How to Avoid Middle Income Traps : Evidence from Malaysia

How to Avoid Middle Income Traps : Evidence from Malaysia

Malaysia's structural transformation from low to middle income is a success story, making it one of the most prominent manufacturing exporters in the world. However, like many other middle income economies, it is squeezed by the competition from low-wage economies on the one hand, and more inno...

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Bibliographic Details
Main Authors: Flaaen, Aaron, Ghani, Ejaz, Mishra, Saurabh
Language:en_US
Published: World Bank, Washington, D.C. 2013
Subjects:
Accelerator, accounting, accounting framework, ADB, advanced economies, advanced economy, agriculture, American Economic Review, asset prices, audits, average growth rate, average growth rates, benchmark, business cycles, Business Opportunities, capita growth, capital accumulation, capital flows, capital inflows, capital markets, collateral, commodities, commodity, communication technology, communications infrastructure, comparative advantage, competitive markets, competitiveness, consumers, cost differentials, cost of capital, country markets, country to country, critical mass, current account balance, current account surplus, data quality, Debt, developed countries, Developing countries, development path, development policy, domestic consumption, domestic demand, drivers, durable goods, Economic Activity, economic development, economic downturn, economic efficiency, economic growth, Economic history, Economic Management, economic performance, economic recovery, Economic Theories, elasticity, emerging economies, emerging markets, employment growth, entrepreneurship, excess supply, Export Growth, export markets, exports, exposure, external finance, external financing, externalities, financial crisis, financial institutions, financial markets, Financial Services, foreign capital, foreign capital flows, Foreign Direct Investment, foreign direct investments, foreign financing, foreign firms, foreign ownership, future growth, GDP, GDP per capita, global business, global economy, Globalization, Government Debt, growth rate, growth rates, high income, high wages, human capital, Income, income elasticity, income levels, increasing returns, industrial countries, industrialization, information services, innovation, innovations, insurance, International Comparisons, international competition, International cooperation, international financial markets, international markets, International Monetary Fund, INTERNATIONAL TRADE, job creation, labor force, labor market, labor markets, labor mobility, labor productivity, labor-market, Labour, level of development, liberalization, low income, low-income countries, Macroeconomics, manufacturing industries, marginal productivity, marginal products, market share, Middle Income, middle income countries, middle income country, middle-income countries, middle-income country, middle-income economies, middle­income, migration, national accounts, network externalities, occupations, open economy, outsourcing, per capita income, per capita incomes, power parity, price levels, production function, production process, productivity, productivity growth, productivity increases, purchasing power, purchasing power parity, rapid economic growth, rapid expansion, rapid growth, rate of growth, real estate, real GDP, real wages, Regulatory Restrictions, remittances, risk aversion, risk sharing, savings, skilled labor, skilled workers, social cohesion, social entrepreneurs, structural change, structural transformation, tax, tax revenues, technological advances, technological change, technological changes, technological innovations, technology transfer, telecommunications, total factor productivity, total output, track record, trade flows, transport, unemployment, urbanization, value added, volatility, wage increases, wages, wealth, World Development Indicators, WTO
Online Access:http://hdl.handle.net/10986/16324
Description
Summary:Malaysia's structural transformation from low to middle income is a success story, making it one of the most prominent manufacturing exporters in the world. However, like many other middle income economies, it is squeezed by the competition from low-wage economies on the one hand, and more innovative advanced economies on the other. What can Malaysia do? Does Malaysia need a new growth strategy? This paper emphasizes the need for broad structural transformation; that is, moving to higher productivity production in both goods and services. This paper examines productivity growth for Malaysia at the sectoral level, and constructs several measures of the sophistication of goods and services trade, and puts these comparisons in a global context. The results indicate that Malaysia has further opportunities for growth in the services sector in particular. Modernizing the services sector may provide a way out of the middle income trap, and serve as a source of growth for Malaysia into the future.

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