World Bank warns 108 countries risk being stuck in 'middle-income trap'
The World Bank warns that 108 countries, including China and India, risk a middle-income trap due to outdated growth strategies. A new "3i strategy" is suggested for sustainable economic growth.
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The World Bank has issued a warning that 108 countries, including major economies like China, India, Brazil, and South Africa, are at risk of becoming trapped in a "middle-income trap." This situation arises when nations, after achieving a certain level of income, struggle to transition to high-income status. The report highlights that these countries heavily rely on outdated growth strategies, primarily focusing on investment without adequately incorporating innovation and technology. The World Bank's chief economist, Indermit Gill, noted that under current trends, it could take China 10 years and India 75 years to reach just 25% of US income levels.
The report indicates that middle-income countries, which house 75% of the global population and generate over 40% of the world's GDP, face significant challenges, including aging populations and rising protectionism. The World Bank suggests a "3i strategy" tailored to a country's development stage: starting with investment, then incorporating technology (infusion), and finally fostering innovation. This approach aims to help these nations escape the middle-income trap while addressing environmental concerns associated with carbon-intensive growth. The report emphasizes the urgency for these countries to adopt new strategies to achieve sustainable economic growth and improve living standards for their populations.
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