Import substitution development strategy

(redirected from Industrialization through Import Substitution)

Import substitution development strategy

A development strategy followed by many Latin American countries and other LDCs that emphasize import substitution-accomplished through protectionism-as the route to economic growth.

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.
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ADVISOR to Prime Minister on Commerce Abdul Razak Daud has outlined his vision for economic development and trade saying that the country can prosper with industrialization through import substitution and surge in export through diversification.
FAISALABAD -- Advisor to Prime Minister on Commerce, Textile, Industry and Production and Investment Abdul Razak Dawood on Monday said industrialization through import substitution coupled with export growth through diversification was imperative to put the country on road to progress and prosperity.
The lesson he draws for the present is that industrialization through import substitution requires international trade.