Import+Substitution+Industrialization

=** __IMPORT SUBSTITUTION__ __INDUSTRIALIZATION__**= =**// __I.S.I__//**=

__DEFINITIONS__

**//Tariffs//**- duties: a government tax on imports or exports **//Industrialization-//** organizing the development of industry on a great scale in a previously pre-industrial society **//Imports-//** commodities purchased from a foreign country and brought into another country **//Exports//**- commodities transported from a country to another foreign country in exchange for goods or currency. **//Raw Materials-//** Materials which in their natural state are of little use but, when transformed into something else, are a source of wealth or prosperity

Basically what import substitution industrialization is trying to achieve is to break dependence on importing manufactured goods by importing 'primary' products, like minerals, fabrics, and agricultural goods. This is helpful because it cuts out the middle man. Rather than //exporting// primary or '//raw//' materials that a country has a great deal of for very cheap, which other //industrialized// countries will //import// and manufacture into highly valuable products, which then are often imported back into the original country at a highly inflated price, those countries which are less industrialized will import all the raw materials //they//need, and actually be encouraged to manufacture finished products which in the long run, improve their economic condition, and provide new frontiers for work and new skills to learn with which they can make progress. They end up getting a lot more out of their materials, monetarily, and industrializing and creating factories and production lines ends up introducing a lot of new jobs for the local people.

A lot of the more poor countries close themselves off from importing goods because it costs money and they think they will not benefit, however these are the countries that benefit the least from globalization. By lowering trade tariffs, and opening up the country to importing goods as well, they can use raw materials that they have as well as importing more raw materials, and produce finalized products which are in higher demand and can be sold or traded for much more value than the raw materials alone. They are leaving this enormous frontier for increasing profit to the industrialized countries that know it is a wise decision to import as well as export.

The great depression occurred partially because people were convinced that importing goods was counter-productive. This is a misconception. Imports make exporting more efficient. For example, sole exporters concentrate their efforts in areas where they already have an advantage, like an exponential amount of cotton for example. Importing more goods gives countries the capacity to focus their efforts in areas where they do not necessarily have an advantage, like production.

SOURCES FOR FURTHER RESEARCH-

Find in depth information on the history, future, and present state of Import Substitution Industrialization, visit [] (Session 7 ISI)

Research more intricate versions of the definitions at

www.saburchill.com/history/hist003.html