A) what are the main attractions of an import substitution strategy Essay

A) what are the main attractions of an import substitution dodge B)how do you explain that several(prenominal) developing countries have not suceeded to deepen the proc - Essay ExampleProponents favour the export of industrial goods over primary products.The strategy may be espouse as a matter of economical policy and to attain industrialisation. In such context, Wikipedia (2006) said Import substitution industrialization (also called ISI) is a trade and economic policy based on the premise that a developing country should attempt to substitute products which it imports, mostly finished goods, with locally produced substitutes. The theory is similar to that of mercantilism in that it promotes high exports and minimal imports to increase national wealth. It further said, the policy has three major tenets (1) an active industrial policy to subsidize and orchestrate take of strategic substitutes, (2) protective barriers to trade (namely, tariffs), and (3) a monetary policy that keep s the domestic currency overvalued. Hence import substitution policies are not favoured by advocates of overbearing free trade.The failure of several developing countries of not having succeeded to deepen the process of import substitution into its second and third phase could be attributed to the defect of the strategy as determined by results. The experiences of several developing countries are thus cited below to explain the failure. We will start with the Latin American countries, followed by due east Asia and then we will discuss the cases of Malaysia and the Philippines.Wikipedia (2006) said Import substitution policies were adopted by most nations in Latin America in the 1930s and forties because of the Great Depression of the 1930s. In the 1950s the Argentine economist and UNECLA head Ral Prebisch was a visible proponent of the idea. Prebisch believed that developing countries needed to earn forward linkages domestically, and could only succeed by creating the industries that used the primary products