In the 16th century Mercantilism established an economic system of trade that was known as ‘’zero sum game’’. They believed that a country would become economically strong if they will export more goods and minimize the imports of goods by imposing high tariffs or duties. But later classical economists developed ‘’Absolute advantage theory’’ they were more feasible than mercantilists. According to them those country which are cost efficient in some goods, they should produce these products in large amount and should export to others and vice-versa. Both the partners will get benefits from the absolute advantage theory because of low costs.
But in case of Gilgit Baltistan despite of producing large amount of special fruits like apricots, mulberry and cherry etc we didn’t success to sell these products into international market (exports) and large amount of these products are wasted.
One thing we should remember that dependency cause impoverish. Prior in many areas of Gilgit Baltistan especially Shiger, Nagar etc had the capability to produce ample amount of wheat for Gilgit Baltistan region. But with the passage of time government started to demand wheat from Punjab side instead of promoting and improving local production. So people started to move away from that seduced the adroitness of local production level. If GB government would focus on local production of wheat then GB would have been abled to supply to other provinces of Pakistan.
In each sector, good performance will depend on the ability of the people to acquire economic activity, connect to market and the hindrance that hamper the mobility of people and ideas. Why countries like Japan, South Korea etc are rich as compare to North Korea, Somalia. The one major factor is globalization. It is assume the first step towards technology. Due to this countries can easily sell their products in another markets without any barriers that made these countries prosperous in every field whether they are economic or technology.
Lack of division of labor is another issue that hampered growth. We can see this fault throughout in Pakistan and many poor countries. Division of labor is important to surpass production because in division of labor people learn by doing. So if in GB there would be a research center or agriculture university then it would have been easy to research on soil capability, seed fertility and that research center would help to boast up human capital. The role of government to build division of labor is negligible so that automatically impact on the production whether they are related to foresty by conserving and increasing the number of Markhore to increase income generating opportunities such as trophy hunting etc.
Large distance to reach both local and international markets that depress the ability to exports our products at a competitive rate. So many resources which we cannot sell into Pakistan as well as international markets due to large distance. Large distance means the cost of that product will soar that will make our goods less competitive in market.
Allah Almighty bestowed precious stones in the mountains of Gilgit Baltistan like in Shiger and Roundu many of the people are associated with this field. But due to government restrictions and hindrance to sell these precious stones in the international market. So people associated with this field have become pessimists due to government restrictions. Instead of imposing restrictions if government with the help of local people would sell these precious stones and metals in the international market then they would be the source of generating income for both government and local communities which would boast up the economy of both Pakistan and Gilgit Baltistan.
Monopoly is another challenges that hampered the market the market to become competitive because the Amis of monopolies is to gain profit maximization. So these monopoly market should be converted to privatization and more firms should welcome to compete with these private firms. That will reduce the burden of both federal and GB government budget. This amount should be allocated to welcome new technology in the field of agriculture and Industrialization.
• There should be infrastructure development and selective investment. Policy to change the dual economy and rapid movement in the field of technology and industries is mandatory.
• There should be free and compulsory education in GB atleast at secondary level. After 1960s South Korea and Taiwan adopted 6 years compulsory education and the enrolment of girls were impressive. So most of these countries students topped PISA exam and wins international prizes.
• There should be less intervention of government that will change the pessimists approach of an investors and will help to boast up the economy.