Which of the following statements about Pakistan’s foreign exchange are correct?
(A) Most of its foreign exchange earnings came from remittances from Pakistani workers in the Middle-east.
(B) It earned foreign exchange by exporting highly volatile agricultural products.
(C) Sustainable export of manufactured goods was its main source of foreign exchange.
(D) There was growing dependence on foreign loans and increasing difficulty in paying them back.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (D) only
Pakistan’s foreign exchange did not rest on a steady base.
(A) Most of its foreign exchange earnings came from remittances from Pakistani workers in the Middle-east. — Correct. Money sent home by Pakistani workers in the Middle-east was the main source.
(B) It earned foreign exchange by exporting highly volatile agricultural products. — Correct. Its exports were mostly farm products, whose earnings went up and down.
(C) Sustainable export of manufactured goods was its main source of foreign exchange. — Incorrect. Steady exports of manufactured goods are what a country needs to stop worrying about foreign exchange; Pakistan did not have them.
(D) There was growing dependence on foreign loans and increasing difficulty in paying them back. — Correct. Pakistan relied more and more on foreign loans and found it harder to repay them.
NCERT (2026-27): “8.6 Development Strategies — an Appraisal … You will recall that India had to borrow from the IMF and World Bank to set right its balance of payments crisis; foreign exchange is an essential component for any country and it is important to know how it can be earned. If a country is able to build up its foreign exchange earnings by sustainable export of manufactured goods, it need not worry. In Pakistan most foreign exchange earnings came from remittances from Pakistani workers in the Middle-east and the exports of highly volatile agricultural products; there was also growing dependence on foreign loans on the one hand and increasing difficulty in paying back the loans on the other. …” |