NCERT Class 11 Economics — Chapter 9: Comparative Development Experiences of India and its Neighbours

mcqeasy

Which one of the following has historically been a significant source of foreign exchange earnings for the Pakistani economy?

Official previous-year question

Verified 1 Aug 2026.

Options

ATourism revenue from historical sites.
BExport of high-technology software services.
CForeign Direct Investment in the manufacturing sector.
DRemittances from Pakistani workers in the Middle-east.

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Solution

The correct option is Remittances from Pakistani workers in the Middle-east..

Explanation

Foreign exchange earnings are critical for maintaining the stability of the Balance of Payments (BoP) and financing imports. For many developing economies, inward remittances from the diaspora constitute a major component of the Current Account, often serving as a buffer against trade deficits.

Option Analysis

Export of high-technology software services. is incorrect: While the export of software services is a growing sector in Pakistan, it has not historically been a primary source of foreign exchange compared to traditional exports (like textiles) or remittances. This characteristic is more distinctively associated with the Indian economy.
Remittances from Pakistani workers in the Middle-east. is correct: Remittances have historically been the most resilient and significant source of foreign exchange for Pakistan. A vast majority of the Pakistani diaspora resides in the Middle East, particularly in Saudi Arabia and the United Arab Emirates. The inflows from these workers play a crucial role in bridging the trade gap and supporting the country's foreign exchange reserves.
Foreign Direct Investment in the manufacturing sector. is incorrect: Foreign Direct Investment (FDI) in Pakistan has remained relatively low and volatile due to macroeconomic instability and structural challenges. It has not consistently provided the volume of foreign exchange that remittances have.
Tourism revenue from historical sites. is incorrect: Although Pakistan possesses significant historical and religious tourism sites, the tourism sector has not historically generated substantial foreign exchange earnings comparable to remittances, largely due to infrastructural and security challenges.

Key Takeaway

Remittances, specifically from the Gulf Cooperation Council (GCC) countries, are a structural pillar of Pakistan's external sector, often exceeding earnings from major export industries and serving as a vital stabilizer for the Balance of Payments.

Your note

More from Chapter 9: Comparative Development Experiences of India and its Neighbours

Which of the following terms best describes the "Commune system" introduced in China during the Great Leap Forward?

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What was the primary factor responsible for the significant decline in China's population growth rate in the late 1970s?

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"State Owned Enterprises" (SOEs) in China are equivalent to which of the following in India?

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With reference to the "Great Leap Forward" (GLF) campaign initiated in China in 1958, consider the following statements: 1. It aimed at industrialising the country on a massive scale by encouraging people to set up industries in their backyards. 2. Under this campaign, the Commune system was dismantled to encourage individual farming. 3. The campaign was supported by professionals sent from Russia who stayed until the end of the Cultural Revolution. Which of the statements given above is/are correct?

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Consider the following statements regarding the "Great Proletarian Cultural Revolution" (1966-76) in China: 1. It was introduced by Mao Zedong. 2. It aimed to attract foreign professionals to work in Chinese cities. 3. Students and professionals were sent to work and learn from the countryside. Which of the statements given above is/are correct?

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The correct option is Remittances from Pakistani workers in the Middle-east..

Explanation

Option Analysis

Export of high-technology software services. is incorrect: While the export of software services is a growing sector in Pakistan, it has not historically been a primary source of foreign exchange compared to traditional exports (like textiles) or remittances. This characteristic is more distinctively associated with the Indian economy.
Remittances from Pakistani workers in the Middle-east. is correct: Remittances have historically been the most resilient and significant source of foreign exchange for Pakistan. A vast majority of the Pakistani diaspora resides in the Middle East, particularly in Saudi Arabia and the United Arab Emirates. The inflows from these workers play a crucial role in bridging the trade gap and supporting the country's foreign exchange reserves.
Foreign Direct Investment in the manufacturing sector. is incorrect: Foreign Direct Investment (FDI) in Pakistan has remained relatively low and volatile due to macroeconomic instability and structural challenges. It has not consistently provided the volume of foreign exchange that remittances have.
Tourism revenue from historical sites. is incorrect: Although Pakistan possesses significant historical and religious tourism sites, the tourism sector has not historically generated substantial foreign exchange earnings comparable to remittances, largely due to infrastructural and security challenges.