consequences. The total export from East Pakistan during this period amounted to Rs. 2,239.5 crores whilst import amounted to Rs. 1,630.89 crores. During these years East Pakistan had a surplus of Rs. 608.7 crores. During the same period the value of exports from West Pakistan amounted to Rs. 1759.7 crores and her imports amounted to Rs. 3110.5 crores. She had a deficit of Rs. 2039.8 crores.
These figures show that the external balance of East Pakistan has been exceedingly favorable while that of West Pakistan has been extremely unfavorable. But East Pakistan was not allowed to use her favorable balance of trade for the benefit of her people. This had a number of serious consequences for East Pakistan. First, East Pakistan was not allowed to import goods worth Rs. 608.7 crores during the last 21 years. She could not utilize on average, a sum of Rs. 30 crores of her foreign exchange earnings annually for her own benefit. Hence, she was deprived of the opportunity of deriving the benefits that might have accrued to her out of the investment of Rs. 608.7 crores in 21 years. Second, international trade means exchange of good for goods or egress and ingress of goods. As East Pakistan could not import goods it created a vacuum in East Pakistan. The gap was filled up by the release of artificial paper currency which created a highly inflationary situation causing untold hardships to the common man. Third, East Pakistan's surplus foreign exchange earnings were utilized for importing capital goods for building up industries in West Pakistan, the products of which were for consumption. These figures not only describe but also explain the huge disparity in the industrial development of the two wings.
This inter-wing disparity has been the direct result of utilizing East Pakistan's foreign exchange earnings for the benefit of importers in West Pakistan through import controls and liberal bank credit in West Pakistan.
Fourth, East Pakistan has been surrendering a significant portion of her foreign exchange earnings to pay for goods and services purchased from West Pakistan. There is no doubt that the value of foreign exchange is much higher and that it cannot be equated with internal purchases in rupees. East Pakistan would have been much better off economically, if instead of being required to make purchases from West Pakistan, it could use its foreign earnings to buy from abroad were prices have been most significantly lower. It is also true that capital goods are obtainable in the international market, hence surrendering of scarce foreign exchange earnings by East Pakistan has meant a disastrous economic loss through a reduction of her imports of capital goods.
Fifth, in so far as the surrendering of foreign exchange earnings has caused the import of her capital goods to be financed out of foreign aids and loans, and additional cost is involved in that East Pakistan has to pay interest on foreign loans, and has to pay a price for her imports which is much higher than the international competitive price.
It is a universally known phenomenon that the non-availability of capital goods has been the most serious bottleneck that has impeded the pace of development in East Pakistan.
This has been due to the policies in regard to import controls and allocation of foreign exchange earnings pursued by the Central Government during the last 21 years, is
