Difference between revisions of "Middle-income countries"

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''See also:'' [[Middle-income trap]] and [[Innovation]] and [[Productivity]]
 
''See also:'' [[Middle-income trap]] and [[Innovation]] and [[Productivity]]
  
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The middle-income trap refers to an economic situation where a middle-income country is failing to transform itself to a high-income economy due to its rising costs and declining competitiveness (Historically few countries successfully manage the transition from low to middle to high income).<ref>[https://elibrary.worldbank.org/doi/10.1596/9780821387856_CH04#:~:text=The%20middle%2Dincome%20trap%20refers,to%20middle%20to%20high%20income. Middle-Income Trap]</ref><ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-1 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1)], Asia Development Bank, 2012</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-2 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 2)], Asia Development Bank, 2012</ref>
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The [[middle-income trap]] refers to an economic situation where a middle-income country is failing to transform itself to a high-income economy due to its rising costs and declining competitiveness (Historically few countries successfully manage the transition from low to middle to high income).<ref>[https://elibrary.worldbank.org/doi/10.1596/9780821387856_CH04#:~:text=The%20middle%2Dincome%20trap%20refers,to%20middle%20to%20high%20income. Middle-Income Trap]</ref><ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-1 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1)], Asia Development Bank, 2012</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-2 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 2)], Asia Development Bank, 2012</ref>
  
 
The Asia Society describes the middle-income trap thusly: "The “middle-income trap” is a theory of economic development in which wages in a country rise to the point that growth potential in export-driven low-skill manufacturing is exhausted before it attains the [[Innovation|innovative]] capability needed to boost [[productivity]] and compete with developed countries in higher value-chain industries. Thus, there are few avenues for further growth — and wages stagnate."<ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref>
 
The Asia Society describes the middle-income trap thusly: "The “middle-income trap” is a theory of economic development in which wages in a country rise to the point that growth potential in export-driven low-skill manufacturing is exhausted before it attains the [[Innovation|innovative]] capability needed to boost [[productivity]] and compete with developed countries in higher value-chain industries. Thus, there are few avenues for further growth — and wages stagnate."<ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref>

Revision as of 18:21, April 13, 2024

Many Latin American middle-income countries haven't become high-income countries and have half the labor productivity of countries that are technological leaders.[1][2]

See also: Middle-income trap

According to Investopedia, middle-income countries are defined as: "According to the World Bank, middle-income countries (MICs) are defined as economies with a gross national income (GNI) per capita between $1,136 and $13,845 as of 2024. MICs consist of lower-middle-income countries and upper-middle-income countries, both of which are part of the income categories that the World Bank uses to classify economies for operational and analytical purposes."[3]

Asian Development Bank: The middle-income countries transition to high-income counties around the globe: Characteristics of graduation and slowdown

The Asian Development Bank is a regional development bank established in 1966 with 31 offices in the world designed to promote social and economic development in Asia. The Bank is headquartered in Manilla, Philippines.

The abstract for the Asian Development Bank 2015 paper entitled The Middle-Income Transition around the Globe: Characteristics of Graduation and Slowdown indicates:

“ The paper investigates the situation of middle-income economies around the world. Since 1965, only 18 economies with a population of more than 3 million and not dependent on oil exports have made the transition to being high income. Many more have not been able to move beyond the middle-income stage. We conduct statistical tests of differences between two groups of economies across a range of growth and development variables. The results suggest that middle-income economies are particularly weak in the following areas: governance, infrastructure, savings and investment, inequality, and quality—but not quantity—of education. The findings are used to suggest whether the People’s Republic of China is successfully progressing through the middle-income stage or whether it may get caught in a middle-income trap.[4] ”

Innovation and countries going from middle-income countries to high-income countries

See also: Innovation

Below are articles on innovation and countries going from middle-income countries to high-income countries:

Middle-income trap

The middle-income country of China is endeavoring to become a high-income country.

See: Middle-income trap

See also: Middle-income trap and Innovation and Productivity

The middle-income trap refers to an economic situation where a middle-income country is failing to transform itself to a high-income economy due to its rising costs and declining competitiveness (Historically few countries successfully manage the transition from low to middle to high income).[5][6][7][8]

The Asia Society describes the middle-income trap thusly: "The “middle-income trap” is a theory of economic development in which wages in a country rise to the point that growth potential in export-driven low-skill manufacturing is exhausted before it attains the innovative capability needed to boost productivity and compete with developed countries in higher value-chain industries. Thus, there are few avenues for further growth — and wages stagnate."[9]

The 2023 Mint News article There is no easy escape from the middle-income trap indicates: "Graduating from middle income to developed world status is the greatest prize in development economics. Only a handful of East Asian and Central European countries have made the transition so far, along with a few fortunate resource-rich countries."[10]

Middle-income trap and various countries:

Former high-income countries that are now middle-income countries

Former high-income countries and the year(s) during which they held such classification is/are shown in parentheses.[11]

  • Netherlands Antilles (1994–2009)

References

  1. ↑ Is economic growth in middle-income countries different from low-income countries? by Barry Eichengreen, Donghyun Park, and Kwanho Shin, Brookings Institute, September 25, 2017
  2. ↑ Is Southeast Asia falling into a Latin American style “middle-income trap”?, Cambridge Working Papers in Economics, CWPE 2267. Published 9 November 2022. Website www.econ.cam.ac.uk/cwpe
  3. ↑ Middle-Income Countries (MICs): Characteristics and Significance, Investopedia
  4. ↑ The Middle-Income Transition around the Globe: Characteristics of Graduation and Slowdown by Paul Vandenberg, Lilibeth Poot, and Jeffrey Miyamoto. Asian Development Bank. ADBI Working Paper Series. No. 519. March 2015
  5. ↑ Middle-Income Trap
  6. ↑ China May Be Running Out of Time To Escape the Middle-Income Trap, Asia Society, 2017
  7. ↑ Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1), Asia Development Bank, 2012
  8. ↑ Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 2), Asia Development Bank, 2012
  9. ↑ China May Be Running Out of Time To Escape the Middle-Income Trap, Asia Society, 2017
  10. ↑ There is no easy escape from the middle-income trap, Mint News, 2023
  11. ↑ "comparison with the previous fiscal year". World Bank. Retrieved 2018-04-22.
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