I have been hooked about discussing every nook and cranny relating to business and economy for a while now.
In the USA, the political climate is beginning to show its dominance. Every person who has the right to vote is keen to update their knowledge of how politics moves. So, they try to understand what is best for their nation. This importance has been a tradition for a long time ago, but the cracks between people of the same country keep showing every time the election comes around.
People are arguing about everything related to their candidate. Important and crucial things like climate change or small and meaningless stuff like the way they dress are no exception to debate. But people often aren't focused on how their candidates can run the nation. And one of the most critical subjects about ruling a country is handling the economy, especially Import and Export.
“Idolatry is really not good for anyone. Not even the idols.”
— John Bach
Still, economics is a complex subject. This field of study requires years of training to master one aspect of it. So, the president must judge a person wisely to give him/her the correct position. The president must also understand that economics is the study of scarcity and choice of people. Hence, one misstep in the policy-making could be a disaster for the whole nation.
Import and Export Are Not Just Placing Orders
Import is a term that defines goods and or services entering a nation. Export has the opposite meaning. Therefore, Export means delivering goods and or services to other governments. Based on their definition, these subjects seem to be an easy task to understand. But people should know that understanding isn't the same as comprehending.
The majority of people believe that a nation should export as much as it can. This concept is a rational thought, between regular people; this idea will never be the choice of an expert. Experts believed that Import and Export have their respective redeeming values. Even though Export may be the best choice for many nations, some nations thrive by Importing.
Export results in the increasing values of national currency. The people may feel the benefits of cheaper international products, but keeping banknotes to have the highest rates possible is detrimental in the long run. If a country's money dominates the exchange rates, states won't Import from that country because of the high cost. Hence, these states will look for a cheaper alternative elsewhere.
Importing More Is Also a Viable Option
The annual difference between a nation's Export and Import is called net exports. Experts use the term surplus for a positive net export and give deficits as the name of a negative one. Continuous exporting to have positive net Export rather than debt is a rational concept, but things aren't as simple as people thought. Some countries have a strategy to solve a large amount of deficit, and they intend not to have a surplus in the first place.
Now, governments use two accounts to simplify their spending: Current Account and Financial Account. Things like currencies, financial aids, and donations go to the current report, but experts placed stocks and assets into the financial account. These two things seem to have no link in the Importance of Import and Export in individuals' eyes, but these accounts are a device to pay their debt back.
Countries that have a massive amount of deficit can use the financial account to pay it. With the financial report, states can trade goods with stocks or assets. It may seem to be a danger to sell a part of the nation, but the country usually has a way to buy the traded stocks again in the future.
Economic Is a Perfect Circular Cycle
Economists said that every trade is beneficial. So, every Import and Export will be more valuable than producing everything alone. People will found that the idea of capitalizing Importing is counterintuitive, but many nations had done it. And these nations achieved a tremendous amount of success.
“Economy has frequently nothing whatever to do with the amount of money being spent, but with the wisdom used in spending it.”
— Henry Ford
Import and Export change the allocation of resources. For example, if China Imported TV from India, the number of people working on TV in China will decrease. But these people that don't work in the TV industry anymore can produce the commodity that India Imported from China. Therefore, every international trade is a reshuffle of jobs.
Reshuffling jobs may result in lower pay for some people. But by paying someone lower, the money in the nation's current account will increase. After some time, the accumulated money can be used to export more goods to the same country. Then, the reshuffle is being done again. And the wheel of the economy continues to roll.
It Is Not Easy
Importing and exporting is a term many people failed to comprehend. People accused certain parties to indulge in Export or Imports without knowing the actual reason behind them. Assuredly, people should listen to the experts if they don't know about something. Even experts are sometimes wrong in their respective fields. What hope does an average person have?
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