import substitution


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Import Substitution Development Strategy

A development strategy whereby a government restricts or forbids the import of industrial material and subsidizes local material. For example, a country may not allow the import of refined oil and instead encourage development of local oil refineries. The idea behind this strategy is to make a less developed country less dependent on international assistance and foreign direct investment until such time as it is can absorb investment more easily and also trade its own products. This development strategy was followed in Latin America and some other regions for most of the mid and late 20th century. It has its theoretical foundations in Keynesian economics, though some analysts have claimed that each nation industrializing after the United Kingdom has followed some form of import substitution.

import substitution

a strategy aimed at reducing IMPORTS in order to encourage the production of domestic substitutes. Import substitution is pursued in particular by DEVELOPING COUNTRIES as a means of promoting domestic INDUSTRIALIZATION and conserving scarce FOREIGN CURRENCY resources. By limiting or removing competing IMPORTS through the use of QUOTAS, TARIFFS, etc., the country aims to establish its own manufacturing industries which, initially, can be expanded to cater for the domestic market, and at a later stage develop an EXPORT trade. See INFANT INDUSTRY, ECONOMIC DEVELOPMENT.
References in periodicals archive ?
Russian Deputy Prime Minister Arkady Dvorkovich said, Integrating the endeavours of two Russian companies that occupy leading positions in their sectors not only enables us to implement the kind of projects envisioned by the Russian Government s modernisation and import substitution initiatives, it also strengthens their respective market positions, and serves to underpin the Russian economy s continued development.
Maintaining economic stability, achieving a sustainable growth, reducing budget deficit and trade deficit by increasing exports and resorting to import substitution, are among the objectives for next year's budget.
He also mentioned that being indigenous, clean and economical resources renewable energy projects are considered most viable option for import substitution, reducing basket price of energy and to offset the environmental impacts of fossil fuels.
5% of which were self-produced, presenting a certain space for import substitution.
We hope that in the near future Kyrgyzstan will become an import substitution country; so far this is only a desire," he said
Oman Food Investment Holding is being established by the government to invest in food security projects, which focus on import substitution and rural development.
ae1/4A ae1/4A The OFIC is being established by the government to invest in food security projects, which focus on import substitution and rural development.
The review will also: | Consider how the processing |and retail sectors, as well as wider global trade influence Welsh and UK markets, and impact on sector profitability; explore what support under |the Rural Development Plan 2014 - 2020 might be relevant to dairy farmers and the milk processing sector in Wales; consider the current support |and guidance on product development and added value in the supply chain, to give dairy products access to a wider market place, particularly import substitution, and look at the capacity, product |mix and geographical distribution of the Welsh dairy processing industry.
Addressing on the occasion, Prof Dr Iqrar Ahmad Khan said the strengthened researchindustry relations will help the country enhance the indigenous capabilities for solutions of industrial problems, export enhancement and import substitution.
Cuban manufacturing is at a very depressed level and its development is key for import substitution and eliminating one of the bottlenecks hindering local productive chains, Barcelo said;
Absolutely everything," Putin said at a meeting devoted to import substitution.
Sustaining the surplus in the longer term will depend on whether the economy maintains its competitiveness and on its capacity to increase import substitution with domestic production," Monokroussos said.