POLI 227 Lecture : POLI 227 ISI (Import Substitution Industralization and EOI (Export Oriented Industrialization).docx
11 Mar 2014
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Document Summary
Isi emerged in latin america in the 1930s, because of the worldwide depression back then latin america was cut-off from its consumer goods imports from north america and europe (which were both heavily effected by the worldwide depression). Although isi originally began as a response to economic crisis, due to its success in latin. America between 1940 and 1970, planners decided to make of it a general strategy for industrial development. Therefor isi was also implemented in east asia and parts of. Governments would put tariffs (import taxes) and quotas (physical tax) on foreign consumer goods in order to protect emerging national industries from the international competition. Moreover, governments wanted to facilitate the imports of capital (manufacturing equipment) and raw material that were both needed by domestic industrialists. To reduce the price of such imports the government overvalued it local currency, and establish multiple currencies for imports, exports, and other financial activities.
