Prospects for Import Substitution and Balancing Ukraine’s External Trade

Tatiana Melnik; Liudmyla Sierova

doi:10.1515/ngs-2022-0016

Article

Prospects for Import Substitution and Balancing Ukraine’s External Trade

Tatiana Melnik and Liudmyla Sierova

Published/Copyright: August 19, 2022

Published by

Become an author with De Gruyter Brill

Submit Manuscript Author Information

From the journal New Global Studies Volume 17 Issue 1

Abstract

The development of world economic relations leads to the intensification of mutual exchange of goods between countries. In the article, we have analyzed the dynamics and structure of Ukraine’s external trade, assessed the degree of import dependence of the domestic market, and determined preconditions and national potential of import substitution of goods, including high-tech ones. We have determined public policy areas of import substitution in Ukraine, which include formation of the list of import-substituting goods, stimulation, export diversification, and the industrial and innovative development of the economy. The purpose of the article is to study the imbalances in Ukraine’s external trade in the context of the implementation of import substitution policy. The article analyzes the statistical and economic indicators, with a view to achieving the final research aims, in the period from 2010 to 2022 in Ukraine, in the service of military actions from 2014, and a full-scale invasion in January 2022, as well as conditions in the pandemic years (2019–21). Other countries are also considered concomitantly. We have drawn conclusions on the tendencies to increase the share of imports in the domestic market and proposed recommendations for the development of effective functioning of the internal market.

Keywords: foreign trade; import; domestic market; structure of import use; import substitution; import dependence; export of high-tech goods

Corresponding authors: Tatiana Melnik, Department of International Management, Kyiv National University of Trade and Economics, 02156, 19 Kyoto Str., Kyiv, Ukraine, E-mail: melnik8278@edu-knu.com

Appendix A

References

Adewale, A. R. 2017. “Іmport Substitution Industrialisation and Economic Growth – Evidence from the Group of BRICS Countries.” Future Business Journal 3: 138–58. https://doi.org/10.1016/j.fbj.2017.06.001.Search in Google Scholar

Amin, S. 1971. Accumulation on a Global Scale: Criticism of the Theory of Underdevelopment, https://www.persee.fr/doc/raipr_0033-9075_1971_num_19_1_1508_t1_0120_0000_4.Search in Google Scholar

Analytical report of the National Social Democratic Party to the Annual Message of the President of Ukraine to the Verkhovna Rada of Ukraine on Internal and External Status of Ukraine in 2020, https://www.president.gov.ua/news/poslannya-prezidenta-ukrayini-volodimira-zelenskogo-do-verho-64717.Search in Google Scholar

Åslund, A., and M. Dabrowski. 2015. Challenges of Globalization: Imbalances and Growth, https://www.researchgate.net/publication/227441550.Search in Google Scholar

Baran, P. 1957. The Political Economy of Growth. New York: Monthly Review.Search in Google Scholar

Burakovsky, I. 2000. Theory of International Trade. Kyiv: Osnovy.Search in Google Scholar

Dunaev, I. V. 2012. “Import Substitution in the Context of the Choice of Mechanisms of State Foreign Trade Policy of Ukraine.” State Building 1: 56–64.Search in Google Scholar

Epshtein, D. 2017. “Business Source Premier.” Problems of Economic Transition 59: 186–201, https://doi.org/10.1080/10611991.2017.1319196.Search in Google Scholar

Genereux, F. 2017. Protectionism: A Brake on Economic Growth: Economic Studies, https://www.desjardins.com/ressources/pdf/pv170217-e.pdf.Search in Google Scholar

Gorska, O. 2002. “The Structure of the Economy of Ukraine as a Factor of Economic Security.” Regionalna Ekonomika 3: 61–8.Search in Google Scholar

Government of Ukraine. 2020. Gross Domestic Product by Production Method and Gross Value Added by Type of Economic Activity. Also available at http://www.ukrstat.gov.ua/operativ/operativ2008/vvp/vvp_ric/arh_vtr_u.htm.Search in Google Scholar

Government of Ukraine. 2021a. Export, Import of the Foreign Trade Balance of Ukraine, https://www.me.gov.ua/Charts/Detail?lang=uk-UAandid=e8cb4705-5ddf-436c-9cc0-56ec4ce2a2de.Search in Google Scholar

Government of Ukraine. 2021b. Foreign Trade in Goods, https://bank.gov.ua/ua/statistic/sector-external/data-sector-external#3.Search in Google Scholar

Government of Ukraine. 2021c. Gross Domestic Product by Categories of End Use, http://www.ukrstat.gov.ua/operativ/operativ2005/vvp/vvp_ric/arh_vvpzkkv_u.htm.Search in Google Scholar

Hoffmann, L. 1970. Import Substitution and Economic Growth in Developing Countries, https://www.persee.fr/doc/reco_0035-2764_1972_num_23_1_408014_t1_0129_0000_001.Search in Google Scholar

Inshyn, M., T. Vakhonieva, A. Korotkikh, A. Denysenko, and K. Dzhura. 2021. “Transformation of Labor Legislation in the Digital Economy.” InterEULawEast 8 (1): 39–56, doi:https://doi.org/10.22598/iele.2021.8.1.3.Search in Google Scholar

Irwin, D. A. 2020a. Import Substitution is Making an Unwelcome Comeback, https://www.piie.com/blogs/trade-and-investment-policy-watch/import-substitution-making-unwelcome-comeback.Search in Google Scholar

Irwin, D. A. 2020b. The Rise and Fall of Import Substitution, https://www.piie.com/publications/working-papers/rise-and-fall-import-substitution.10.3386/w27919Search in Google Scholar

Krugman, P. 2018. Thinking about a Trade War. New York, https://www.nytimes.com/2018/06/17/opinion/thinking-about-a-trade-war-very-wonkish.html.Search in Google Scholar

Lachmann, W. 2004. Development Policy, Vol. 1. Munich: BasicsOldenbourg Wissenschaftsverlag GmbH.Search in Google Scholar

Lang, N. 1992. “Beyond Import Substitution and Export Promotion: A New Typology of Trade Strategies.” Journal of Development Studies 28: 447–72, https://doi.org/10.1080/00220389208422241.Search in Google Scholar

Long, G. 2010. China’s Sustainable Trade Strategy: An Overview. International Institute for Sustainable Development, https://www.iisd.org/system/files/publications/china_sustainable_trade_strategy.pdf.Search in Google Scholar

Lupak, R. L. 2018. State Policy of Import Substitution in the System of Economic Security of Ukraine: Priorities and Implementation Tools, 527. Lviv: NNVK “ATB” Publishing House, http://www.lute.lviv.ua/fileadmin/www.lac.lviv.ua/data/kafedry/Ekonomiky/Docs/2018_Monografiya_Lupak_R._L.pdf.Search in Google Scholar

Mazaraki, A. 2010. Ukraine’s Economic Security in the Face of Globalization Challenges. Kyiv: NISS.Search in Google Scholar

Mazaraki, A. A., T. M. Melnik, and V. V. Yukhimenko. 2014. Strategy of Post-crisis Development of the Foreign Economic Sector of Ukraine. Kyiv: KNTEU.Search in Google Scholar

Melnyk, T. M., and K. S. Pugachevskaya. 2016. “Import Dependence of Ukraine’s Economy and Priorities of Selective Import Substitution.” Economy of Ukraine 4: 29–44.Search in Google Scholar

National Bank of Ukraine 2009. Statistics of the External Sector of Ukraine According to the Methodology of the 6th Edition of ‘Guidelines on Balance of Payments and International Investment Position, https://bank.gov.ua/ua/statistic/sector-external/data-sector-external#1.Search in Google Scholar

National Bank of Ukraine 2021. “Inflation Report”, https://bank.gov.ua/monetary/report.Search in Google Scholar

Noland, M., and S. Robinson. 2016. “Impact of Clinton’s and Trump’s Trade Proposals.” In Assessing Trade Agendas in the US Presidential Campaign, 17–39. Peterson Institute for International Economics, https://www.rexsresources.com/uploads/6/5/2/1/6521405/piieb16-6.pdf.Search in Google Scholar

Novikovas, A., L. Novikoviene, R. Shapoval, and K. Solntseva. 2017. “The Peculiarities of Motivation and Organization of Civil Defence Service in Lithuania and Ukraine.” Journal of Security and Sustainability Issues 7 (2): 369–80, https://doi.org/10.9770/jssi.2017.7.2(16).Search in Google Scholar

OECD 2010. Measuring Globalisation: OECD Economic Globalisation Indicators, https://estadisticas.pr/files/BibliotecaVirtual/OECD_EGI_2010_en.pdf.Search in Google Scholar

Ostapenko, T. 2009. “The Impact of Export-oriented and Import-Substituting Industries on the Growth of Ukraine’s Economy.” Economics, Finance, Law 10: 11–6.Search in Google Scholar

Polyakova, Y. 2012. “Comparative Analysis of Innovation Activity of Post-Soviet Countries.” Strategy and Mechanisms of Regulation of Industrial Development 1: 355–64.Search in Google Scholar

Posen, A. S. 2018. The Post-American World Economy. In Globalization in the Trump Era, https://www.foreignaffairs.com/articles/united-states/2018-02-13/post-american-world-economy.Search in Google Scholar

Ruslan, K., M. Inshyn, S. Dmytro, T. Yelena, and Olena, A. 2020. “Occupational Safety and Health of Factory Workers in European Countries in the Nineteenth Century: Historical and Legal Analysis.” Labor History 61 (3–4): 388–400, https://doi.org/10.1080/0023656X.2020.1775796.Search in Google Scholar

Santos, T. 1969. “The Crisis of Development Theory and the Problem of Dependence in Latin America.” Siglo 21: 42–43.Search in Google Scholar

Shafaeddin, M., and J. Pizarro. 2007. Comparative Experience of China and Mexico, https://www.researchgate.net/publication/24115101_From_Export_Promotion_To_Import_Substitution_Comparative_Experience_of_China_and_Mexico.From Export Promotion to Import Substitution.Search in Google Scholar

Skripnichenko, M. I. 2015. Models for Identifying Macroeconomic Imbalances in Ukraine. Kyiv: IEP of the National Academy of Sciences of Ukraine.Search in Google Scholar

State Statistics Service of Ukraine. 2021, http://www.ukrstat.gov.ua/.Search in Google Scholar

Tochilina, V. O. 2009. Markets of the Real Sector of the Economy of Ukraine: Structural and Institutional Analysis. Kyiv: IEP NAS of Ukraine.Search in Google Scholar

Tsap, M. V. 2018. “Essential Characteristics of the Import Substitution Process and its Role in Socio-Economic Development.” Scientific Bulletin of Uzhhorod National University 18 (3): 118–22.Search in Google Scholar

Yakubovsky, M. M. 2012. “The Domestic Market as a Mirror of the Problems of Ukrainian Industry.” Economy of Ukraine 8: 4–15.Search in Google Scholar

Yaroshenko, O. M., N. M. Vapnyarchuk, S. V. Lozovoi, G. O. Yakovleva, and O. A. Yakovlyev. 2018a. “General-compulsory Medical Insurance: World Experience.” Journal of Advanced Research in Law and Economics 9 (5): 1829–38, https://doi.org/10.14505//jarle.v9.5(35).38.Search in Google Scholar

Yaroshenko, O. M., O. V. Moskalenko, A. M. Sliusar, and N. M. Vapnyarchuk. 2018b. “Commercial Secret as an Object of Labour Relations: Foreign and International Experience.” Journal of Legal, Ethical and Regulatory Issues 21 (1).Search in Google Scholar

Zhalilo, Y. A. 2006. “Problems of Formation of Modern Principles of Import Substitution Policy in Ukraine.” Strategic Panorama 1: 102–11.Search in Google Scholar

Received: 2022-03-11

Accepted: 2022-08-01

Published Online: 2022-08-19

You are currently not able to access this content.

Articles in the same Issue

https://doi.org/10.1515/ngs-2022-0016

Keywords for this article

foreign trade; import; domestic market; structure of import use; import substitution; import dependence; export of high-tech goods