POLICY OF IMPORT SUBSTITUTION AS A FACTOR OF ECONOMIC SECURITY OF UKRAINE

  • Ventskovskyy Dmytro
Keywords: economic security of a state, import substitution, dependence on imports, domestic market, national interests

Abstract

The article is devoted to the current state of the domestic commodity market of Ukraine in the context of economic security of the state. The positive effect on the Ukrainian economy from the development of the domestic commodity market depends on achieving a balance of interests (competitive positions) between national producers and importers. The national economy has an inadequate level of foreign trade quota, and imports of goods changed from an element that complemented the economy to the one that substituted the domestic production.

A key threat is the combination of a high level of import dependence of the domestic commodity market and an outsized high level of export orientation of national producers. The goal of state policy is to increase the role of national producers in the domestic commodity market by their re-orientation to domestic demand, effectively counteracting import expansion and decreasing of import dependence through import substitution.

Modern policy of developed countries includes measures that are “civilized” and pragmatic for import substitutions, such as: public procurement (preference for domestic producers, often on cost criterion, as well as providing preferences in percentage to the cost to national producers or a fine, as a percentage of the cost – for import etc.); the establishment of requirements for the minimum share of the use of national resources and technologies in the production of goods; realization of state policy “buy national”; the establishment of investment barriers (restrictions on the participation of foreign capital in economic activities defined as strategic, limiting the access of foreign capital to state research and development programs, restrictions on repatriation of profits, capital, fees and royalties).

Import substitution is defined as a state policy on the internal commodity market, which combines a set of measures aimed at developing and strengthening the market positions of goods of national producers.

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Published
2018-06-13
How to Cite
Dmytro, V. (2018). POLICY OF IMPORT SUBSTITUTION AS A FACTOR OF ECONOMIC SECURITY OF UKRAINE. Strategic Priorities, 47(2), 78-88. Retrieved from https://niss-priority.com/index.php/journal/article/view/9