Final answer:
Pakistan's heavy reliance on cotton exports has advantages such as market demand and employment but also poses risks like market volatility and environmental strain. Other disadvantages include economic lack of diversification and the impact of trade policies from other countries on global prices.
Step-by-step explanation:
The advantages of Pakistan having cotton as a major export include a concentration of expertise and resources, steady demand from international markets such as textile mills, and the potential to develop related industries. Cotton, as a commodity, is easily stored and transported, with a well-established demand, particularly from industrial textile mills around the world. The sector also employs a significant part of the population and contributes substantially to Pakistan's GDP.
However, there are disadvantages to relying heavily on one major export product. These include vulnerability to market fluctuations, potential over-reliance which can hinder economic diversification, and environmental concerns, as monoculture farming can lead to soil depletion and require significant water resources. Additionally, being dependent on a single crop makes the country susceptible to trade disruptions. For example, the cotton economy suffered during the US Civil War, highlighting how geopolitical issues can influence market accessibility.
Trade policies and competition also matter. Subsidies in high-income countries for cotton farming, for instance, can dramatically affect world prices, making it difficult for farmers in low-income countries to compete. This creates a scenario where an increase in supply leads to reduced world prices, potentially putting cotton farmers in poor regions at risk of malnourishment.