"Balance of Payment Of CountryIntroduction: Balance of payments (BOP) is a record of economic transitions between the residents ofone country and the rest of the world during one year. The balance of payment like all balancesheets must balance. The items, which lead to, an inflow of foreign earnings are placed on thecredit side of the balance sheet, whereas the items, which give, rise to an outflow of foreigncurrency are placed on the debit side. Balance of payment shows the real economic positionof a country.Definition:“Balance of payment is a systematic record of a nation’s total payments to foreign countries,including the price of imports, the outflow of capital and gold, and the total receipts fromabroad, including the price of exports and the inflow of capital and gold.”According to Pas Taylor:Balance of payment refers to the difference between the total payments out of the countryduring a given period of time. These payments are of visible and invisible item (goods andservices)Situation in Pakistan: The country’s balance of payments (BoP) deficit further shrank by 94 per cent to negative$1.267 billion in the first six months of the current fiscal year (2015-16) compared to negative$2.363 billion during the same period last year. International Monetary Fund (IMF) has forecastPakistan’s GDP growth at around 4.0-4.5 per cent in the current fiscal year owing to low pricesof oil in the international market.During last six months the country’s exports have been reduced by 14.40 per cent to $10.822billion in the last six months (July-Dec) from $12.164 billion in the same period last yearMeanwhile, the country’s imports after falling by 7.86 per cent stood at $22.246 billion in July- Dec this year compare to $24.145 billion in the same period last year.Services sector’s export also declined by 5.3 per cent to $2.767 billion against its imports of$3.784 billion.The foreign investors of Pakistani bourses are withdrawing their investment because ofuncertainty in the local markets, He said that that Pakistan’s savings rate is not only low andstagnant but it is lower than its South Asian neighbors. Thus, a surplus or low current accountdeficit, by definition, suggests that Pakistan’s investment rate is also low and hence economicgrowth is not only low but it is stagnant as well.Total investment declined by 50.2 per cent to $864 million during the period while directinvestment increased by 2.2 per cent to $624 million in the last six months.BALANCE OF PAYMENTS OF PAKISTAN LAST 10 YEARSBALANCE OF PAYMENTS(US $ Million)Items 2002- 2003- 2004- 2005- 2007- 2008- 2009- 2010- 2011- 2012- 03 04 05 06 8 09 10 11 12 13Trade -294 -444 -1,208 -4,352 -8,259 -9,495 14,820 - - -8,024balance 12,492 10,144Export 9,140 10,889 12,396 14,401 16,388 17,119 20,207 18,918 14,159 14,218Import 9,434 11,333 13,604 18,753 24,647 26,614 35,027 31,410 24,303 22,242Services -2,617 -2,128 -3,594-5,841 -7,304 -7,968 - -6,420 -7,922 -4,175(net) 10,530Shipment -809 -951 -1,253 -1,713 -2,203 -2,337 -3,087 -2,740 -2,153 -1,994Others -1,405 -1,763 -2,841 -5,142 -6,368 -6,348 -7,329 -5,084 -3,928 -3,100Transfers 4,249 5,737 6,116 8,440 9,914 10,102 11,048 11,019 8,075 9,305(net)Workers 2,389 4,237 3,871 4,168 4,600 5,494 6,451 7,811 5,658 6,551Remittances)4. Current 1,338 3,165 1,314 -1,753 -5,649 -7,361 - -9,395 -8,489 -2,894Account 14,302BalanceLong-term 1,280 1,035 -201 2,562 6,016 10,006 8,427 6,448 4,758 5,031Capital (net)Basic 2,618 4,200 1,113 809 367 2,645 -5,875 -2,947 -3,731 2,137BalanceErrors and 961 909 -137 -854 36 527 -676 310 234 -569Omissions(net)Balance 3,579 5,109 976 -45 403 3,172 -6,551 -2,637 -3,497 1,56RequiringOfficialDebt Relief -925 -520 -95 472 470 1,051 679 -611 -536 -840Exceptional 138 620 -55 -55 -55 100 0 0 0 100Financing Changein -2,792 -5,209 -826 -372 -818 -4,323 5,872 3,249 4,033 -628ReservesExports:Exports amounted to $ 15.9 billion in July-April 2014-15 as against $ 14.7 billion in same periodlast year, higher export of items like rice, fruits and raw cotton due to their improvedproduction in country along with recovery of international demand and exchange ratedepreciation were major reasons for the increase in exports during the period under review. Export Performance, Major Categories($ Million)Particulars Jul y - A p r i l Jul y - A p r i l2013 -14 2014 -15A. Food Group2,727.9 2,547.8Rice 1,807.0 1,681.3Fish & Fish Preparation182.1 193.6Fruits 208.8 134.6Meat & Meat Preparation 81.6 58.4B. Textile Manufactures 8,461.77,905.5Raw Cotton 194.2 80.8Cotton Yarn 1,211.0 916.5Cotton Cloth 1,466.0 1,641.4Knitwear 1,424.2 1,434.3Bed Wear 1,400.0 1,408.6Towels 553.3 527.8Readymade Garments 1,059 1,007.1C. Other Manufactures 2,990.4 2,968.6Carpets. Rugs & mats 117.0 126.7Sports Goods 236.5 227.2Leather Manufactures 368.6 470.9Surgical G. & Med. Inst 190.1 211.7 Chemicals & Pharma 621.6 509.4Engineering Goods 197.1 210.5Jewellery 397.0 195.9Cement 394.2 2.5 475.3All other manufactures 212.5 288.0D. All Other Items 930.8 561.0Total 15,884.1 14,703.3 Imports:Imports Import growth during July-April 2015-16 declined against the corresponding periodlast year. Lower international prices, compressed domestic demand, exchange ratedepreciation and improved production of cotton crops remained the major factors behind theoverall decline in import bill.Among the major import groups: food, machinery and telecomgroups witnessed a decline during July-April 2014-15 while Petroleum, consumer durables, rawmaterials and other items groups witnessed an increase in growth during the period underreview Structure of Imports($ Million)Particulars Jul y - A p r i l Jul y - A p r i l2013 -14 2014 -15A. Food Group 3,539.9 2,785.0Milk & milk food 63.0 67.8Dry fruits 69.8 67.7Tea 198.0 227.8Spices 58.4 60.9Oil (Soybean & Palm Oil) 1,205.4 1,055.Sugar 127.7 191.2B. Machinery Group 4,355.4 3,895.4Power Gen. Machines 1,407.6 1,252.9Office Machines 215.0 185.9Textile Machinery 183.4 221.0Aircraft Ships and 379.7 579.2Agriculture Machinery 78.1 180.0C. Petroleum Group8,017.0 8,118.6Petroleum Products 4,612.4 5,305.3Petroleum Crude 3,404.6 2,813.3D. Consumer Durables 1,411.4 1,502.2 ElectricMachinery 655.9 553.3Road Motor Vehicle755.5 948.9E. Telecom 857.1 598.7F. Others 4,285.6 4,673.0G. Raw Materials 6,454.9 6,549.6Total 28,921.3 28,122.6 CAUSES OF UNFAVOURABLE:? Tough Competition? Anti-dumping Duties? Water Shortage / Mismanagement which results in low crops.? Energy crisis causing low output and closure of many industrial unitswhich reduces the exports.? Political Uncertainty.? Fiscal Policies? Trade Restrictions of developed countries.? Depreciation of Pakistan Rupee.? Inflation? Control on Smuggling? International Cooperation for Market AccessSUGGESTIONS:Pakistan needs a leadership with competence, very strong nerves, clear competence, verystrong nerves, clear understanding of the issues and psyche of the other side of the table,ability understanding of the issues and psyche of the other side of the table, ability to negotiatewith the super powers and come out with a most suitable to negotiate with the super powersand come out with a most suitable package.In balance of payment is difficult but not impossible. It can achieve through installing importsubstitution and export promoting industries. Government should control the forex and checkthe import of luxuries Beggars are never given choices ... Beggars are never given choices ... Leadersmade us beggars, they have Leaders made us beggars, they have 'kashkool' in "