Assessment of the level of penetration of import dependence in the context of the import substitution policy in Ukraine Cover Image

Assessment of the level of penetration of import dependence in the context of the import substitution policy in Ukraine
Assessment of the level of penetration of import dependence in the context of the import substitution policy in Ukraine

Author(s): Taras Vasyltsiv, Ruslan Lupak, Yuliia Osadchuk
Subject(s): Economy, National Economy
Published by: Institute of Society Transformation
Keywords: Import Dependence; Import Substitution; Public Policy; Domestic Market; Domestic Production; Competitiveness;

Summary/Abstract: Introduction. A situation when factors that stimulate an increase in the volume of imports have a growing impact and barrier and compensatory countermeasures are not formed is typical of the current stage of development of the Ukrainian economy. When solving this problem in the context of the import substitution policy in Ukraine, it is necessary to assess the level of import penetration into the domestic market and to find out the dependence of the national economy on its scale. The purpose is to conduct an assessment of the level of import dependence when planning the import substitution policy in Ukraine and to consider the world experience which should be taken into account when implementing it. Methods. As a methodological basis of the study, the authors use the provisions of statistical, structural system and comparative analyses, as well as theories of economic growth, along witgh modern concepts of institutional economy and transitional economic systems. Results. The results of the assessment of the level of penetration of import dependence into the Ukrainian economy are presented in the article, according to which conclusions are drawn about the country’s high dependence on the flows of imported goods (services) and the inability of domestic enterprises to produce products which may have a high consumer demand in the domestic market and can compete and replace similar imported products. The authors of the article emphasise the experience of individual, which should be taken into account when planning Ukraine’s public policy of import substitution, and suggests a number of appropriate measures which can be successfully implemented with regard to the real state of the national economy. Conclusions. The article reveals a high level of penetration of import dependence in the Ukrainian economy and the relevant negative trends. Given the volume of imported goods (services) flows and the real capacity of the domestic market, the authors determined that the level of import dependence of the national economy is critical. It fluctuated between 54.1% and 65.7% during the period of 2005-2016, and the tendency remains in 2017. Such a situation is also evidenced by the faster growth of imports of goods and services over the country’s GDP and the high share of imported goods (services) in GDP (from 48.1% to 60.6%). It has been proposed to focus on the formation and strengthening of structural changes in the Ukrainian economy by creating a suitable institutional environment for this purpose.

  • Issue Year: 167/2017
  • Issue No: 9-10
  • Page Range: 13-17
  • Page Count: 5
  • Language: English