Middle-income trap is widely held as an intermediate but durable and pernicious situation when countries are unable to compete against advanced economies (in high technology industries) while facing increased competition from less developed economies (in labor-intensive industries), especially as the latter (in particular China, but other countries as well such as Vietnam) have massively penetrated the global trade economy in the last 15 years.
In Malaysia, the term has been used since the beginning of the decade and is deeply embedded in the 10th Malaysia Plan and the Economic Transformation Programme. Contemporary debates on middle-income trap have been recently fuelled by reports such as the Human Development Report from UNPD-Malaysia entitled Redesigning an Inclusive Future (2013) and the Asia Foundation Report's Malaysia in the Middle Income Trap? Economic Myth/Political Reality (2014).
In this seminar, the author wishes to contribute to this intense debate on the middle-income trap in Malaysia. She will particularly focus on an aspect of the debate that has been somewhat overlooked so far, i.e. the question of the methodological, conceptual and theoretical validity of the 'Middle Income Trap'. In doing so, the author argues that we can reappraise the classification of Malaysia in the middle-income trap from another (new) point of view. Beyond this debate, she will also discuss another recent assigned Malaysia's trajectory, i.e. towards a Middle Class Society (World Bank Monitor, December 2014).