Problem
Unproductive import substitution
Other Names:
Import substitution as a barrier to subsequent economic growthDevelopment of products substituting for exports from other countries
Nature:
At the early stage of industrialization, import substitution takes the form of reducing imports of non-durable consumer goods, as well as their inputs, so as to permit indigenous manufacturing to develop and to save foreign currency needed for the imports of producer goods. At the later stage, import substitution involves replacement of producer goods and intermediate inputs, as well as consumer durables, so as to increase the reliance for economic growth on the supply of domestically produced goods. Excessive and prolonged protection of import substitution industries has often adverse consequences on efficiency and competitiveness and impedes export promotion.
Broader Problems:
Domestic market restrictions Aggravates:
Inadequate production capacityDistortion in international tradeAcquisition of inappropriate equipmentVulnerability of national economies to vagaries of external markets for goods and services Reduces:
Dependence on imported technology Strategies:
Substituting capital for resources Subject(s):
Commerce → Import, exportDevelopment → Development
Economics → Economic
Economics → Productivity
Industry → Products
Societal Problems → Impediments
Related UN Sustainable Development Goals:
Problem Type:
E: Emanations of other problems Date of last update
04.10.2020 – 22:48 CEST