2) Taking as an example one of the middle income Southeast Asian countries that seem to...

2) Taking as an example one of the middle income Southeast Asian countries that seem to be caught in this trap, and drawing on the literature on the Middle Income Trap, discuss the following: a. What is the evidence that the country is caught in the middle-income trap? b. Why is the country caught in the trap c. Giving reasons, discuss what you believe are the important steps that the country should take to get out of the trap?

Solutions

Expert Solution

2) Taking as an example one of the middle income Southeast Asian countries that seem to be caught in this trap, and drawing on the literature on the Middle Income Trap, discuss the following:

a. What isthe evidencethatthecountryis caught in themiddleincometrap?

The theory of middle-income trap indicate that the determinants of growth in low-income and high-income levels may be different，and countries may try to transition from an effective growth strategy at low-income levels to a strategy at high-income levels, and thus may fall into the middle income level.

The Malaysiais considered an upper middle-income country. Malaysia used to rely on cheap labour resources to attract foreign capital and advanced technology to develop labour-intensive industries, which lead to rapid industrialization. As Malaysia's economy grows, its national income levels rise and its labor costs rise.

b. Whyisthe countrycaught in the trap?

Singlecompetition (e.g. Saudi Arabia)

Low technology

There are too much cheap labour.

income distribution structure is unbalanced

c. Givingreasons,discuss whatyoubelievearetheimportantsteps that thecountryshould take togetout ofthe trap?

¨ The Malaysia government launched an economic, political and social transformation programme.

¨ Attach importance to development of human capital, cultivate enterprised’ independent innovation ability and encourage technological research and development.

¨ Use private investment to gradually relax restrictions on foreign capital. Because the Malaysia need to input a large number of capital to development.

Rahul Sunny answered 2 months ago

Next > < Previous

Related Solutions

Since the 1980s, the US apparel manufacturing industry has moved to Southeast Asian countries to take...

Since the 1980s, the US apparel manufacturing industry has moved to Southeast Asian countries to take advantage of low cost of labor. The American consumers are enjoying the cheap apparel made in these countries however this benefit comes with a cost to the people who work in these textile factories. The collapse of the Bangladesh textile factory that caused the death of over a thousand people in 2013 made a huge echo in the western world. In this discussion forum,...

3. It has been said that Southeast Asian countries like China, Singapore, and Taiwan, have been...

3. It has been said that Southeast Asian countries like China, Singapore, and Taiwan, have been better able to address the COVID-19 pandemic than other countries because of their experience with SARS. Does this make sense if humans behaved like homo economicus? What biases have we studied that might explain why that experience may actually have helped those countries address COVID-19?

What are the growth policies for high-income, middle-income, and low-income countries?

1. What are the growth policies for high-income, middle-income, and low-income countries?2. Why are lower income economies more subject to volatile inflation?

1.If low-income countries have GDP growth that is faster than that of middle-income countries, which in...

1.If low-income countries have GDP growth that is faster than that of middle-income countries, which in turn have GDP growth that is faster than that of high-income countries, this is a pattern of ______________. Select the correct answer below: economic expansion economic growth globalization economic convergence 2.We call the economy's movement from peak to trough and trough to peak the ____________. Select the correct answer below: business cycle business flow economic cycle economic circle 3.Comparing unemployment rates in the United...

Some low-income countries and middle-income countries around the world have shown a pattern of economic convergence...

Some low-income countries and middle-income countries around the world have shown a pattern of economic convergence with high-income countries. What is this? Illustrate with an example.

2. Across some Scandinavian countries an experiment with a concept called Universal Basic Income is taking...

2. Across some Scandinavian countries an experiment with a concept called Universal Basic Income is taking place. The next question relate to this issue a. Please do a search UBI and explain what it is. b. Using the budget line and indifference curve between income and leisure, • Draw and explain what would happen to the budget line, be sure to discuss if there are changes in the slope or not. Draw the new utility maximization income-leisure combination • Based...

Critically comment on the following statements as they refer to middle-income developing countries

Critically comment on the following statements as they refer to middle-income developing countries "When an economy faces dutch disease the market exchange rate fluctuates around the current account equilibrium exchange rate and the economy goes through a process of de-industrialization."

Poverty is central to health and development in low-income and middle-income countries. State your definition of...

Poverty is central to health and development in low-income and middle-income countries. State your definition of poverty prior to studying public health. Based on this definition, what would be the focus of poverty alleviation solutions? Based on the relational and spiritual definition of poverty, discuss how the focus of solutions would change to include a holistic approach. Identify an example of a health program or solution that integrates a relational definition of poverty. Watch the video on "Defining Poverty" to...

What are the main sources of air pollution mainly in low and middle income countries?

Why have so many Asian economies struggled to escape the middle-income trap? What lessons can be...

Why have so many Asian economies struggled to escape the middle-income trap? What lessons can be learned from those countries that have already escaped the middle income trap? Has China escaped the trap? If so, explain how. [10 marks]

Subjects