News: World Banks’s World Development Report 2024 has brought into focus the phenomenon of the ‘middle income’ trap.
1. World Development Report: It is an annual report published by the World Bank that provides invaluable insights on a specific aspect of global development. It focuses on themes like economic growth, sustainable development, and poverty reduction.
2. Middle Income Trap: It refers to a scenario where a country that has achieved middle income status struggles to transition to high income status.
3. Some features of the middle-income trap include stagnant economic growth, innovation deficit, decreased productivity.
4. To break the middle-income trap, the World Development Report highlights the importance of the “3i” Approach: Investment, Infusion, and Innovation.
5. Countries like South Korea and Chile have successfully broken the middle-income trap.
