import substitution

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import substitution

the process whereby countries begin to produce certain goods for themselves instead of importing them. Given the heavy reliance of many THIRD WORLD countries on importing manufactured goods, one strategy they have tried to adopt is that of import-substitution industrialization. This has been successful where the goods can be produced with simple machinery and low capital costs. However, many countries have run into problems when such manufacturing involves high capital costs, complex machinery which they do not produce themselves, or labour and technical skills which they do not possess. In such cases, instead of diversifying their economies, and becoming less reliant on manufactured exports, they have often witnessed a new set of problems with dependency on foreign capital and technical knowledge. Further, since the 1970s, the experience of starting up industries and the provision of the necessary infrastructure has led to the creation of INTERNATIONAL DEBT. see also DEPENDENCY THEORY.
References in periodicals archive ?
Turkey experienced high levels of growth in the 1960s and 1970s under a strategy of import substitution industrialization (ISI), which was based on heavy use of state-owned enterprise investments, a restrictive trade regime and strict regulation of financial activity.
With the passing of the import substitution industrialization economies of the 70's, the stock market boom of the 80's, and the dot com bubble of the 90's, we seem to have missed every possible chance of breathing life into our otherwise failing economy.
The appearance of revolutionary movements in El Salvador, Guatemala, Honduras, and Nicaragua signaled the demise of the "prevailing agro-export economic model," the bankruptcy of Import Substitution Industrialization policies, and the end of political rule by traditional elites (p.
To assess the former, he focuses on Latin America's switch in developmental models during the twentieth century: from economic liberalism to early stages of import substitution industrialization (ISI) in mid-century; from ISI to a more capital-intensive import substitution (ISI2) in the 1960s; and from ISI2 to neoliberalism in the 1980s.
economic intervention, and he explores the failed experiments in import substitution industrialization.
This import substitution industrialization (ISI) program was a serious effort to industrialize.