Approaches to industrialisation

Question 1

2 major approaches to industrialisation

Answer 1

• Import Substitution Industrialisation (ISI)
• Export Promotion Industrialisation (EPI)

Question 2

Import Substitution Industrialisation (ISI)

Answer 2

• Substitute externally produced goods/services for locally produced ones.
• Promotes economic independence
• Often temporary

Question 3

Export Promotion Industrialisation (EPI)

Answer 3

• Reduced trade barriers
• Economy oriented to one or a few industries
• Comparative advantage

Question 4

Drawbacks of ISI

Answer 4

• Supports inefficient industries at expense of efficient ones
• Quality problems
• Limited access to World’s goods, services, employment
• Political isolation, little to no foreign investment.

Question 5

EPI drawbacks

Answer 5

• Lack of product diversity
• Reliance on sale of raw material and cheap labour

Question 6

Three pillars of an economy

Answer 6

• Consumption
• Trade
• Investment