Wikipedia defines the middle income trap as a situation where a country which attains a certain income (due to given advantages) will get stuck at that level.

As wages rise, manufacturers often find themselves unable to compete in export markets with lower-cost producers elsewhere; yet they still find themselves behind the advanced economies in higher value products.

Malaysia is currently trapped in this middle income trap. As cost of production rises due to rising costs contributed by rising property prices and variable expenses such as wages, transportation and energy costs, Malaysia is finding it increasingly difficult to remain competitive in the global market.

Today, we are unable to compete with countries such as Vietnam and China when it comes to low-technology driven industry such as the garment industry since production costs here are much higher.

At the same time, we are unable to attract the high-technology industry or the lucrative financial service sector since we lack the necessary human resources and infrastructure in comparison say to Hong Kong and Singapore.

In the area of tourism, we are still far behind our Asean peers such as Thailand and Indonesia.

The failure of the present government is not for failing to foresee this trap but the inept attitude of not doing anything substantial to escape this trap.

Case in point: Crude palm oil industry

Without a doubt we are the pioneers and once leader of the global CPO industry. Malaysia reached its zenith in the late 90's and early 2000's.

Having reached the top, instead of embarking on the next phase or next evolution of the industry, we choose to rest on our laurels and we are now paying the price for our complacency.

Today, we are no longer numero uno in the CPO industry. In 2010, Indonesia had already surpassed Malaysia as the world's largest producer of palm oil, with Indonesia accounting for 48 percent of the world's total production vis-a-vis Malaysia's 37 percent.

With diminishing land available for replanting and lack of available labour resources, Malaysia's palm oil industry will face greater challenges to maintain its position among the leading producers in time to come.

Having been overtaken by Indonesia, countries such as Thailand, Papua New Guinea and Cambodia are hastening their pace and breathing down our neck in this lucrative industry.

We have forfeited a great opportunity to move our palm oil industry to the next level. Intense labour and great concentration of resources from the government in the 80s and 90s would have propelled Malaysia to an enviable position within the industry.

The government and major industry players should have invested heavily in the technological aspect of CPO especially on its yield return, quality and more importantly, usage.

The government on their part should have taken the lead in preparing our future minds and graduates for this sector.

Scholarships and incentives should be handed out to the best of minds be it for local or foreign students to accelerate the research needed for future industrial uses.

Without sufficient human resource capital as support, no industry can flourish.

It's estimated that 95,000 graduates in Malaysia are currently unemployed.

Why is it that they cannot find jobs? The government lacks a holistic plan to introduce graduates into the job market as there are no industries to support them in the first place.

In sum, proper long-term planning is crucial for future survivorship of our country in this everchanging global environment.

No expense should be spared to prepare our future workers for the right industries and it is incumbent upon the government to ensure the availability of industries and labour required to break this middle income trap.