Then:

“Economy is recovering because exports are going up.”

Now:

“Economy is recovering because imports have gone up.”

Let’s get the story straight: we’ll know our economy has recovered when we see our real incomes increase. \\1

For the record, with a flexible exchange rate, nothing wrong if imports go up.

When Pakistanis buy Japanese cars, Pakistanis are better off because they get to drive better cars—vs the crappy Pakistani cars that a system of subsidies for local manufacturers enforce upon them. \\2

When Pakistanis buy Roquefort, Pakistanis are better off because they get to eat authentic French blue cheese—vs ‘French’ cheese produced in Punjab.

Note: this is a crude example so take it in your stride. \\3

Moreover, imports allow Pakistani manufacturers to access machinery and inputs—unavailable domestically—to produce goods and services and grow. \\4

Any imbalances feed into the exchange rate, which will adjust to counter the effect—hence the argument to keep it flexible. \\5

When you heavily tax imports, the only people who lose out are Pakistani consumers.

We need to temper the Mercantilist rhetoric and appreciate how access to foreign consumer markets make us better off. \\6

And, to gauge how well our economy is doing, let’s focus on changes in our real income and its distribution. \\end