Modernization of Industry through Import Substitution and Localization of Production in Mechanical Engineering
Journal: Quarterly Scientific Journal "Economic Herald of the Donbas" (Vol.63, No. 1)Publication Date: 2021-03-16
Authors : Buleev I. Bryukhovetska N. Chorna O.;
Page : 37-51
Keywords : modernization of industry; machinebuilding enterprises; import substitution; localization of production; Local Content Requirements; public procurement.;
Abstract
It is substantiated that the revival of self-sufficiency of the economy and industry requires the outpacing growth of national engineering, improvement of mechanisms to stimulate development, one of which is the government's policy on import substitution, including measures to localize production. The world experience of introduction of localization measures is considered. The difficulties of implementing measures to localize production in Ukraine have been studied. The expediency of introduction of measures of the government concerning localization of manufacture of production of branch of mechanical engineering in the course of public purchases is proved. It is determined that the protectionist policy on the development of the industrial sector, in particular the localization of production, is currently practiced by almost all countries of the world, primarily developed ones. The localization of production is considered in the scientific community from two opposite positions: 1) as a protectionist measure that does not promote economic growth and hinders the free movement of goods and capital; 2) as a government measure to support the development of national producers. The draft amendments to the regulatory framework in import substitution policy are analyzed: 1) Draft resolution of the Cabinet of Ministers "Some issues of implementation of the pilot project on procurement of machinery in the field of mechanical engineering with a confirmed degree of localization" until December 31, 2021; 2) Draft amendments to the Law of Ukraine "On Public Procurement" to create the conditions for sustainable development and modernization of domestic industry. Given that Ukraine has signed a number of international free trade agreements, it has been proved that it is necessary to define and substantiate in more detail its own interests, protection of national and economic security, legality of amendments to the law and the possibility of their implementation in Ukrainian legislation. The hypothesis of fixing a special regime for Ukraine for a certain period of time and establishing norms of localization of production for public procurement is substantiated.
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