Image Source : https://w3cargo.com
Both exports and imports play an important role in the economic activities of a country. Exports will generate foreign exchange which is used to finance imports of raw materials and capital goods needed for production which are added values. The sum of the added value created by all units of economic production is the value of gross domestic product. Experts say that exports and investment are "engines of growth". Therefore, high and sustainable economic growth rates are often supported by increased exports and investment. Exports and Imports are divided into two, namely oil and gas and non-oil and gas (non-petroleum).
Export is the activity of issuing goods according to the customs area. Meanwhile, individual export actors, institutions, or business entities are called exporters.
Meanwhile, import is the activity of entering goods into a Customs area. Meanwhile, individual importers, institutions, or business entities are called importers.
The following is the effect of exports on the economy of a country:
1. Export transactions of goods and services bring in foreign exchange for the country
The greater the number of goods exported, the greater the export of foreign exchange and services obtained. For example, we send workers abroad. They can increase the country's foreign exchange because they are paid in the currency of the country where they work.
2. Increase the industrial growth of a country
International trade offers a large market share. As sales increase, industrial production capacity increases to meet this demand. Exporting companies not only grow as their business size grows, but also companies related to the production chain also grow.
3. Exports can introduce local products
International trade is not only a matter of economic luck, but also the process of strengthening the identity of a country through the goods traded. When you export goods, you are not only exporting physical goods, but also introducing local cultural characteristics, allowing many local goods to be introduced to different countries.
The following is the effect of imports on the country's economy:
1. Meeting domestic needs
Each country has factors such as geographical conditions, climate, and the level of dominance of science and technology that affect the disparity of production output. Thus, there are still products that the country is unable to produce itself, but are permanently needed by the people. Imports help meet those needs. So, even though the state cannot produce it itself, the state is able to import it from abroad for the needs of its people. For example, Indonesia imports rice to meet national needs. Rice imports are carried out to meet food needs when rice production in the country cannot meet national demand.
2. Imports can meet the needs of raw materials
The fulfillment of these national needs includes the provision of raw materials. Imports are useful for meeting industrial raw materials and manufacturing raw materials that cannot be produced domestically. Thus, imports allow domestic companies to remain productive in running their business without depleting raw materials.
3. Import activities can reduce the country's foreign exchange
The amount of foreign exchange that must be issued to cover the import of an item will certainly disrupt or affect the government's fund reserves which should be used as capital in driving economic growth. An excess of imports can disrupt a country's foreign exchange reserves and in the end can also affect the rate of economic growth.
Use the services of Indotransjaya Nusantara to assist you in importing and exporting.