Explain five measures taken by a country to:
(a) restrict imports
(b) promote exports
Explanation
(a) The measures taken by a country to restrict imports are:
(i) Import licence: The government stipulates that certain goods should only be imported under licence. This limits the number of such goods to be imported.
(ii) Exchange control: Imports can be restricted by making it difficult for importers to get foreign exchange to import certain goods.
(iii) Tariffs: High custom duties could be imposed on imports to discourage their importation.
(iv) Quotas: A limit is set to the number of certain goods that could be imported.
(v) Outright ban: A government may decide to place an embargo on the importation of some goods.
(vi) Subsidies: Government may decide to embark on giving some incentives aimed at helping home industries to produce hitherto imported goods.
(b) The measures taken by a country to encourage or promote export include:
(i) The government could organise trade fairs and exhibitions within and outside the country to attract foreign buyers.
(ii) The government could liberalize the process of granting credit facilities to exporters.
(iii) Subsidies can be granted to industries producing exportable goods.
(iv) Devaluation: The government can lower the value of her currency vis-a-vis foreign currency thus making her country a cheap place to buy from.
(v) The government can provide market intelligence to exporters by providing them with facts and trends in the foreign markets.
(vi) Export credit guarantee: Government may provide insurance cover against bad debts for exporters.
(vii) The government can create an export free zone or export promotion council.
(viii) Governments can also negotiate or join the membership of international trade associations aimed at removing barriers to the free flow of trade.
(ix) The government can remove tariffs on goods presented for export.
(x) Government can embark on the improvement of sea and airport facilities and liberalisation of port bureaucracy.
(xi) The government can establish standard organisations to help improve the quality of goods to meet international standards.