Trajectories of Exports and Imports for Selected South Asian Countries: A Time Series Visual Analysis

Author

Zahid Asghar

Published

June 24, 2024

In this post, I will examine India, Pakistan, Sri Lanka, and Bangladesh exports and imports from 1980 to 2023. Exports are a crucial indicator of a country’s competitiveness in the global market, while imports reflect the level of consumption and dependence on foreign goods and services. A healthy economy often features high exports supporting its imports, signifying robust economic growth. Additionally, I will include an analysis of exports per capita, which provides a more granular view of economic performance by reflecting the average export value per person. I will also delve into how Pakistan's performance in terms of exports and imports as a percentage of GDP and exports per capita compared to that of India, Sri Lanka, and Bangladesh.

Exports and Imports as a Percentage of GDP

Before we delve into the analysis, let’s first load the required libraries and define the country codes and indicators for the analysis.

[1] 8

character(0)

Once we have the data, we can start by loading the data and examining the first few rows to understand its structure.

Visualizing the Trends

Lets plot exports and imports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh.

Code

ggplot(sa_data_short, aes(x = year, y = exports_of_gdp, color = country)) +
  geom_line(linewidth=0.8) +
  scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) +
  labs(title = "Exports as a Percentage of GDP (1980-2023)",
       x = "Year",
       y = "Exports of Goods and Services (% of GDP)",
       color = "Country") +
  theme_minimal() + theme(legend.position = "top")

Figure 1: Trends in exports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh

Figure 1 shows that Sri Lanka has the highest exports as a percentage of GDP, followed by India, Bangladesh and Pakistan early 2000 to-date. The trends show fluctuations over the years, with Sri Lanka experiencing the most significant variations. Pakistan has last its trend in early 2000s, while India and Bangladesh have been on a steady increase. Bangladesh has recently gone to a little awkward trend.

Next, I will plot the trends in exports per capita for the four countries to see how the average export value per person has changed over time.

Code

ggplot(sa_data_short, aes(x = year, y = exports_per_capita, color = country)) +
  geom_line(linewidth=0.8) +
  scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) +
  labs(title = "Exports per Capita (1980-2023)",
       x = "Year",
       y = "Exports per Capita (Current US$)",
       color = "Country") +
  theme_minimal() + theme(legend.position = "top")

Figure 2: Trends in exports per capita for India, Pakistan, Sri Lanka, and Bangladesh

The trends in exports per capita, as shown in Figure 2, indicate that Sri Lanka has the highest average export value per person, followed by India, Bangladesh, and Pakistan. Bangladesh has shown steady growth and surpasses Pakistan, which has the lowest export per capita among the four, indicating lesser productivity and competitiveness internationally.

Imports

Code

#| fig-align: center
ggplot(sa_data_short, aes(x = year, y = imports_of_gdp, color = country)) +
  geom_line(linewidth=0.8) +
  scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) +
  labs(title = "Imports as a Percentage of GDP (1980-2023)",
       x = "Year",
       y = "Imports of Goods and Services (% of GDP)",
       color = "Country") +
  theme_minimal() + theme(legend.position = "top")

Figure 3: Trends in imports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh

The trends in imports as a percentage of GDP, as shown in Figure 3, indicate that all of the four countries have almost same level of imports as a percentage of GDP. Nevertheless, situation for Pakistan is worrisome as it has import as percentage of GDP has same level as that of other countries but its export as percentage of GDP is lowest among the four countries. This indicates that Pakistan is importing more than it is exporting, which is not a sustainable economic model. This does not imply that Pakistan should focus on reducing imports, but it should focus on increasing exports to balance the trade deficit. I will explain this in more detail in the next section.

Now I plot import per capita for the four countries to see how the average import value per person has changed over time.

Code

ggplot(sa_data_short, aes(x = year, y = imports_per_capita, color = country)) +
  geom_line(linewidth=0.8) +
  scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) +
  labs(title = "Imports per Capita (1980-2023)",
       x = "Year",
       y = "Imports per Capita (Current US$)",
       color = "Country") +
  theme_minimal() + theme(legend.position = "top")

Figure 4: Trends in imports per capita for India, Pakistan, Sri Lanka, and Bangladesh

Visualizing Trade Balance

Finally, I will plot the trends in exports and imports as a percentage of GDP for India, Pakistan, and Bangladesh to have better understanding of the trade balance of these countries.

Code

ggplot(sa_data_short, aes(x = year, y = exports_of_gdp, color = country)) +
  geom_line(linewidth=0.8) +
  geom_line(aes(x = year, y = imports_of_gdp, color = country), linetype = "dashed", linewidth=0.8) +
  scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) +
  labs(title = "Exports and Imports as a Percentage of GDP (1980-2023)",
       x = "Year",
       y = "Exports and Imports of Goods and Services (% of GDP)",
       color = "Country") +
  theme_minimal() + theme(legend.position = "top")+
  facet_wrap(~country)

Figure 5: Trends in exports and imports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh

Figure 8 import as a percentage of GDP is higher than the export as a percentage of GDP for all four countries, indicating that these countries are importing more than they are exporting. This is not a sustainable economic model, as it can lead to a trade deficit and a negative balance of payments and may result in economic instability. India has this gap very small, while Pakistan has the highest gap among the four countries. This does not imply that Pakistan should focus on reducing imports, but it should focus on increasing exports to balance the trade deficit. I will explain this in more detail in the next section.

Code

library(patchwork)
# Filter data for each country
india_data <- subset(sa_data_short, country == "India")
pakistan_data <- subset(sa_data_short, country == "Pakistan")
bangladesh_data <- subset(sa_data_short, country == "Bangladesh")

# Create individual plots with blue for exports and red for imports
plot_india <- ggplot(india_data, aes(x = year)) +
  geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) +
  geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) +
  scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) +
  labs(title = "India",
       x = "",
       y = "% of GDP",
       color = "Indicator") +
  theme_minimal() + theme(legend.position = "top") +
  ylim(0, 35)  # Set y-axis limits to keep vertical scale consistent

plot_pakistan <- ggplot(pakistan_data, aes(x = year)) +
  geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) +
  geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) +
  scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) +
  labs(title = "Pakistan",
       x = "",
       y = "% of GDP",
       color = "Indicator") +
  theme_minimal() + theme(legend.position = "none") +
  ylim(0, 35)  # Set y-axis limits to keep vertical scale consistent

plot_bangladesh <- ggplot(bangladesh_data, aes(x = year)) +
  geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) +
  geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) +
  scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) +
  labs(title = "Bangladesh",
       x = "",
       y = "% of GDP",
       color = "Indicator") +
  theme_minimal() + theme(legend.position = "none") +
  ylim(0, 35)  # Set y-axis limits to keep vertical scale consistent

Code

# Combine the plots into one plot with a single title
combined_plot <- (plot_india + plot_pakistan + plot_bangladesh) +
  plot_annotation(
    title = "Exports and Imports as a Percentage of GDP (1980-2023)",
    caption = "By Zahid Source: World Bank Data",
    theme = theme(plot.title = element_text(size = 16, hjust = 0.5))
  )

# Print the combined plot
print(combined_plot)

Figure 6 illustrate the trends in exports and imports as a percentage of GDP for India, Pakistan, and Bangladesh from 1980 to 2023.

Pakistan Trade Balance

Code

pakistan <- ggplot(pakistan_data, aes(x = year)) +
  geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) +
  geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) +
  scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) +
  labs(
       x = "",
       y = "% of GDP",
       color = "Indicator") +
  theme_minimal() + theme(legend.position = "top") +
  ylim(5, 25)  # Set y-axis limits to keep vertical scale consistent
pakistan + 
  plot_annotation(
    title = "Exports and Imports as a Percentage of GDP (1980-2023)",
    caption = "By Zahid Source: World Bank Data",
    theme = theme(plot.title = element_text(size = 16, hjust = 0.5))
  )

So long as blue line not move above/close red line, Pakistan is in trouble. — Figure 7: Exports and Imports as a Percentage of GDP for Pakistan (1980-2023)

The blue and red lines in the Figure 7 represent exports and imports as a percentage of GDP for Pakistan from 1980 to 2023. As long as the blue line (exports) does not rise to meet or exceed the red line (imports), it indicates ongoing economic challenges for Pakistan.

The relationship between exports and imports as depicted by the blue and red lines on the graph for Pakistan highlights significant economic implications and challenges. A persistently lower exports line (blue) compared to the imports line (red) indicates a trade deficit, where Pakistan spends more on imports than it earns from exports. This scenario can lead to a series of economic challenges, such as increased foreign debt as the country may need to borrow to cover the deficit. Additionally, a trade deficit can contribute to the depreciation of the national currency, making imports costlier and potentially driving inflation. This economic condition also exposes Pakistan to greater vulnerability to global economic shifts, impacting domestic prices and economic stability. To mitigate these issues, it is vital for policymakers to focus on strategies that can boost export growth, enhance the competitiveness of domestic industries, and achieve a more balanced trade equation.

Export and Import Per Capita Comparison

Figure 8: exports and imports per capita

As Figure 8, Pakistan is positioned at the lower end of both axes, Pakistan has one of the lowest export and import per capita figures among the countries listed. This suggests that despite being a populous country, its international trade per person is relatively limited. This could be due to various factors including but not limited to economic policies, exchange rates, low productive human capital, market accessibility, production capabilities, and external trade relationships. This low level of trade per capita has been impacting the country’s overall economic growth and development. High level of focus should be placed on increasing export as it will not only help in reducing trade deficit but also create jobs, increase GDP, and improve the overall economic condition of the country.

Suppressing imports with harsh measures without boosting exports is akin to starving oneself to lose weight or alleviate stomach pain. The effective approach to weight loss includes healthy eating and exercise, much like addressing stomach pain requires not just medical consultation but sometimes taking bitter pills or undergoing surgery. Similarly, the best strategy for improving trade balance is to enhance exports through systematic processes, rather than relying on quick fixes that have proven ineffective over the past three decades.

Summary

Starting with India, the analysis shows a steady increase in both exports and imports from the 1980s to the early 2000s. When Indian economy growth rate increased its trade deficit increased little but with high growth rare its manageable. The post-2000 era saw a significant rise in both exports and imports, reflecting India’s economic liberalization and integration into the global economy.

For Pakistan, story of a persistent trade deficit has put high economic pressures because it has low economic growth while trade gap is wide. From the 1980s to the early 2000s, both imports and exports rose and fell together, but exports were consistently lower than imports. This pattern continued post-2000, with a notable divergence around 2010 when exports began to decline and imports peaked around 2012. This divergence suggests significant economic pressures or policy changes that increased import dependence. Although exports showed some recovery post-2010, they remained low compared to imports, reflecting ongoing economic challenges.

Bangladesh, on the other hand, shows a somewhat different trajectory with a more balanced growth between imports and exports. From the 1980s to the early 2000s, both metrics increased gradually in a more synchronized manner compared to India and Pakistan. Post-2000, both exports and imports rose sharply, indicating robust economic growth. However, similar to its neighbors, imports often outpaced exports, leading to a trade deficit. The period from 2010 to 2023 saw exports stabilizing while imports fluctuated, suggesting economic adjustments and potential vulnerabilities.

Conclusion

The economic implications for these countries are significant. For India, the trade deficit could strain its economy but with high economic growth rate, foreign exchange reserves and its resilience to external shocks, it will manage. India needs policies that boost exports through improved infrastructure, reduced logistical costs, and enhanced product quality.

In Pakistan, the persistent trade deficit could lead to increased borrowing and economic vulnerability. Boosting exports through incentives for local industries, improving trade agreements, and investing in technology and education can help bridge the gap in the long run.

Addressing the challenges of stagnant exports is not just about economic policy but about shaping a vision for Pakistan’s role in the global economy. A concerted effort from all stakeholders, including the government, business leaders, and international partners, is essential to navigate this quagmire. With the right strategies and interventions, Pakistan can transform its export sector into a key driver of economic growth and prosperity, paving the way for a more robust economic future.

--- title: "Trajectories of Exports and Imports for Selected South Asian Countries: A Time Series Visual Analysis" #title-block-banner: images/import_export.jpg title-block-banner-color: "#FFFFFF" author: "Zahid Asghar" date: "today" format: html: theme: cerulean css: title.css toc: true toc-float: true toc_depth: 3 code-fold: true code-tools: true number_sections: true highlight-style: dracula bibliography: references.bib execute: freeze: auto warning: false message: false echo: true --- In this post, I will examine India, Pakistan, Sri Lanka, and Bangladesh exports and imports from 1980 to 2023. Exports are a crucial indicator of a country's competitiveness in the global market, while imports reflect the level of consumption and dependence on foreign goods and services. A healthy economy often features high exports supporting its imports, signifying robust economic growth. Additionally, I will include an analysis of exports per capita, which provides a more granular view of economic performance by reflecting the average export value per person. I will also delve into how `Pakistan's` performance in terms of exports and imports as a percentage of GDP and exports per capita compared to that of India, Sri Lanka, and Bangladesh. ### Exports and Imports as a Percentage of GDP Before we delve into the analysis, let's first load the required libraries and define the country codes and indicators for the analysis. ```{r} #| echo: false # Load the required libraries library(doParallel) library(foreach) Clusters <- makeCluster(detectCores() - 1) # convention to leave 1 core for OS registerDoParallel(Clusters) options(Ncpus = detectCores() - 1, mc.cores = detectCores() - 1, scipen = 999) detectCores() Packages <- c( "fastverse" , "furrr" , "janitor" , "pdftools" , "readxl" , "splitstackshape" , "stringi" , "stringr" , "tidytable" , "tidyverse" , "writexl", "haven" ) Packages[!(Packages %in% installed.packages()[ ,"Package"])] if (!require("pacman")) install.packages("pacman") pacman::p_load(Packages, character.only = TRUE) suppressMessages(source("001LoadingRPackages.R")) library(WDI) # Define country codes for India (IN), Pakistan (PK), Sri Lanka (LK), and Bangladesh (BD) countries <- c("IN", "PK", "LK", "BD") # Define the indicators indicators <- c( GDP = "NY.GDP.MKTP.CD", # GDP in current US$ Population = "SP.POP.TOTL", # Total population Life_Expectancy = "SP.DYN.LE00.IN", # Life expectancy at birth, total (years) Exports_of_GDP = "NE.EXP.GNFS.ZS", # Exports of goods and services (% of GDP) Imports_of_GDP = "NE.IMP.GNFS.ZS", # Imports of goods and services (% of GDP) Total_Exports = "NE.EXP.GNFS.CD", # Total exports of goods and services (current US$) Total_Imports = "NE.IMP.GNFS.CD" # Total imports of goods and services (current US$) ) # sa_data <- WDI(country = countries, indicator = indicators, start = 1980, end = 2023, extra = TRUE, cache = NULL) ## save the data to a CSV file #write.csv(sa_data, "data/sa_data.csv", row.names = FALSE) ``` Once we have the data, we can start by loading the data and examining the first few rows to understand its structure. ```{r} #| echo: false # Read the data from the CSV file sa_data <- read.csv("data/sa_data.csv") # View the first few rows of the data #colnames(sa_data) ``` ```{r} #| echo: false #| eval: false head(sa_data) ``` ```{r} #| echo: false #names(sa_data) # clean names sa_data <- sa_data |> janitor::clean_names() #colnames(sa_data) ``` ```{r} #| echo: false # Calculate exports and imports per capita sa_data <- sa_data %>% group_by(country, year) %>% mutate(exports_per_capita = total_exports / population, imports_per_capita = total_imports / population) %>% ungroup() ``` ```{r} #| echo: false ## Select the relevant columns for analysis sa_data_short <- sa_data %>% select(country, year, exports_of_gdp, imports_of_gdp, exports_per_capita, imports_per_capita) #head(sa_data_short) ``` ## Visualizing the Trends Lets plot exports and imports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh. ```{r} #| label: fig-export #| fig-cap: Trends in exports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh #| fig-align: center ggplot(sa_data_short, aes(x = year, y = exports_of_gdp, color = country)) + geom_line(linewidth=0.8) + scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) + labs(title = "Exports as a Percentage of GDP (1980-2023)", x = "Year", y = "Exports of Goods and Services (% of GDP)", color = "Country") + theme_minimal() + theme(legend.position = "top") ``` @fig-export shows that Sri Lanka has the highest exports as a percentage of GDP, followed by India, Bangladesh and Pakistan early 2000 to-date. The trends show fluctuations over the years, with Sri Lanka experiencing the most significant variations. Pakistan has last its trend in early 2000s, while India and Bangladesh have been on a steady increase. Bangladesh has recently gone to a little awkward trend. Next, I will plot the trends in exports per capita for the four countries to see how the average export value per person has changed over time. ```{r} #| label: fig-export-per-capita #| fig.cap: Trends in exports per capita for India, Pakistan, Sri Lanka, and Bangladesh #| fig-align: center ggplot(sa_data_short, aes(x = year, y = exports_per_capita, color = country)) + geom_line(linewidth=0.8) + scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) + labs(title = "Exports per Capita (1980-2023)", x = "Year", y = "Exports per Capita (Current US$)", color = "Country") + theme_minimal() + theme(legend.position = "top") ``` The trends in exports per capita, as shown in @fig-export-per-capita, indicate that Sri Lanka has the highest average export value per person, followed by India, Bangladesh, and Pakistan. Bangladesh has shown steady growth and surpasses `Pakistan`, which has the lowest export per capita among the four, indicating lesser productivity and competitiveness internationally. ### Imports ```{r} #| label: fig-import #| fig.cap: Trends in imports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh #| fig-align: center ggplot(sa_data_short, aes(x = year, y = imports_of_gdp, color = country)) + geom_line(linewidth=0.8) + scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) + labs(title = "Imports as a Percentage of GDP (1980-2023)", x = "Year", y = "Imports of Goods and Services (% of GDP)", color = "Country") + theme_minimal() + theme(legend.position = "top") ``` The trends in imports as a percentage of GDP, as shown in @fig-import, indicate that all of the four countries have almost same level of imports as a percentage of GDP. Nevertheless, situation for `Pakistan` is worrisome as it has import as percentage of GDP has same level as that of other countries but its export as percentage of GDP is lowest among the four countries. This indicates that Pakistan is importing more than it is exporting, which is not a sustainable economic model. This does not imply that Pakistan should focus on reducing imports, but it should focus on increasing exports to balance the trade deficit. I will explain this in more detail in the next section. Now I plot import per capita for the four countries to see how the average import value per person has changed over time. ```{r} #| label: fig-import-per-capita #| fig-cap: Trends in imports per capita for India, Pakistan, Sri Lanka, and Bangladesh #| fig-align: center ggplot(sa_data_short, aes(x = year, y = imports_per_capita, color = country)) + geom_line(linewidth=0.8) + scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) + labs(title = "Imports per Capita (1980-2023)", x = "Year", y = "Imports per Capita (Current US$)", color = "Country") + theme_minimal() + theme(legend.position = "top") ``` ## Visualizing Trade Balance Finally, I will plot the trends in exports and imports as a percentage of GDP for India, Pakistan, and Bangladesh to have better understanding of the trade balance of these countries. ```{r} #| label: fig-export-import #| fig.cap: Trends in exports and imports as a percentage of GDP for India, Pakistan, Sri Lanka, and Bangladesh #| fig-scap: Source World Bank #| fig-align: center ggplot(sa_data_short, aes(x = year, y = exports_of_gdp, color = country)) + geom_line(linewidth=0.8) + geom_line(aes(x = year, y = imports_of_gdp, color = country), linetype = "dashed", linewidth=0.8) + scale_color_manual(values = c("Pakistan" = "darkgreen", "India" = "blue", "Bangladesh" = "red", "Sri Lanka"="purple")) + labs(title = "Exports and Imports as a Percentage of GDP (1980-2023)", x = "Year", y = "Exports and Imports of Goods and Services (% of GDP)", color = "Country") + theme_minimal() + theme(legend.position = "top")+ facet_wrap(~country) ``` @fig-export-import import as a percentage of GDP is higher than the export as a percentage of GDP for all four countries, indicating that these countries are importing more than they are exporting. This is not a sustainable economic model, as it can lead to a trade deficit and a negative balance of payments and may result in economic instability. India has this gap very small, while Pakistan has the highest gap among the four countries. This does not imply that Pakistan should focus on reducing imports, but it should focus on increasing exports to balance the trade deficit. I will explain this in more detail in the next section. ```{r} library(patchwork) # Filter data for each country india_data <- subset(sa_data_short, country == "India") pakistan_data <- subset(sa_data_short, country == "Pakistan") bangladesh_data <- subset(sa_data_short, country == "Bangladesh") # Create individual plots with blue for exports and red for imports plot_india <- ggplot(india_data, aes(x = year)) + geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) + geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) + scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) + labs(title = "India", x = "", y = "% of GDP", color = "Indicator") + theme_minimal() + theme(legend.position = "top") + ylim(0, 35) # Set y-axis limits to keep vertical scale consistent plot_pakistan <- ggplot(pakistan_data, aes(x = year)) + geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) + geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) + scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) + labs(title = "Pakistan", x = "", y = "% of GDP", color = "Indicator") + theme_minimal() + theme(legend.position = "none") + ylim(0, 35) # Set y-axis limits to keep vertical scale consistent plot_bangladesh <- ggplot(bangladesh_data, aes(x = year)) + geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) + geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) + scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) + labs(title = "Bangladesh", x = "", y = "% of GDP", color = "Indicator") + theme_minimal() + theme(legend.position = "none") + ylim(0, 35) # Set y-axis limits to keep vertical scale consistent ``` ```{r} #| label: fig-combined-plot #| fig-caption: Exports and imports as a percentage of GDP # Combine the plots into one plot with a single title combined_plot <- (plot_india + plot_pakistan + plot_bangladesh) + plot_annotation( title = "Exports and Imports as a Percentage of GDP (1980-2023)", caption = "By Zahid Source: World Bank Data", theme = theme(plot.title = element_text(size = 16, hjust = 0.5)) ) # Print the combined plot print(combined_plot) ``` @fig-combined-plot illustrate the trends in exports and imports as a percentage of GDP for India, Pakistan, and Bangladesh from 1980 to 2023. ### Pakistan Trade Balance ```{r} #| label: fig-pk #| fig-cap: Exports and Imports as a Percentage of GDP for Pakistan (1980-2023) #| fig-alt: "So long as blue line not move above/close red line, Pakistan is in trouble." pakistan <- ggplot(pakistan_data, aes(x = year)) + geom_line(aes(y = exports_of_gdp, color = "Exports"), linewidth=0.8) + geom_line(aes(y = imports_of_gdp, color = "Imports"), linewidth=0.8) + scale_color_manual(values = c("Exports" = "blue", "Imports" = "red")) + labs( x = "", y = "% of GDP", color = "Indicator") + theme_minimal() + theme(legend.position = "top") + ylim(5, 25) # Set y-axis limits to keep vertical scale consistent pakistan + plot_annotation( title = "Exports and Imports as a Percentage of GDP (1980-2023)", caption = "By Zahid Source: World Bank Data", theme = theme(plot.title = element_text(size = 16, hjust = 0.5)) ) ``` The blue and red lines in the @fig-pk represent exports and imports as a percentage of GDP for Pakistan from 1980 to 2023. As long as the blue line (exports) does not rise to meet or exceed the red line (imports), it indicates ongoing economic challenges for Pakistan. The relationship between exports and imports as depicted by the blue and red lines on the graph for Pakistan highlights significant economic implications and challenges. A persistently lower exports line (blue) compared to the imports line (red) indicates a trade deficit, where Pakistan spends more on imports than it earns from exports. This scenario can lead to a series of economic challenges, such as increased foreign debt as the country may need to borrow to cover the deficit. Additionally, a trade deficit can contribute to the depreciation of the national currency, making imports costlier and potentially driving inflation. This economic condition also exposes Pakistan to greater vulnerability to global economic shifts, impacting domestic prices and economic stability. To mitigate these issues, it is vital for policymakers to focus on strategies that can boost export growth, enhance the competitiveness of domestic industries, and achieve a more balanced trade equation. ### Export and Import Per Capita Comparison ![exports and imports per capita](images/export_per_capita.png){#fig-export-import} As @fig-export-import, Pakistan is positioned at the lower end of both axes, Pakistan has one of the lowest export and import per capita figures among the countries listed. This suggests that despite being a populous country, its international trade per person is relatively limited. This could be due to various factors including but not limited to economic policies, exchange rates, low productive human capital, market accessibility, production capabilities, and external trade relationships. This low level of trade per capita has been impacting the country's overall economic growth and development. High level of focus should be placed on increasing export as it will not only help in reducing trade deficit but also create jobs, increase GDP, and improve the overall economic condition of the country. > Suppressing imports with harsh measures without boosting exports is akin to starving oneself to lose weight or alleviate stomach pain. The effective approach to weight loss includes healthy eating and exercise, much like addressing stomach pain requires not just medical consultation but sometimes taking bitter pills or undergoing surgery. Similarly, the best strategy for improving trade balance is to enhance exports through systematic processes, rather than relying on quick fixes that have proven ineffective over the past three decades. ## Summary Starting with **India**, the analysis shows a steady increase in both exports and imports from the 1980s to the early 2000s. When Indian economy growth rate increased its trade deficit increased little but with high growth rare its manageable. The post-2000 era saw a significant rise in both exports and imports, reflecting India's economic liberalization and integration into the global economy. For **Pakistan**, story of a persistent trade deficit has put high economic pressures because it has low economic growth while trade gap is wide. From the 1980s to the early 2000s, both imports and exports rose and fell together, but exports were consistently lower than imports. This pattern continued post-2000, with a notable divergence around 2010 when exports began to decline and imports peaked around 2012. This divergence suggests significant economic pressures or policy changes that increased import dependence. Although exports showed some recovery post-2010, they remained low compared to imports, reflecting ongoing economic challenges. **Bangladesh**, on the other hand, shows a somewhat different trajectory with a more balanced growth between imports and exports. From the 1980s to the early 2000s, both metrics increased gradually in a more synchronized manner compared to India and Pakistan. Post-2000, both exports and imports rose sharply, indicating robust economic growth. However, similar to its neighbors, imports often outpaced exports, leading to a trade deficit. The period from 2010 to 2023 saw exports stabilizing while imports fluctuated, suggesting economic adjustments and potential vulnerabilities. ## Conclusion The economic implications for these countries are significant. For India, the trade deficit could strain its economy but with high economic growth rate, foreign exchange reserves and its resilience to external shocks, it will manage. India needs policies that boost exports through improved infrastructure, reduced logistical costs, and enhanced product quality. In **Pakistan**, the persistent trade deficit could lead to increased borrowing and economic vulnerability. Boosting exports through incentives for local industries, improving trade agreements, and investing in technology and education can help bridge the gap in the long run. Addressing the challenges of stagnant exports is not just about economic policy but about shaping a vision for Pakistan’s role in the global economy. A concerted effort from all stakeholders, including the government, business leaders, and international partners, is essential to navigate this quagmire. With the right strategies and interventions, Pakistan can transform its export sector into a key driver of economic growth and prosperity, paving the way for a more robust economic future.