Impacts of country of origin theory in context of government policy of cutting current account defecit in Pakistan

Author: Ayaz Ahmed
Publication Year : 2019

Introduction: The country of origin theory (COO) which is also interprets as the country of manufacturing theory. It is a component of modern marketing which represents or explains the mother country of a certain product. This term COO plays an important role in developing consumer perception towards a certain product. As it is cleared that we are a developing nation so it’s obvious that the attachment between foreign products and Pakistani consumers is high as compared to domestic products. 

Current scenario: Before the high jump of dollar in comparison with rupee, the focus of consumers were very high towards the foreign products which causes a lot of disturbances in balance of payments (High imports and low exports). This deficit results in a fast reduction of foreign reserves and ring a bell of danger for Pakistan. In order to reduce the current account deficit the government build such a policy that will shift the focus of the consumers to purchase domestic products rather than foreign products. This will help the government to overcome the fast reduction in foreign reserves and also to improve and provide more opportunity for the domestic producers and exporters. 

Conclusion: Government is doing all this to enhance the productivity of domestic producers. The other big reason is to remove the huge deficit in balance of payments.