Читать книгу Growing Beyond the Low-Cost Advantage - Yiping Huang - Страница 9

Many countries experience a growth slowdown after achieving middle-income status. Some 18 countries globally have been “middle income” for the past 50 years, including 12 in Latin America and three in Asia—Malaysia, the Philippines, and Thailand. At their current pace of growth, many will remain trapped for years to come. On the other hand, 14 economies have escaped the trap since 1965, including five in Asia—Hong Kong, China; Japan; the Republic of Korea; Singapore; and Taipei,China. These Asian economies completed the transition from low to high income within 3 to 4 decades.

Avoiding the middle-income trap requires continuous industrial upgrading through innovation and moving from a low-cost to a high-value economy. Low-income countries possess a large pool of surplus labor that limits wage increases when urban industrial and service sectors expand. Firms employ low-level, established technologies that are easily imported and mastered locally, and compete on low cost. Upon reaching middle income, the pool of surplus labor shrinks and—as it approaches the Lewis turning point—wages rise rapidly. Countries must upgrade industry and services through innovation to improve labor productivity—moving from a low-cost to a high-value economy. If they fail to do so, the economy becomes trapped: no longer able to compete with low-income countries but unable to compete with high-income countries.

Moving from a low-cost to a high-value economy requires a critical mass of firms with strong incentives for innovation. It also requires the government to create a conducive environment. This environment should have the following key elements: (i) macroeconomic, political, and social stability; (ii) adequate public investment in infrastructure and human capital; (iii) a well-functioning market system that provides price signals, encourages competition, protects investors, and promotes trade; and (iv) a well designed industrial policy. The East Asia miracle economies possessed most of these characteristics during their take-off periods. Conversely, macroeconomic instability, debt crisis, high-income inequality, social tension, and political instability caused many Latin American countries to remain caught in the middle-income trap.