According to a press release by the APEC Secretariat, delegates discussed how developing economies stuck in the trap typically achieve initial growth by successfully mobilising inputs based on low-cost advantages, but with rising costs and eroding competitiveness, they then fail to make the leap to the next phase of development.
Tan Jian, APEC Senior Official from China said with its successful work over the years on economic integration, trade and investment liberalisation and structural reform, APEC is well-positioned to help developing economies avoid the middle income trap and graduate into high-income status.
Meanwhile, Professor Huang Yiping of Beijing University cited the example of successful economies such as Japan , Korea , Chinese Taipei, and Hong Kong, which he said were all manufacturing-based economies that employed large numbers of workers during their early stages of development, although they went on different development paths once they reached the middle-income levels.
Dr. Alfred Schipke, Senior Resident Representative of the International Monetary Fund (IMF) for China, echoed the importance of human capital in ensuring continuous improvement in total factor productivity and driving technological progress.
According to Eduardo Pedrosa, Secretary General of the Pacific Economic Cooperation Council, APEC has set goals and made good progress on structural reform, connectivity, infrastructure and ease of doing business.
However, APEC could consider establishing an APEC-wide education initiative and targeted goals to address this middle-income challenge, he added.
During the dialogue, APEC economies that have transformed to high-income status shared some of the ingredients of their success.
Established in 1989, APEC is an intergovernmental grouping that has worked to reduce tariffs and other trade barriers across the Asia-Pacific region, creating efficient domestic economies and dramatically increasing exports.
APEC’s 21 member economies account for approximately 40 percent of the world’s population, about 55 percent of world GDP and 44 percent of world trade. Vietnam joined the forum in 1998.
VNA/VNP
