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Potential Costs to Asia of the Middle Income Trap

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  • Harpaul Alberto Kohli

    (Centennial Group International and the Emerging Markets Forum)

  • Natasha Mukherjee

    (Centennial Group International and the Emerging Markets Forum)

Abstract

Asian countries have the ability to dramatically improve their standards of living in coming decades, so much so that by 2050 the “converging” middle-income countries could become affluent societies. Historically, however, many fast-growing countries have stagnated upon reaching middle-income status, a phenomenon known as the “Middle Income Trap.” This article quantifies possible opportunity costs of Asian countries falling into or staying in the Middle Income Trap rather than sustaining or emulating current successes. Opportunity costs are quantified in terms of income and affluence, output and Asia’s share of the world’s economy, infrastructure critical to health (population without access to an improved water source, population without access to improved sanitation, and non-urban road net-work density), and infrastructure related to consumption (port and airport activity). However, there are further obstacles in addition to the Middle Income Trap—five other “mega”-challenges—and if those were not to be overcome the opportunity costs would be worse.

Suggested Citation

  • Harpaul Alberto Kohli & Natasha Mukherjee, 2011. "Potential Costs to Asia of the Middle Income Trap," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 291-311, September.
  • Handle: RePEc:emf:journl:2011c-3
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    Cited by:

    1. Claudio Loser & José Fajgenbaum, 2012. "A New Vision for Mexico 2042: Achieving Prosperity for All," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 155-195, May.
    2. Harpaul Alberto Kohli & Y. Aaron Szyf & Drew Arnold, 2012. "Construction and Analysis of a Global GDP Growth Model for 185 Countries through 2050," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 91-153, May.
    3. Harinder Kohli & Ashok Sharma & Anil Sood (ed.), 2011. "Asia 2050: Realizing the Asian Century," Books, Emerging Markets Forum, edition 1, number asia2050, August.
    4. Gill,Indermit S. & Kharas,Homi, 2015. "The middle-income trap turns ten," Policy Research Working Paper Series 7403, The World Bank.
    5. Semih Gökatalay, 2015. "Political Economy of Middle-Income Trap Concept," EY International Congress on Economics II (EYC2015), November 5-6, 2015, Ankara, Turkey 275, Ekonomik Yaklasim Association.

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