Explain the role of industrial development and import-substitution policies in PKP's modernization.

• A. Relied only on exporting raw resources.
• B. Promoted free trade without protective measures.
• C. Aimed to reduce foreign dependence, foster domestic industries, and create jobs, but could lead to protectionism and inflation.
• D. Had no impact on jobs.

Answer: (C)

Industrial development and import-substitution policies focus on building domestic manufacturing to cut reliance on foreign goods, usually with government-led investment, tariffs, and other protections to shield new industries. In PKP’s modernization, this approach aimed to develop a domestic industrial base, create jobs, and reduce foreign dependence by nurturing key sectors rather than relying on exporting raw resources or importing finished products. The result can be stronger employment, broader industrial capacity, and greater economic self-sufficiency as industries grow under state guidance. At the same time, protectionist measures and heavy government intervention can push up prices and slow competition, risking inflation and inefficiencies if the policy environment isn’t carefully managed. So, the best summary is that it sought to reduce foreign dependence, foster domestic industries, and create jobs, while leaving room for protective policies that could drive inflation.