The Middle Income Trap
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- Опубліковано 13 вер 2015
- Do rapid rates of growth propel developing nations to fully developed status, or do some countries tend to get ""stuck""? The latter seems to be true, so here's a look at what we know about a puzzling and important phenomenon.
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1:45 What goes wrong
2:46 The US Growth
3:25 How to break through The Middle Income Trap
3:55 China
4:57 More readings
Because competition between countries is much more aggressive than before : South Korea (1970s) and Japan (1950s) started developing massively at a time when they were the only countries where production was cheap . Nowadays countries such as China or Malaysia face competition from a constantly growing number of countries with lower production costs.
Well, then we have Argentina…who was amongst the worlds most developed countries in the 20s and 30s, and has retreated back to middle income trap 😂
The way i see it is the middle income trap is a matter of perception , think about it from opposite direction. He says it is result of less expansion. What if it is a result of to fast expansion. Rapid expansion happens through massive quantity of debt and debt needs to be serviced , servicing larger and larger debt eventually removes more and more from real economy which then leads to stagnated growth. Debt servicing slavery ! If a country goes with a slow and steady sustainable approach they don't have a boom bust growth and they avoid stagnated periods but they also can't compete with countries that leverage huge debt @ the cost of their citizens.
Lol. Latin American countries have some of the highest inequality in the world. Compare that to any east asian country.
great thanks
Can we apply this on Eastern Europe as well or is it only due to corruption?
India is going to be one of them.
@lord Zeus Don't you think India will be able to break through this trap ? It has an advantage in terms of demography and also I believe we have the capability of developing indigenous innovative technologies to solve our problems.......
What do you think ?
Unfortunately our 1.economic decision process is politically motivated populist policies.
2.Subsidies are increasing that means more and more people are unable to meet their end needs.
3. We only export raw materials, refind oil and generic drugs, meat like these countries. No new commodity adding.
4. Our consumer goods or electronic goods producers are not able to compete with international players for example Micromax and carbon mobile companies are almost done Maruti Suzuki ruling indian market.
5. Unemployment rate is all time high in 45 years (7.2 % centre for monitoring indian economy data)
6. Indian local consumer market is shrinking.
@@lordzeus8984 You are absolutely right in ur analysis. I think there are 10-15 years before "Middle Income Trap" becomes an actual problem in the Indian context.....till then India can definitely work on its weakspots. Of course it needs strong political intent ; but alongside I feel a paradigm shift in the lower middle class section of the society in terms of education is needed...... Anyway, I would like to be on a more optimistic side of the matter. What do u say ??
1. first we should improve quality of small consumer products. Export them and earn some money and develop trade contacts Around the world.
For example
South Korea sold good quality nailcutters for many years.
China started mass production of decorative items for export.
Then we can move on focus on big things like car and expensive electronic goods.
For that Government should focus on R&D and infrastructure development in every sector.
This way we can increase quality jobs in manufacturing sector. Because service sector is not producing quality jobs(delivery boy and call centre jobs only)
And government should redesign education system according to the needs of economy.
For example
Government should ease the terms and conditions for opening of medical Colleges so number of seats will increase and we would be able to provide a doctor for every citizen.This will help our economy. And save millions of dollars.
@@lordzeus8984 hi going thru your conversation and wanted to add my points, i know manufacturing sector can generate more employement, however, due to income rise in china all other manufacturing companies are looking at India due to low income levels, you have mentioned redesign edu system which will be a long term plan, and don't know how an increase in medical colleges and doctors help the economy, more over agriculture sector contributes to 50% of the employement and will be very difficult to move peolpe to manufacturing sector.
Is that Tyler lol?
I think so i was just listening to cwt
@@judeffr Clearly a man of great taste in podcasts
E EE er
*Well this "video" has NOT aged well AT ALL.*
France is stuck in the middle income trap. France's GDP per capita has remained below $39,500 for the past 20 years, while the United States, Japan, Singapore, Canada, and Australia have had GDP per capita of $45,000 or more for the last 20 years.
James Lol. First world problems! You are really cracking me up. A French man walks into an Indian village and says “I feel you man! I also can’t afford to buy all the food I would like”
Middle income is about underdeveloped countries with high $$$ growth, but people with substandard lives. Comparing France to countries in this situation is quite insulting. Do you have a problem with $39.5K? Have you added: education, medical, transportation, safety, and all other state services?
Because a “middle class” household from a country in this situation pays for all that with less than $39k.
It's more like high income steady state...
France is a developed country