growth.
Rahimyar Khan Industrial Estate has been developed over 450 Acre of land
providing state of the art industrial infrastructure to industrialists from all over
Pakistan. Big names like Suncrop (Pvt.) Ltd., Big Bird Group; Sunrise Plastic
Industries (Pvt.) Ltd. has already become part of Rahimyar Khan Industrial Estate.
Plots starting from 0.5 acre onwards are currently available for sale in Rahimyar
Khan Industrial Estate.

District Rahimyar Khan is rich in wheat, cotton and sugarcane, mangoes, citrus,
dates and has abundant livestock resources.

Hence it is a good opportunity for industrialists operating in the field of Cotton

ginning, leather, meat/poultry processing, Textile, vegetable ghee, fruit juices,
fertilizers to invest in Rahimyar Khan Industrial Estate and make use of available
resources plus generate employment for local residents.

 Bhalwal Industrial Estate

Bhalwal Industrial Estate is located on a prime location just 15 km from M-2
Motorway between Salam & Bhera Interchange. Bhalwal Industrial Estate spans
over 450 acres and is located in the best citrus producing area of the world in
District Sargodha. Plots starting from 0.5 Acre are available for sale in Bhalwal
Industrial estate and many renowned names of Pakistani Industry including Dawn
Bread, National Foods, Kemya Pharma, Nutra Allied etc. are already a part of this
industrial estate.

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District Sargodha is famous all over the world for its citrus producing ability. 52%
of national production of oranges is from Sargodha District that has a high export
value. Along with citrus, its produce is sugarcane, rice, wheat, potato and tomato.
Bhalwal Industrial Estate is planned to cater food processing units including
juices, jams jellies and snacks, citrus grading, cold storage. It also has a potential
for sugar mills, flour mills, rice husking units’ other trades include leather, paper
board, PVC, chip board, nutraceutical etc.

SUMMARY
Industry refers to that sector which is involved in manufacturing and production.
Industries can be classified into three major categories based on raw material, size
and ownership. Industrialization leads to development and growth of
underdeveloped regions of a country. Generally, location of industries is
influenced by economic and geographical factors. Cost minimization and
maximization of profit is goal in their selection of location for industries. There
are several factors which pulls the industry to setup place/location. Some major
factors influencing industrial location have been discussed.

There are number of heavy industries in Pakistan namely Sugar, Cement,

Fertilizers and sports Industry which contribute major share in foreign exchange
earnings. Major Economic Zones of Pakistan has been explained as A Special
Economic Zone (SEZ) is a specific area of the land used to promote industrial
growth in a country by providing moderate economic and tax policies. Export
Processing Zones Authority is a Pakistan Government venture conceived and
designed to increase and improve the exports of the country. Industrial estates are
the zone that are used to carry out industrial activities. Activities such as roads,
power and other utility services are provided to facilitate the growth of industries
and to minimize impacts on the environment.

SELF-ASSESSMENT QUESTIONS
1. Describe the suitable physical and non-physical for the growth of industrial
development.

2. Explain the worldwide production of cotton textile industry.

3. Explain the worldwide production of woolen textile industry.

4. Discuss in detail the special economic zones/industrial zones.

5. Write a detail note on heavy industries of Pakistan.

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Unit–8

DOMESTIC TRADE

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin

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 CONTENTS
Page #
Introduction ................................................................................................................ 141

Objectives ................................................................................................................... 141

8.1 Trade ................................................................................................................. 142

8.1.1 Parties Involved in the Process of Trade...................................... 142
8.1.2 Classification of Trade ................................................................. 142

8.2 Home Trade/Domestic Trade ............................................................................ 143

8.2.1 Wholesale Trade .................................................................................. 143
8.2.2 Retail Trade .......................................................................................... 143
8.2.3 Key Features of Home Trade ............................................................... 143
8.2.4 Advantages of Home Trade ................................................................. 144
8.2.5 Procedure and Documents of Home Trade .......................................... 146

8.3 Aids-To-Trade ................................................................................................... 149

8.3.1 Transport .............................................................................................. 149
8.3.2 Communication .................................................................................... 150
8.3.3 Warehouse............................................................................................ 150
8.3.4 Insurance .............................................................................................. 150
8.3.5 Banking and Finance ............................................................................ 151
8.3.6 Advertising ........................................................................................... 151
8.3.7 Middlemen ........................................................................................... 151
8.3.8 Trade Promotion Organizations ........................................................... 152
8.3.9 Packing ................................................................................................. 152

Summery .................................................................................................................... 152

Self-Assessment Questions ............................................................................... 154

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 INTRODUCTION

Trade has a major role in the development of a country. A country produces some
of the goods needed by the people but cannot produce everything. Trade is the
process of transferring goods and rendering services from one person/organization
to another and from one place to another place in exchange of money or goods.
Usually a country trades the goods it has in abundance or shortage. In this way the
demand of countries is fulfilled with the help of trade and prosperity and
economic development of countries is gained. In modern business world, the
importance of trade intermediaries is unquestioned. Aids-to-trade include all
activities, functions and institutions which are involved in the exchange of goods
produced in various industries to the ultimate users. Trade intermediaries such as
banking, transportation, insurance, warehousing, advertisement and
communication channels are integral parts of trade process without which trade
process in not possible. The unique properties of these intermediaries allow
businesses to set higher trade goals and meet them more effectively. These
intermediaries reduce supply chain costs, increase volume and efficiency of trade
and tighten customer relationships.

OBJECTIVES

After reading this unit, the student will able:

1. to understand the concept of trade
2. to know the Procedure and Documents of Home/Domestic Trade
3. to know the importance of domestic trade
4. to list down the Aids-to-trade

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8.1 TRADE
Trade is the exchange of commodities between individuals or groups either
directly through barter systems or indirectly through any medium such as money.
It includes all the selling and buying activities within a country or across the
boundaries. It is the entire procedure of distributing the goods produced by
different industries to their ultimate consumers. Hence, it removes the personal
hindrance in the exchange of commodities.

Trade plays an important role in the production of goods and consumption of

goods. Trade provides goods which are produced at some particular place to their
end users according to their needs. The prime purpose of trade is to remove the
hindrance of persons by bringing together producers and consumers who are
widely scattered.

8.1.1 Parties Involved in the Process of Trade

The role of following parties in trade is very important:
i. Producer
ii. Trader
iii. Consumer

i) Producer
Producer is a person who produces goods for selling them to the end users. He
makes necessary arrangements to convert raw materials into finished or semi-
finished goods. He generally sells his products through wholesalers and retailers
in local and foreign markets and makes profit on them.

ii) Trader
Trader is a person who buys goods from producers or other traders and sells these
goods to the end users or other merchants. His role of middleman serves as a
bridge between producers and end users of goods.

iii) Consumer/Customer
Consumer/Customer is a person who buys commodities or services for his
personal use. He does not further sell commodities to other persons rather he
satisfies his own desires and needs. This is the person for whom the whole
process of trade is taken place.

8.1.2 Classification of Trade

Trade is classified in two broader categories according to the market in the
following way:
(i) Home Trade/Domestic
(ii) Foreign Trade

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Details of these types of trade are given in the next section of the unit.

8.2 HOME/DOMESTIC TRADE

The exchange of commodities within the geographical boundaries of a country is
called domestic or home trade. In this type of trade, the seller and buyer both are
resident of same country. For example, a trader of Karachi sells goods to another
trader in Rawalpindi is the type of home trade. In home trade, services or
commodities produced are sold to all over the country which improve the living
standards of general public, create employment opportunities and facilitate
economic development of a country. Home trade is further divided into the
following two categories.

8.2.1 Wholesale Trade

In wholesale trade, a wholesaler buys commodities in the large quantities from
procedure and then sells them to retailers in small quantities. A wholesaler acts as
an intermediary between producers and retailers who can be a merchant or a
commission agent. He creates a bridge between the producer and retailer. In this
way, he makes his role very important for both the producers and retailers.

8.2.2 Retail Trade

In retail trade, a retailer buys large quantities from wholesalers and sells in units
to the end users. Retailer is considered the last link in the channel of distribution.
A retailer acts as an intermediary between wholesalers and the end users. A
retailer can be a small scale retailer such as hawker and general shop or large
scale such as superstore. Practically, producers and wholesalers are also
functioning as retailers in way of distributing commodities the end users in order
to bypass the intermediaries and reduce prices.

8.2.3 Key Features of Home Trade

Following are key features of home trade:
i. All trade transactions are taken within the geographical boundaries of a
particular country
ii. It covers only local or domestic markets
iii. Local currency is used in receipts and payments
iv. Normally, home trade involves the exchange of local goods. However,
foreign goods may also be traded
v. Facilities, problems and business environment are same for all traders
vi. Goods are handed over to buyers immediately
vii. Transportation charges are relatively lesser

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8.2.4 Advantages of Home Trade
i. Home trade creates the demand of locally produced goods, which leads to
increase in production.
ii. It enables manufacturers to concentrate on production activities rather than
to go in search of consumers.
iii. It provides goods to consumers who can concentrate on their own
occupations rather than to go in search of producers.
iv. Expansion in home trade provides employment opportunities to the masses
and reduces the problem of unemployment.
v. There are no legal formalities and restrictions to conduct home trade.
vi. There is no need of foreign exchange as local currency is used for receipts
and payments.
vii. The growth of home trade provides better opportunities for industrial
development. Industries are facilitated by consumption of their products,
providing raw materials, machinery etc.
viii. In agricultural countries, domestic trade plays a vital role in agricultural
development. Agricultural development is based on the availability of latest
technology, seeds, fertilizers and pesticides etc. All these requirements are
easily available in the whole county due to home trade.
ix. Since goods are transferred from one place to another within the boundaries
of a particular country, so local transport: can be easily availed for this
purpose.
x. With the help of domestic trade, various commodities can be made available
in different areas of the country. Due to this the people do not face any
problem to get their required goods.
xi. In domestic trade the government charges only nominal taxes like sales tax
etc. and the traders do not pay import and export duty.
xii. There is no restriction on the movement of goods within the country, so the
goods can be sent freely anywhere in the country which makes home trade
easy.
xiii. With the help of domestic trade, shortage of goods can remove by
transferring them from the area having surplus to the area with shortage.
With the smooth flow of supply of goods prices remain stable and equal
throughout the country.
xiv. All the facilities provided, and restrictions imposed by the government are
the same for each trader in domestic trade. None can have favorable
advantage or undue disadvantage.
xv. Due to home trade, the supply or availability of medicines is easy to make
and maintain. For example, the easy availability of medicine on clinics,

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 health clubs, medical stores and even on small shop is possible with the help
of home trade.
xvi. In home trade, a producer can purchase raw material and other factors of
production at low prices from that area where these are available at cheaper
rates. Having cheap raw materials and other means of production, the goods
can be produced at lower cost to compete in the market.
xvii. Living standards can be improved with the help home trade. Because more
trade leads to more business that create more employment opportunities to
the masses and resultantly increasing income level of people and making
goods easily available. All the above, elements lead to high standard of
living.
xviii. In home trade, the buyer gets immediate possession of goods; he can use
according to his need which extends trade activities.
xix. Due to home trade, the best possible utilization of available resources of
country is possible in the best interests of general public.
xx. The importance and demand for workers increase with the expansion of
home trade and they can go to those places, where employment
opportunities arise.
xxi. Due to development in home trade, the local and foreign investors find
viable investment opportunities to earn huge profit.
xxii. The goods can be bought or sold on credit basis without any hesitation. Due
to this, the exchange of goods and services is possible with less capital or
without capital.

Hindrances in Home Trade

vii. Sometimes heavy taxes and restrictions are imposed by provincial or federal
government on transferring goods at national or district level, which results
in reduction of the trade volume.
viii. Cheap and quick means of transportation and communication contribute a
lot in the development of domestic trade. But their inferiority may prove an
ample problem for home trade.
ix. Generally, the goods having better quality are exported and substandard
goods are sold locally in domestic trade.
x. Due to bad conditions of peace and stability in some parts of the country,
free trade becomes impossible. Due to this, home trade is affected adversely.
xi. Rapid change in governments and political crises create instability in home
trade and disturb its continuity. So, backward areas do not make progress in
trade and business.
xii. People living in different areas of the same country have different
languages. A trader may face this problem in order to sell his goods.

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xiii. Poor rail-road conditions and lack of infrastructure are the big hindrances in
the way of domestic trade especially in developing countries like Pakistan.

8.2.5 Procedure and Documents of Home Trade

i. Enquiry Letter
In this letter a person/trader seeks necessary information about the goods he wants
to buy. Following are major parts of an enquiry letter:
(a) Availability of goods
(b) Quality of goods
(c) Price and Discount
(d) Packing of goods
(e) Terms of sale
(f) Time required for delivering and transporting goods
(g) Mode of Payment

ii. Quotations/Tender
Quotation is the reply of an enquiry letter. It includes all necessary information,
terms and conditions regarding the sale of goods required by the buyer. In
government buying, it is called tender. Usually, it contains the following
information:
(a) Quality of goods
(b) Price and discounts
(c) Details of delivery expenses
(d) Time required for such delivery
(e) Mode of payment

iii. Order Letter

If terms and conditions are considered favorable after receiving quotation/tender
from the seller, the buyer may place the purchase order with the help of the order
letter. The buyer also retains a copy of the order letter for his future needs.

iv. Acknowledgement of Order Letter

The seller then sends an acknowledgement of the order letter to buyer with thanks
stating that your order has been received.

v. Sales Agreement
After receiving the order in proper form, an agreement of sale of goods is made
between buyer and seller. The agreement is called sale agreement and it may be
oral or written.

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vi. Execution of Order
The seller adopts the following procedure for execution of purchase order.
(a) Order is recorded in the order book
(b) A copy of order is sent to the storekeeper to confirm the availability of
goods
(c) If required stock is available, then goods are sent for packing

vii. Delivery of Goods

The seller decides to deliver the goods to buyer according to the provisions of sale
agreement.

viii. Delivery Note

After dispatching the goods, a delivery note is sent to buyer. This document
contains information like means of sending goods and time etc. A Performa
invoice is also sent to buyer along with delivery of goods.

ix. Performa Invoice

It can be said "Rough Invoice" to show the purchaser that how an actual invoice
will be prepared if he decides to buy goods. However, it cannot be used in place
of original invoice.

x. Debit Note
If goods bought on credit are returned to seller due to any reason, the buyer debits
the sellers account and informs the seller through a note. This note is called
"Debit Note".

xi. Credit Note

If goods sold on credit are returned by the buyer due to any reason, the seller
credits the buyer account and informs the buyer through a note. This note is called
"Credit Note".

xii. Invoice
It is an important document of internal trade, which includes quantity, price and
total value of the goods sold. It is sent to the buyer and payment is made
according to the amount written on it.

Following are the contents of an invoice:

(a) Name & address of the sender
(b) Name & address of the buyer
(c) Date
(d) Serial number of invoice

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(e) Quality or brand of goods
(f) Weight or quantity of goods
(g) Rate and total value of the goods
(h) Other expenses if any (transportation and packing etc.)
(i) Terms of payment and discount
(j) Signature of seller

xiii. Statement of Account

Both parties (seller and buyer) record the transactions (sale, purchase, receipt or
payment) in their respective books regularly. This statement shows the
transactions, which have been taken place during to the period. It enables the
buyer and seller to compare the entries in their books and settle the accounts
accordingly.

xiv. Cash Discount

It is a concession or allowance granted to the buyer for early and prompt payment
in case of credit sales. This facility can be availed if the payment is made before
maturity.

xv. Payment
After receiving the goods and statement of accounts, the payment is made by the
purchaser. A payment can be made by using the following methods within the
country:
(a) Cash
(b) Cheque
(c) Bank transfer
(d) Bank draft
(e) Money order
(f) Postal order etc.

xvi. Payment Slip/Receipt

It is an acknowledgement, which shows that a person has made the payment of a
certain amount on a date. With the use of this receipt, future misunderstandings
regarding the payments can be avoided.

xvii. End of Deal

After settlement of accounts and completion of all the formalities between parties,
the process of a local trade comes to an end.

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8.3 AIDS-TO-TRADE
Trade or exchange of goods involves several difficulties, which are removed by
auxiliaries known as aids to trade. It is the collection of all such activities which
deal with the buying and selling of goods, the exchange of commodities or
distribution of the finished goods. Transportation of goods, role of trader,
insurance companies, financial institutions, advertisement of goods, storage and
all such activities, which are directly or indirectly help the exchange of goods are
included in this range. For example, the production of the products is taken place
somewhere else and the products are consumed somewhere else.

Transport helps in removing this problem of place. Generally, goods are produced
in anticipation of demand and if the people do not purchase them immediately,
warehouses keep these goods safe. Hence, the role of these aids-to-trade in
exchange of goods and services becomes very crucial in smooth trade. Aids-to-
trade include all the activities, which directly or indirectly facilitates smooth
exchange of goods and services. These activities facilitate trade by removing
various barriers in the buying and selling of goods. Aids-to-trade includes
transportation, warehousing, banking and finance, insurance, advertising,
communication, middlemen/mercantile agents, packaging, and trade promotion
organizations. Auxiliaries ensure smooth flow of goods from producers to the
consumers.

It is the framework of attaining certain objectives. The objectives of commerce

are to provide series of service or activities, which can facilitate the exchange of
goods until they are reached in the hands of ultimate and proper consumer. Thus,
the consumers can satisfy their wants and the producers can sell their goods to get
profit. In organizing the activities in commerce, we go through the following
elements, which are also known as aids or auxiliaries to trade.

8.3.1 Transport
Transport is the source or conveyance used for transferring goods and passengers
from one place to another. It facilitates trade by transferring and distributing
goods. Transport brings the goods from the place of production to all the far and
distant places of consumption. It helps the consumers in getting a wide variety of
goods at reasonable prices. It overcomes the barrier of distance and creates place
utility. Transport widens the market and helps to equalize and stabilize prices at
different places. It results in the equitable distribution of goods in the remote
areas.

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Transport helps in increasing the size and scale of business. Well-developed
facilities of transport help industrial units to locate at the most economical places
and grow to their optimum size. There are several kinds of transport such as air,
water and land transport. The geographical distance between producers and
consumers is removed with the help of transport. Fast and economical means of
transport such as railways, roadways, airways and shipping widen the scope of
trade.

8.3.2 Communication
Communication means the exchange of information from one person to another. It
can be oral or in writing. It is necessary to communicate information from one
party of trade to another to finalize and settle the terms of sales such as prices of
goods, discount allowed, facility of credit, etc. Means of communication provide
or convey commercial information to individuals, firms and companies. These
consist of people, institutions and processes engaged in spreading the necessary
business information between producers and consumers. Radio and television are
general communication services but other channels of communications such as
telephones, fax, telegrams, E-mail, Internet also play an important role in
establishing contact between businessman, producers and consumers.

8.3.3 Warehousing
Usually, goods are produced in anticipation of consumers’ demand. It is,
therefore, necessary to store the goods until they are sold. The activity related to
warehousing consists of storage of goods in enough quantities so that they can be
supplied as and when there is demand. Thus, the hindrance of time is removed by
warehousing. Many products such as wheat, sugar, rice, etc. are produced in a
season but they are needed throughout the year. Proper storage arrangements must
be made in order to make the goods available throughout the year. Besides, it is
necessary to store commodities such as woolen garments and umbrellas to meet
the desired seasonal demand. Warehousing also helps in stabilizing prices through
equal distribution of surpluses over different time periods. Warehousing removes
the hindrance of time and thereby creates time utility.

8.3.4 Insurance
Business involves several types of risks such as possibilities of theft, price
fluctuations, dishonesty of employees, bad debts, exchange rate fluctuations, loss
of goods in transit, fire, floods, burglary deterioration, accident and breakage etc.
The activity of bearing possibilities of such type of risk to goods is linked with
insurance. With the help of insurance, a businessman can protect himself from
almost all types of risks. Insurance companies try to reduce these types of risks by
spreading them out over a greater number of people called "pooling of risks".

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Many people who are subject to a particular risk contribute to a common fund, out
of which compensation is paid to those few who suffer the loss. In this way the
amount of risk borne by an individual businessman is reduced by distributing the
burden of loss over many persons. The rate of premium depends upon the type of
risks and the period for which the risk is covered. Insurance creates a sense of
security and freedom from anxiety for businessmen. Businessmen can carry on
their business with confidence and peace of mind which results in development
and progress of trade.

8.3.5 Banking and Finance

There is usually a time gap between production/purchase and sale of goods.
During this period businessman need funds to carry on their business. Usually,
business transactions involve large amounts of payments and receipts which
involve the risks of theft and burglary. Banks and other financial institutions
provide required credit in various forms. The activity of providing funds is linked
with banking and finance sector. Banks and other financial institutions provide
loans for business transactions, collect money on behalf of customers, discount
bills of exchange and provide safe and quick means for the remittance of money
to businessmen who ultimately remove the hindrance of risk and finance.

8.3.6 Advertising
Advertising/publicity is the procedure of informing potential consumers/customers
about the availability, features and price of various products and services.
Advertising is the most important media of mass communication for a business.
The main purpose of advertising is to create and sustain demand. Advertising
removes the hindrance of knowledge. It fills the knowledge gap and it solves the
difficulty of information exchange among producers and consumers. There are
various forms of advertising such as the print media, electronic media, outdoor
displays, radio, television, letters to customers, fairs, social media, exhibitions and
cinema, etc. Good marketing research can help the businessmen to know and
understand the requirements of consumers.

8.3.7 Middlemen
Middlemen perform the role of bridge between producers and consumers. They
do not carry on business in their own name. Middleman may be a distributor,
trader, salesmanship, mercantile agents, brokers, commission agents, auctioneers,
underwriters, insurers or of some other status like transporter or salesman etc.
Some middlemen are specialized in bringing buyers and sellers together for a
transaction and they play active and prominent role in the negotiations leading to
purchase and sale. Middlemen receive their reward in the form of commission. It
removes the hindrance of person and place.

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8.3.8 Trade Promotion Organizations
Sometimes, national and international trade promotion organizations help in
promoting and developing business activities. Main objective of these
organizations is to facilitate the promotion and development of trade. These
organizations are established by the business community to protect and promote
the interest of their members. They conduct market research work, act as clearing
house of information, put their grievances before the government, make
representations, and help business community in many ways. The examples
include Chambers of Commerce, Export Promotion Councils, World Bank, IMF,
WTO, etc.

8.3.9 Packing
Packing means putting goods in wrappers, containers, etc. Packing helps to
protect the goods from damage during transport and warehousing. It also makes
the goods attractive. Packing helps in the conveyance and handling of goods. It
removes the hindrance of risk by keeping goods safe and free from spoilage.
Trade and transport of goods have become easier and safer due to improvements
in the art and methods of packaging.

SUMMARY

All the economic activities which are undertaken to earn profit are included in
business. You have also studied two main categories of business; (i) Industry, (ii)
Commerce. The prime purpose of commerce is to facilitate the distribution of
goods through trade and aids-to-trade. Trade has a major role in the development
of a country. A country produces some of the goods needed by the people but
cannot produce everything. Trade is the process of transferring goods and
rendering services from one person/organization to another and from one place to
another place in exchange of money or goods.

Usually a country trades the goods it has in abundance or shortage. In case of

abundance of goods, a country sells goods to other countries which are having
shortage of those goods and earns money or other kind of wealth. In case of
shortage of goods, a country buys goods from other countries having abundance
of goods. In this way the demand of countries is fulfilled with the help of trade
and prosperity and economic development of countries is gained. In modern
business world, the importance of trade intermediaries is unquestioned.

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 Trade intermediaries have a strong impact on trade. Trade intermediaries or aids-
to-trade are necessary for trade which facilitate trade and play a vital role in the
successful completion of trade process. Aids-to-trade include all activities,
functions and institutions which are involved in the exchange of goods produced
in various industries to the ultimate users. Trade intermediaries such as banking,
transportation, insurance, warehousing, advertisement and communication
channels are integral parts of trade process without which trade process is not
possible.

Banking and financial sector provide loans and financial services to traders,
transportation helps in dispatching goods from one place to another, insurance
saves traders from various types of trade losses, communication channels provide
facility of sending and receiving business messages quickly and accurately,
warehousing keeps the goods for a long period of time and saves goods from
deteriorations and advertisement creates awareness about the products and
explains the attributes of goods to the public for inducing them to buy those goods
that resultantly creates better-informed users. The unique properties of these
intermediaries allow businesses to set higher trade goals and meet them more
effectively. These intermediaries reduce supply chain costs, increase volume and
efficiency of trade and tighten customer relationships.

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 SELF-ASSESSMENT QUESTIONS

1. Explain the Domestic Trade and discuss the classification of trade.

2. Discuss the Key Features and advantages of Home Trade.

3. What are the main Procedures and Documents of home trade?

4. Describe the major domestic markets of Pakistan.

5. Write detail note on each point of the following:

a. Advertising

b. Middlemen

c. Packing

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Unit–9

FOREIGN TRADE OF PAKISTAN

Compiled by: Arifa

Asia Batool
Reviewed by: Huss-Nul-Amin
155
 CONTENTS

Page #
Introduction ....................................................................................................... 157

Objectives ......................................................................................................... 157

9.1 Introduction to Foreign Trade of Pakistan ............................................... 158

9.1.1 Foreign Trade ............................................................................... 158

9.2 Role of Trade Development Authority of Pakistan ................................. 159

9.2.1 Export Facilitation Efforts by TDAP ............................................ 161
9.2.2 New Markets ................................................................................. 161

9.3 Free Trade Agreements (FTAs) ............................................................... 162

9.3.1 South Asian Free Trade Area (SAFTA) ........................................ 163
9.3.2 Impact of TLP on Pakistan’s Trade with SAARC Region ............ 163

9.4 Role of Foreign Trade .............................................................................. 163

9.5 Producer and Documents of Foreign Trade ............................................. 165

9.6 Exports of Pakistan .................................................................................. 168

9.7 Imports of Pakistan ................................................................................. 171

Summary ........................................................................................................... 173

Self-Assessment Questions ............................................................................... 174

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 INTRODUCTION

This unit will introduce the foreign trade of Pakistan. Foreign trades are the
exchange of capital, goods and services across international borders or
territories. International trade is the exchange of goods and services across
international boundaries of countries. It is exchange of goods and services among
different nations. In various countries it represents significant share of the GDP.
Free Trade Agreements (FTAs) will be explained. Pakistan is a member of World
Trade Organization (WTO), part of the South Asian Free Trade Area agreement
and the China-Pakistan Free Trade Agreement. Fluctuating world demand for its
exports. Foreign trade plays very important role in the economic development of
any country. There are number of dry ports inland intermodal terminal directly
connected by road or rail to a seaport. The imports and exports of Pakistan will be
discussed.

OBJECTIVES

After reading this unit, you will able:

1. to know the concept of foreign trade of Pakistan
2. to know Role of foreign trade
3. to list down the exports of Pakistan
4. to list down the imports of Pakistan

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9.1 INTRODUCTION TO FOREIGN TRADE OF PAKISTAN
The International trade is the exchange of goods and services across international
boundaries of countries. It is exchange of goods and services among different
nations. In various countries, it represents significant share of the GDP. Economic
and social importance of international trade has been increased in recent years in
various countries. Trading globally gives consumer and countries the opportunity
to purchase any product what they want. Almost every kind of products like food,
clothes, machinery and services are available in international markets.

A product sold in international market is called export, and a product that is

purchased from global market is called imports. Imports and exports are
accounted for in the balance of payment of a country. Industrialization, advance
technology including transportation, globalization and outsourcing are all having
major impact on the international trade. Without international trade, nations
would be bounded to consume the goods & services produced in their own
country. Instead of importing the factors of production countries prefer to Import
finished products that required fulfilling the needs of people.

We live in global marketplace. The food on your table might include fresh fruits
from chille, Toys you give to your child may become from china, the car you
might drive come from Japan. The crude oil might be from Saudi Arabia, and the
salary you receive may come from the exports sales. The first wave of
globalization was started in the 19th century. The share of exports in GDP was
increased from 1% to 9% from 1820 to 1913.Globalization is the process by
which world is isolated through technological distance, becomes increasingly
interconnected, it increases the interaction between people around the world that
involves the sharing of ideas, goods and services.

9.1.1 Foreign Trade of Pakistan

Pakistan has bilateral and multilateral trade agreements with many nations and
international organizations. Pakistan is a member of World Trade Organization
(WTO), part of the South Asian Free Trade Area agreement and the China-
Pakistan Free Trade Agreement. Fluctuating world demand for its exports,
domestic political uncertainty, and the impact of occasional droughts on its
agricultural production have all contributed to variability in Pakistan's trade
deficit. The trade deficit for the fiscal year 2016-17 is $32.578 billion.

Pakistan's exports continue to be dominated by cotton textiles and apparel.

Imports include petroleum and petroleum products, edible oil, chemicals,
fertilizer, capital goods, machinery, out mobile industrial raw materials, and
consumer products. On 12 December 2013, the European Union granted GSP
Plus status to Pakistan until 2017, which enabled it to export 20% of its good with
0 tariff and 70 percent at preferential rates to the EU market.
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Pakistan exports rice, kinnow, mangoes, furniture, cotton fiber, cement, tiles, marble,
textiles, clothing, leather goods, sports goods, cutlery, surgical instruments, electrical
appliances, software, carpets, rugs, ice cream, livestock meat, chicken, powdered
milk, wheat, seafood (especially shrimp/prawns), vegetables, processed food items,
Pakistani-assembled Suzuki’s (to Afghanistan and other countries), salt, onyx,
engineering goods, and many other items. Pakistan exports cements to Asia and the
Middle Eastern countries.

9.2 ROLE OF TRADE DEVELOPMENT AUTHORITY OF

PAKISTAN (TDAP)
1. To recommend to the TDAP Board, a national policy for maximizing
exports of goods and services from Pakistan and after approval of the
Federal Government to develop strategy and plans within the policy
framework given by the Board.
2. To develop a consistent, sustainable and result oriented, holistic export
development plan, outlining vision, objectives, strategies and plan as
approved by the Board.
3. To achieve synergy in development of exports at a national level by forging
effective liaison with private and public stakeholders and avoiding
duplication of efforts.
4. To encourage and promote research in trade and policy related studies that
may facilitate in formulating an effective export policy and plans.
5. To plan, organize exhibitions, delegations to and from Pakistan;
6. To plan and organize local, international and inter-provincial export
promotional conferences, workshops, seminars etc.
7. To plan and organize foreign trade promotion through advertising in local
and international print electronic and other appropriate media.
8. To liaise with trade bodies abroad.
9. To promote export sectors where separate sectored boards / bodies currently
exist or will be formed in the future, notwithstanding anything contained in
any other law for the time being in force.
10. To examine supply chains of strategic export sectors and develops plans and
initiatives for strengthening supply base including exporters’ capabilities
and capacities.
11. To monitor progress against these plans for information of the Board.
12. To coordinate through Ministry of Commerce, with the Federal and
Provincial Governments and related organizations for a concerted supply
chain initiative; to provide visa assistance to outgoing or incoming
businessmen whether Pakistani or foreign nationals, in co-ordination with

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 the Ministry of Foreign Affairs and foreign Missions in Pakistan; to
encourage, establish and manage where appropriate export development
centers, business support units, display centers and facilities, and
information centers, and exporters training institutes etc.
13. To promote exporters and stakeholders’ education and training of
intermediaries of export related supply chain.
14. To encourage the organized development of the export business and the
related corporate and commercial sectors in Pakistan.
15. To facilitate the availability of finance to exporters, export oriented small
and medium enterprises, risk management of exporters and international
buyers, energy and infrastructure needs of exporters and related industrial
areas and zones, quality management, social, environmental and security
needs and generally all aspects of export facilitation etc.
16. To encourage and promote human resource development in the export
sectors.
17. To encourage and promote and train new exporters.
18. To provide advisory support to stakeholders.
19. To be responsible for all matters related to trade development and promotion
by Commercial Officers posted in Pakistani Missions abroad. This shall
include the training, trade targets, monitoring, and performance evaluation
against these trade targets. The Chief Executive of the Authority shall be a
member of the committee for selection of the Commercial Officers to be
posted abroad.
20. To manage funds available to the Authority in accordance with rules and
regulations approved by the Board; to make rules for the conduct of the
Authority with approval of the Board.
21. To have the administrative control of warehouses and other trade
development entities owned by the Authority in Pakistan and abroad.
22. To set up National, Provincial and Sectoral trade committees.
23. To implement directives of the Federal Government and the Board relating
to export development and promotion.
24. To prepare Annual Report of the Authority.
25. To include a quality assured ethic in exporters while encouraging value
addition of exports.
26. To take, initiatives for maintaining facilities etc. to improve the performance
of exporters in the interest of generating economic activity, reducing cost of
doing business and enhancing supply chain efficiency.
27. To maintain the confidence of exporters by appropriate communications.
28. To promote the establishment and development of professional, educational
and training organizations connected with exports with a view to improving
the management of export business.

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29. To promote awareness among exporters and buyers and all relevant
stakeholders with respect to the benefits of exports and services of the
Authority and general policies of the Federal Government.

9.2.1 Export Facilitation Efforts by TDAP

1. The new strategy is based on a two-pronged approach, namely:
i. Products/Services.
ii. Markets.
2. Achieving value-addition through
i. Investment + Research & Development + Technology + Skill
Development.
3. Assist SME’s to cross over the threshold.
4. Prioritize and provide opportunities for better use of resources.
5. Create opportunities for increased market share through incoming/outgoing
delegations focusing on bringing buyers to Pakistan.
6. Broaden the present narrow export base.
7. Moving on thirteen (13) new product development projects, i.e. Marble,
Mango, Agro Food, Dates, Carpets, Leather, Gem & Jeweler, etc.
8. Research & Development activities pertaining to market & product
development.
9. New products & services with greatest export potential identified; besides
these, TDAP will continue the efforts to increase the traditional exports of
Pakistan e.g. Textile, Clothing, Carpets, Surgical goods, Sports goods, etc.

9.2.2 New Markets

There is slow growth in demand in traditional markets of US & EU. Hence,
TDAP’s increased focus on increasing market share of Pakistan exports in new
Asian Markets especially Russia, China, India, and in Africa. To carry forward
this mission successfully, implementation of the New Export Strategy was
imperative. The first agenda item was thus the re-organization of TDAP, whose
principle features are:
i. Product divisions to develop export potential of Pakistani products through
four divisions namely,
 Agro Food
 Textile and Cloth
 Mineral and Metals
 Engineering & Manufacturing
ii. Services Division: To develop exports of Services Sector.
iii. Marketing Divisions: To develop strategy for increasing market share for
better understanding of major markets, through market analysis, competitor

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 analysis, and seeking best business practices, the following divisions were
created:
1. Asia Pacific Division
2. Europe Division
3. America Division
4. Africa Division.

9.3 FREE TRADE AGREEMENTS (FTAs)

Free trade is a policy followed by some international markets in which countries'
governments do not restrict imports from, or exports to, other countries. Pakistan
has free trade agreement with many countries to flourish its exports as well as
imports to meet its local requirements. Following are the free trade agreement of
Pakistan with other countries.
i. China Pakistan FTA (CPFTA):
China-Pakistan Free Trade Agreement (CPFTA) on trade in goods was signed on
24thNovember 2006 and implemented from 1st July 2007. FTA on Trade in
Services was signed on 21st February 2009 and is operational from 10th October
2009.The FTA covers more than 7000 tariff lines at the 8-digit level of HS code.
Pakistan-China volume of trade, which was in the region of US$ 4 billion in the
year 2006-07, reached an all-time high at US$ 13.77 billion in 2015-16.
Pakistan’s exports have increased by almost 200 percent (US$ 575 million in
FY2007 to 1690 million in FY2016). China’s exports to Pakistan have increased
to almost 250 percent (US$ 3.5million in FY2007 to 12.1 billion in FY2016).

ii. Malaysia- Pakistan FTA (MPCEPA)

A Comprehensive Free Trade Agreement (FTA) for Closer Economic Partnership
between Pakistan and Malaysia was signed on 08-11-2007 at Kuala Lumpur. It is
operational from 1st January 2008.The tariff reduction commitments involved
elimination of tariffs on 43.2% of Pakistan’s imports from Malaysia and 78% of
Malaysia’s imports from Pakistan. In 2007-08, Pakistan-Malaysia bilateral trade
was US$ 1238.808 million with Pakistan’s exports amounting to US$ 81.323
million. In the same year Pakistan ‘s imports from Malaysia were US$ 1157
million. After the implementation of the Agreement, Pakistan’s exports to Malaysia
have increased to US$ 188 million and imports decreased to US$ 814 million.

iii. Pakistan -Sri Lanka FTA (PSFTA)

Pakistan and Sri Lanka signed a Free Trade Agreement in 2002 which became
operational in June 2005. Under the FTA, concessions that are granted, list of
Pakistan contains 206 items of 100% concession. The Sri Lanka has granted

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access to the Pakistani rice and potatoes subject to a Tariff Rate Quota. Under this
FTA, tariff preferences offered to Pakistan are, though less in number, have
resulted in an increase of Pakistan’s exports. After signing of FTA, Pakistan’s
bilateral trade with Sri Lanka increased from US$ 200 million in 2004-05 to
US$321.71 million in 2015-16. Pakistan’s exports in the corresponding period
have also increased from US$ 155.83 million to US$ 247.11 million.

9.3.1 South Asian Free Trade Area (SAFTA)

The SAARC Preferential Trading Arrangement (SAPTA) was signed in April,
1993. Subsequently, the 16th Session of the Council of Ministers of SAARC (at
New Delhi, in December 1995) agreed to establish a South Asian Free Trade
Area. The Agreement on South Asian Free Trade Area (SAFTA) was signed
during the 12th SAARC Summit held at Islamabad on 6thJanuary 2004. The Tariff
Liberalization Programme (TLP) on the under SAFTA was finalized during the
first meeting of SAFTA Committee of Experts (COE) held in Dhaka, in April
2006. The first two phases of the TLP under SAFTA have been implemented by
all countries.

9.3.2 Impact of TLP on Pakistan’s Trade with SAARC Region

Pakistan’s trade in the SAARC region has increased substantially due to TLP. In
FY 2003-04, Pakistan’s total export to the SAARC region was US$ 886 million
which increased to US$ 1,564 million in FY 2006-07 (in the first year of
SAFTA’s implementation). During FY 2015-16, Pakistan’s exports to the
SAARC region were US$ 2690.23 Million. Pakistan’s total imports from the
SAARC region have increased from US$ 527 million in 2003-04 to US$ 2318.49
million in 2015-16.
(Source: Ministry of Commerce)

9.4 ROLE OF FOREIGN TRADE

The role of foreign trade in economic development is as follows,
1. Foreign Trade and Economic Development:
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. Therefore, it is not wrong to say
that economic development of a country is directly depends on foreign trade.
 Foreign exchange earnings
Foreign trade earning plays a vital role in economic development of a
country. Foreign trade leads to foreign exchange earning which can be used
to remove the poverty and other productive purposes.

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2. Quality goods at lower rates:
If a country cannot produce a specific commodity, then it can import that
commodity at lower rates from international market in the presence of foreign
trade which improve living standards of people.

3. Removal of shortage of goods:

Foreign trade is helpful for the removal of shortage of goods. If there is shortage
of any commodity, then that commodity can be imported from the international
market which will eliminate shortage of good in market.

4. Removal of the monopolies:

Foreign trade discourages the formation of local monopolies. The local producers
cannot exploit the consumers because of fear of cheap imports. In the absence of
imports, some local firms may create monopoly and charge very high prices and
due to which level of inflation increase.

5. Stable prices:
Foreign trade helps in the price stability of a country. If the price level of any
commodity is high, then that commodity can be imported which will keep prices
stable.

6. Increase in national income:

In the presence of international trade, the resources are properly utilized which
increase exports of the country which leads to increase in Per capita income and
national income.

7. Specialization in production:
Foreign trade leads to specialization in the production of those goods which a
country can produce at lower cost. This situation improves the overall welfare of
the people of any country.

8. Productive factors
Through foreign trade the productivity of factors of production increases.
Mobility of factors of production is increase due to their demands in market
which helps underdeveloped countries to develop and maintain a high level of
growth of developed countries.

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9. Import of capital goods and technology
The inflow of capital goods and technology in the less developed countries has
increased the rate of economic development, and this is only possible through due
to foreign trade.

10. World peace

Today all the countries are tied in trade relations with each other through foreign
trade. Foreign trade contributes to peace and prosperity of the world.

11. External economics

External economics can also be achieved through foreign trade. The industries
producing foods on large scale in Pakistan and other countries are enjoying the
external economics due to international trade.

12. Import of consumer goods

Pakistan imports the various consumer goods from other countries, which are not
produced inside the country. Today the shortage of any commodity can be
removed through international trade.

13. Agricultural development

Agricultural development is the backbone in our economy. 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
goods makes our farmer more prosperous.

14. Decrease in unemployment

With the rise in the demand of goods domestic resources are fully utilized and it
increases the rate of development in the country and reduces unemployment in the
world and creates employment opportunities.

9.5 PROCEDURE AND DOCUMENTS OF FOREIGN TRADE

1. Bill of Lading
When the goods are dispatched by ship from one place to another, the receipt
issued by shipping company is called bill of lading. Bill of lading represents the
title to the goods. Goods cannot be received from shipping company unless bill of
lading is presented to shipping company. Exporter or his forwarding agent fills
the form for bill of lading. The bill of lading is usually issued in sets of three and
is accompanied by other documents such as the invoice and insurance policy.

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Bill of lading contains all the data pertaining to the shipped merchandise as under:
(a) Name of exporter
(b) Name of importer
(c) Name of ship
(d) Type of goods
(e) Quantity of goods
(f) Mark of packing
(g) Name of the port where the goods have to be unloaded

A bill of lading may be clean or foul. A clean bill of lading is issued when the
captain of vessel is satisfied with the packing of goods and he signs bill of lading
without writing any comment on it.

2. Mate’s Receipt
A mate’s receipt is a document issued by mate of the ship. Mate is the officer
responsible for cargo. Tally clerks tally the cargo and report the mate then the
mate issues a receipt called "Mate’s Receipt".

3. Freight Note
Captain of the ship issues a freight note which contains detail of charges payable
to the shipping company. Commonly, it is prepared in quadruplicate (4 copies);
one copy for the exporter; two for the importer; and one for the shipping
company.

4. Marine Insurance Certificate

It is necessary for the exporter to insure the goods against different types of risks
during transit. The exporters contact insurance companies and take up an
insurance policy and send the same to the importer. The certificate of insurance
contains full description of the goods, marks on the packages, weight, port of
origin, destination etc.

5. Invoice
Invoice is an important business document which is made by the seller containing
full information about the description of goods, the date of sale, the terms on
which the goods are sold and full address of the buyer and seller. Invoice is issued
in duplicate, one copy for importer and other for exporter.

6. Consular Invoice
This is a certificate issued by the consular office of exporting country which
shows that the value of the exported goods mentioned therein is correct. Custom

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officials of importing country require this document if the duty is to be charged
according to value of the goods imported.

7. Bills of Exchange
The exporter may get the payment by drawing Bills of Exchange on the importer.
A bill of exchange is an order to importer for the payment of goods at particular
fixed date. This bill is sent to the importer through a bank of an importing
country.

8. Certificate of Origin
It is necessary for exporter to secure a Certificate of Origin if there is an
agreement between the countries for exempting their goods from import duties or
imposing less import duty. It is sent to the importer to present it to the custom
authorities. It indicates the origin of exporter and it is generally issued and signed
by the chamber of commerce of the exporting country.

9. Letter of Credit
Letter of credit is a document issued by importer's bank to the exporter's bank,
directing that the beneficiary named in the letter should be allowed credit for a
specific period according to terms and conditions mentioned in it. Letter of credit
is issued in case importers and exporters may not know each other and their
exporter is not sure about the importer's credit worthiness and wants to ensure
payment from bank through a Letter of Credit.

10. Bill of Entry

This is a document on which the importer provides details of imported goods to
custom authority in paying custom duty. It may be in three forms; black, blue and
white. A black form is used for exempted goods; a blue is used for goods to be
sold within the country; and a white form is used for the goods to be re-exported.
On the basis of this information, the custom authorities calculate the amount of
custom duty payable by the importer.

11. Bill of Sight

A bill of sight is a request to custom authorities for checking and preparing a list
of the goods in their custody in case an importer had not received the documents
regarding the goods imported. In such a case, the custom authorities themselves
complete Bill of Entry on the request of an importer and then charge custom duty
accordingly.

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12. Charter Party
Charter party is a deed of agreement between a ship owner and a trader for the
hire of a ship and the delivery of cargo. It contains the name of the ship, names of
the parties, class of the charter party, and representation by the ship owner about
sea-worthiness of the ship and other terms and conditions. In a charter party
agreement, the whole ship or a major part of it is reserved for exporter to carry his
goods to a particular place at an agreed freight. A Charter Party may be a Voyage
Charter Party for a particular voyage or a Time Charter Party for a specific period.

13. Letter of Hypothecation

If an importer has no money to pay custom duty etc. at the port for goods
imported, he may approach his bank for a loan. Letter of hypothecation is a
document through which goods are hypothecated with the banker for obtaining
loan. If the loan is not returned according to the terms and conditions mentioned
therein, the banker might take possession of hypothecated goods and may sell
them for compensation.

14. Dock Warrant

It is a transferable document issued by warehouse-keepers to represent the rights
of ownership of goods. The holder or presenter of dock warrant can receive the
goods from warehouse.

15. Letter of Indemnity:

It is a document in which a person assures another person or firm for the
compensation of loss in case of happening of specific events. Sometimes, the
goods reach to port before receiving bill of lading. In this case, the importer
collects the goods by getting letter of indemnity in the favor of shipping company.

16. Delivery Order:

Delivery order is issued by the owner of goods in the name of port officer to
handover goods to the holder of this order. Only the holder of this document has
right to receive the goods from port.

9.6 EXPORT OF PAKISTAN

Export efforts have been regarded as one of the major national commitment by
the Government and attached great importance to export promotion in order to
increase foreign exchange earnings. Number of concession and incentives has
been given by government to promote exports, which leads to economic
development. Inspire of different measures taken by government to boost up
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exports but still our imports are higher than exports and balance of payment is not
in our favor. Important exports of Pakistan are given below:
1. Cotton Yarn
Cotton yarn is at the top of exports list. It is considered as important items of our
country. Customer of our cotton yarn are UK, USA, Hong Kong, Germany, Sudan.

2. Cotton Cloth
Another important export item is cotton cloth. Its export is increasing every year.
Major customers of cotton clothes are Hong Kong, Germany, United Kingdom,
and United States of America.

3. Ready made garments

Pakistan is producing various kinds of ready made garments which are very
popular in foreign countries. The main customers are United States of America,
European, and Middle Eastern Countries.

4. Rice
Rice is the major export of our country. Major buyers of Rice are Middle East
Countries, European and some African countries.

5. Carpet, Rugs, and Mats

Pakistan has earning a large amount of foreign exchange through exports of
carpet, rugs and mates. The carpets, rugs and mats are exported to Germany,
Switzerland, USA, France, UK, Belgium, and Italy etc.

6. Raw Cotton
The main customers of raw cotton are China, Japan, Hong Kong, Singapore, Italy,
Indonesia, Belgium and Bangladesh.

7. Fish & Fish Preparation

A large number of fishe are caught from sea in our country and excess amount is
exported to Middle East and South Asian Countries.

8. Petroleum Products
Pakistan has two oil refineries at Karachi, where crude petroleum is imported and
a number of petroleum products are produced. Surplus petroleum products then
exported to Turkey, Singapore, and Sri Lanka etc.

9. Leather and Hides

Pakistan export leather and hides every year. Mostly it is exported to Italy, Spain,
Japan, China, and Romania etc.

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Structure of Exports ($ million)

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9.7 IMPORTS OF PAKISTAN

1. Machinery
Pakistan is at developing stage so; we have to import modern machinery to meet
the demand of various industries. Machinery is generally imported from USA,
Japan and other European countries.

2. Chemicals and Drugs

Pakistan is mainly depending upon agriculture sector for the purpose of higher
yield sprays and chemicals are required. For meeting this purpose chemicals and
drugs are imported from Japan, Germany, UK, USA, and other European
countries.

3. Tea
Pakistan produces very small quantity of tea which is not enough to meet our
requirement. Many tea companies imported tea from Bangladesh, Sri Lanka,
India, and Kenya.

4. Paper and Paper Products

Papers mills have been set but these are not enough for meeting requirements.
Papers products are imported from Canada, Japan, Sweden, and USA.

5. Mineral Oil
Pakistan is not self-sufficient in mineral oil requirements. Our own production
only meets approximately 25% of country’s requirement. So to meet our
requirements mineral oil is imported from Saudi Arabia, Iran, UAE and other
Middle East countries.

6. Transport Equipment’s
Transport equipment’s are imported from Japan, Italy and other countries.

7. Edible Oil
The production of edible oil is not enough to meet the requirements of our Ghee
industry. Government of Pakistan takes sufficient measures to boost up the
production of oil seeds. For meeting our requirements edible oil has been
imported. Soybean oil from USA and Palm oil from Malaysia and Indonesia.

8. Dyes & Colors

Various industries use dyes and colors in their production i.e. textile and printing
etc. So to meets the requirements of these industries dyes and colors are imported
from USA, UK and Japan.
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Structure of Imports ($Million)

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Major Trade Partners of Pakistan

The following is a list of Pakistan's main trading partners as of July 2017.

Percentage Percentage of total
Country Percentage of Exports
of Imports Trade
China 81 11 16.9

Saudi Arabia 12.2 8.5 9.0

United Arab Emirates 12.1 8.5 10.9

Europe 10.4 18.2 13.0

Malaysia 9 0.9 2.9

Kuwait 6.3 0.07 4.4

Singapore 4.1 0.3 2.8

India 3.7 2.1 3.2

United States 3.7 13.6 6.7

Japan 3.6 1.6 2.9

Iran 3.4 1.8 2.9

Afghanistan 0.3 7.6 2.8

SUMMARY
The international trade is the exchange of goods and services across international
boundaries of countries. It is exchange of goods and services among different
nations. Industrialization, including transportation, globalization and outsourcing
are all having major impact on the international trade. Without international trade,
nations would be bounded to consume the goods & services produced in their
own country. Instead of importing the factors of production countries prefer to
import Finished Products that required fulfilling the needs their people.

Pakistan has bilateral and multilateral trade agreements with many nations and
international organizations. Pakistan is a member of WTO, part of the South
Asian Free Trade Area agreement and the China-Pakistan Free Trade agreement.
Fluctuating world demand for its exports, domestic political uncertainty, and the
impact of occasional droughts on its agricultural production have all contributed
to variability in Pakistan's trade deficit. Free Trade Agreements (FTAs) of
Pakistan with other countries have been explained.

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Role of foreign trade in economic development of Pakistan has been explained in
detail. Major imports and exports have listed down in detail.

Logistics is generally the detailed organization and implementation of a complex

operation. In a general, logistics is the management of the flow of goods between
the point of production and the point of consumption in order to meet needs of
customers or corporations.

SELF-ASSESSMENT QUESTIONS

1. Explain the foreign trade of Pakistan and discuss the classification of trade.

2. Discuss in detail the role of Trade Development Authority of Pakistan.

3. Define Free Trade Agreements (FTAs) and discuss the role of foreign trade.

4. What are the main producers and documents of foreign trade?

5. Write a detail note on import and export of Pakistan.

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