Reforms, inclusivity needed for high-income nation - economist

There is a need for structural reforms, innovation, and inclusive growth for countries, including Malaysia, to propel themselves towards high-income status, said an economist.

World Bank Group chief economist Indermit Gill said countries in the middle-income trap often face challenges such as slowing productivity, lack of innovation, and income inequality.

“To move from middle-income to high-income status, countries must focus on enhancing productivity and fostering innovation while ensuring that economic growth benefits all segments of society,” he said.

He was presenting his keynote lecture titled “Economic Growth in Middle-Income Countries: How Can Countries Escape the Middle-Income Trap?” in Kuala Lumpur, today.

Indermit highlighted the importance of investing in human capital, as well as the role of digital transformation in driving economic growth.

“Education and skill development are fundamental and nations need to reform their education systems to meet the demands of the modern economy, particularly in areas such as Science, Technology, Engineering, and Mathematics.

“Adopting and integrating advanced technologies in various sectors can significantly boost productivity, which includes digitalisation of services, automation in manufacturing, and development of high-tech industries,” he added.

Addressing income inequality was another major point in Indermit’s presentation, where he stressed that equitable growth is essential for sustainable development.

He said policies must support small and medium-sized enterprises and ensure the benefits of economic growth are widely shared.

He also noted the importance of environmental sustainability.

“Countries must consider the environmental impact of their growth strategies. Investing in green technologies and promoting sustainable practices are critical for long-term prosperity,” he said.

Indermit reiterated that escaping the middle-income trap requires a holistic approach, combining structural reforms, innovation, human capital development, and good governance.

- Bernama

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