Escaping the Middle-Income Trap
Why Cambodia's Next Economic Miracle Will Be Built in the Provinces For more than two decades, Cambodia has been one of Southeast Asia's great economic success stories. Sensible macroeconomic management, export-led manufacturing and increasing foreign investment have transformed the Kingdom from one of Asia's poorest nations into a lower-middle-income economy. That model worked. The question today is whether it can continue to deliver the next stage of prosperity. As Cambodia pursues the Royal Government's vision of becoming a high-income nation by 2050, policymakers face a new challenge that many developing economies encounter: the middle-income trap. Nations that successfully industrialise often discover that the very policies that generated rapid growth eventually produce diminishing returns. The next phase of Cambodia's development will require a different strategy. GDP Was an Excellent Starting Point—But It Should Not Be the Finish Line Gross Domestic Product (...