EP25 Middle-Income Trap: Causes & Ways to Escape
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"First on air 21 August 2021"

The situation of being trapped in the middle income is when a country’s wage rates have become too high for it to compete against low-wage, low-income nations, and yet that country lacks sufficient innovation and highly skilled personnel to compete effectively against the highest tiers of knowledge-intensive products from developed or rich countries. And so, such countries commonly suffer from low investment, slow growth, limited industrial diversification and poor labor market conditions. The World Bank introduced the term middle-income trap in 2006, and designated Thailand as an upper middle-income country in July 2011, moving the country up from its previous status of lower middle-income. Out of 101 middle-income countries in 1960, only 13 became high-income, or developed countries by 2008. Why were only a handful of countries in the world able to escape this middle-income trap? Discussing this issue and the ways to escape this trap are Dr. Birgit Hansl, country manager for Thailand, World Bank, and Assoc. Prof. Dr. Piti Srisangnam of Faculty of Economics, Chulalongkorn University.