Reform deficit risks middle-income trap for Indonesia

2015 ◽  
Keyword(s):  
Economic Policy ◽  
Capita Income ◽  
Industrial Innovation ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Administrative Reforms ◽  
The World ◽  
Per Capita ◽  
Middle Income Trap

Subject Economic prospects. Significance With per capita income of some 3,600 dollars, Indonesia is at the lower end of the World Bank's 1,000-12,700 dollar range for middle-income countries. There is growing concern that rising protectionism and uncertainty regarding economic and administrative reforms could impede gains in productivity, innovation and competitiveness. A sustained decline in competitiveness would risk a 'middle-income trap' as investment and growth slow, and incomes stagnate. Impacts Indonesia's inward-looking economic policy risks impeding progress on infrastructure, skills and industrial innovation. Competitors such as Malaysia and Thailand would gain if Indonesia fails to boost its competitiveness. Stagnant education and skills levels carry instability risks given Indonesia's youth bulge.

scholarly journals Measurement of the real urbanization level in China and its international comparison

2019 ◽  
Vol 2 (2) ◽  
pp. 287-317
Author(s):  
Jiming Cai ◽  
Du Guonan ◽  
Liu Yuan
Keyword(s):  
Rapid Development ◽  
High Income ◽  
Middle Income ◽  
Urbanization Level ◽  
Content Type ◽  
The Real ◽  
Middle Income Countries ◽  
The World ◽  
Per Capita ◽  
Urbanization Rate

Purpose The purpose of this paper is to estimate the real urbanization level in China so as to provide a measurement that can be compared with the international level. Design/methodology/approach Taking into consideration 300m residents living in the administrative towns (300m residents here are referred to the population in administrative towns, including those in all counties), the gap between the urbanization rate of China and that of the world average becomes much wider. Findings China, however, implements the administrative system of government at the central, provincial, municipal, county and township levels. By city, it means the jurisdiction at and above the level of county, which includes the municipality directly under the central government, prefecture-level municipal and county. By town, it means the jurisdiction below the level of county (including the Chengguan Town, or capital town, where the county government is located) and exclusive of rural townships. Originality/value China has witnessed rapid development for 40 years since the reform and opening up in 1978. Nowadays, China has already stepped into the period of post-industrialization, with its urbanization rate (UR) of permanent population reaching 58.58 percent. However, on the basis of registered population, the UR is 43.37 percent, which is not only far below the average level of 81.3 percent in high-income countries, but also lower than the average of 65.8 percent in upper middle-income countries which are comparable to China in terms of per capita income. (The classification of state income level is based on the data of national income per capita and division standards in 2016 from the World Bank, in which annual revenue per capita in high-income countries reaches over US$12,736 and that in upper middle-income countries between US$4,126 and US$12,735.)

scholarly journals A Discussion on Whether Turkish Economy is in Middle Income Trap or Not: A Perspective on Framework of the Exchange Rates Appreciation

2015 ◽  
Author(s):  
Murat Nişancı ◽  
Mine Gerni ◽  
Adem Türkmen ◽  
Ömer Selçuk Emsen
Keyword(s):  
Exchange Rate ◽  
Income Group ◽  
Middle Income ◽  
Income Per Capita ◽  
Middle Income Countries ◽  
Turkish Economy ◽  
The World ◽  
Middle Income Group ◽  
Per Capita ◽  
Middle Income Trap

Since 2007 long staying in the middle income group or especially unable to state a higher category, has begun to be considered as middle-income trap (MIT). According to World Bank (WB) classification, in 1955, Turkey reached to lower-middle income countries category from low-income category and staying there about 50 years. In 2004 Turkey has been reached constantly to upper-middle income countries category. However, last three years’ low growth figures and reaching 20% of the US income per capita have created many discussions whether Turkey entered in MIT. Besides, in parallel the integration of Turkish Economy to the world economy and to be exposed financial flows because of the world expansionary policies may result to have excessive appreciation of the national currency and to seem overvalued than real level of GDP in dollars. In emerging artificial bloating in income per capita is a result of undervaluation on the exchange rate. Therefore, in this study; the correct exchange rate is calculated with using base year determined depending on current account deficit’s minimum valued year or years which is assumed correct value of the exchange rate. By using calculated exchange rate, examined new GDP per capita series shows that Turkish economy could not reach the threshold 10000-12000 dollars despite being included in upper-middle income group in the WB classification. Furthermore, according to other classifications which are investigating MIT, it is also reached that Turkey has been placed in MIT long time period due to exchange rate pressures in terms of Turkey reached upper middle income position.

scholarly journals Global competitiveness divide and the middle-income-trap

2020 ◽  
Author(s):  
Timothy Yaw Acheampong
Keyword(s):  
High Income ◽  
World Economic Forum ◽  
Middle Income ◽  
Income Levels ◽  
Global Competitiveness ◽  
Middle Income Countries ◽  
Income Status ◽  
The World ◽  
World Economic ◽  
Middle Income Trap

In recent times, the middle-income trap (MIT) has become a pertinent issue as economists, researchers and development practitioners continue seek answers to why the majority of middle-income countries find it difficult to advance to high-income status. There is still no consensus in literature as to the exact cause(s) and the solution to the MIT. The World Economic Forum posits that, the score of countries on the Global Competitive Index (GCI) 4.0 accounts for over 80% of the variation in income levels of countries. This suggests that the extent of global competitiveness of countries could potentially help them to escape the MIT. However, some competitiveness literature have identified an apparent competitiveness divide among countries. This paper therefore seeks to answer the following questions: how does middle-income countries differ from the high-income countries in terms of global competitiveness. The study utilises an independent samples t-test and effect size measures to examine the GCI 4.0 scores of 140 countries. The study finds a very large and significant competitiveness divide between the high and middle-income countries.

Achieving SDG target 8.1 (sustain economic growth) in developing countries: how aid for trade policy and regulations can assist?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chandan Kumar Roy ◽  
Huang Xiaoling ◽  
Banna Banik
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Trade Policy ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Aid For Trade ◽  
Per Capita ◽  
Sustainable Economic Growth

Purpose This study aims to examine how aid for trade policy and regulations (AfTPR) contribute to achieving Sustainable Development Goal (SDG) target 8.1 (sustain per capita economic growth) and whether the effectiveness of AfTPR is conditional to the stable political environment. Design/methodology/approach This paper uses a widely accepted endogenous growth framework and applies panel data fixed effects and two-step difference and system generalized method of moments estimation strategies on panel data of 50 developing countries over 2005–2017. Findings The findings of the study confirm that aid to trade policy promotes sustainable economic growth in developing countries, but this category of development assistance is only effective and significant for low and lower middle-income (LLMI) economies. The positive and significant effect of AfTPR in upper middle-income countries is conditional to their level of political stability. Under a stable political situation, the positive effect of AfTPR on sustainable growth remains almost same for the LLMI countries, whereas for the upper middle-income countries this growth effect reached almost double. Research limitations/implications International trade is considered as a driver for inclusive and sustainable economic growth, whereas aid for trade is acknowledged for its prospective contribution toward achieving these goals. The findings have dominant policy implications for the international development organizations and donors, which recommend that it is more desirable to transmit aid toward developing and implementing trade policy and regulations as per capita economic growth improves in the aid recipient countries. Originality/value According to the authors’ knowledge, no prior study empirically analyzes the effect of AfTPRs on SDG target 8.1.

scholarly journals ANALISIS MIDDLE INCOME TRAP DI INDONESIA

2017 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
Asmirawati Asmirawati
Keyword(s):  
Capita Income ◽  
Direct Investment ◽  
Least Square ◽  
High Tech ◽  
Per Capita Income ◽  
Middle Income ◽  
Level Of Education ◽  
Income Per Capita ◽  
Per Capita ◽  
Middle Income Trap

This paper aims to analyze middle income trap in Indonesia where per capita income is the main indicator in determining whether a country is included in the middle income category or not. By looking at the effect of high technology products , education level, direct investment and dependent ratio on per capita income in Indonesia. The results of this model use the ordinary least square method, which shows that the export of high-tech products has a positive and significant effect on per capita income, the level of education has a positive and significant effect on per capita income, direct investment has a negative and significant effect on per capita income, the ratio has a positive and significant effect. income per capita and high-tech product exports, level of education, direct investment, and the ratio have a significant effect on income per capita in Indonesia.

Are low- and middle-income countries profiting from fast fashion?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Karan Khurana ◽  
S.S. Muthu
Keyword(s):  
Economic Development ◽  
Value Chain ◽  
Developed Countries ◽  
Environmental Cost ◽  
Fast Fashion ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
The World ◽  
Low And Middle Income

PurposeIn the last two decades, the fashion value chain traveled to developing parts of the world. To these nations, it paved a path for socio-economic development initially but lately, the aftermath has costed more. This article visualizes the gains and losses of fast fashion to these countries.Design/methodology/approachAn in-depth systematic literature review was performed to analyze the secondary data from academic journals and reports from international organizations. The authors have compiled their empirical journeys in academia, research and industry from low- and middle-income countries (LMICs) based on Schon's (1983, 1990) theory of reflective practice. Further on, the article is structured using the value chain analysis (VCA) method which visualizes the aftermath of mass-producing fashion for the developed countries.FindingsIn this research it was found that LMICs have made substantial economic progress in the past two decades, however at a high social and environmental cost. It is the right time to find a balance between economic development and harm caused to the citizens of these nations.Originality/valueAt the moment the existing academic literature talks about unsustainable practices in the fashion sector around the world. This research precisely targets the LMICs where the aftermath is supposed to be much more severe. Further, it provides solutions and urges these nations to bring a substantial change throughout the value chain for a robust future.

The Economic Fitness of Nations in Value Added. 2000-2014

2021 ◽  
Author(s):  
Rosario Cervantes-Martinez ◽  
Jorge Villaseñor-Becerra
Keyword(s):  
World Bank ◽  
Positive Relationship ◽  
Value Added ◽  
Production Networks ◽  
Global Production Networks ◽  
Middle Income ◽  
Middle Income Countries ◽  
The World Bank ◽  
The World ◽  
Per Capita

Abstract In this paper, we explore the Economic Fitness (EF) indicator from the World Bank Database that measures nations' level of international competitiveness. At the same time, using input-output tables, we present our estimations of this new metric, replacing the revealed comparative advantages (RCA) from exports in gross value with an estimate of RCA from exports in domestic value-added (DVA). We find that between 1995 and 2015, there is a positive relationship between Economic Fitness and per capita GDP for low and middle-income countries. Besides, from 2000 to 2014, there has been a widening gap between global exports in gross value and exports in value-added; we also show that the estimations of the EF using the domestic value-added content of exports change significantly. Suggesting that, given the increasing levels of productive links at the international level, the competitiveness of nations is also conditioned by the way they participate in global production networks.

On the structure of the present-day convergence

2014 ◽  
Vol 31 (2/3) ◽  
pp. 139-152 ◽  
Author(s):  
Andrey Korotayev ◽  
Julia Zinkina
Keyword(s):  
Global Convergence ◽  
Low Income ◽  
High Income ◽  
Low Income Countries ◽  
Unconditional Convergence ◽  
Gdp Per Capita ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Per Capita

Purpose – A substantial number of researchers have investigated the global economic dynamics of this time to disprove unconditional convergence and refute its very idea, stating the phenomenon of conditional convergence instead. However, most respective papers limit their investigation period with the early or mid-2000s. In the authors’ opinion, some of the global trends which revealed themselves particularly clearly in the second half of the 2000s call for a revision of the convergence issue. The paper aims to discuss these issues. Design/methodology/approach – Several methodologies for measuring the global convergence/divergence trends exist in the economic literature. This paper seeks to contribute to the existing literature on unconditional β-convergence of the per capita incomes at the global level. Findings – In the recent years, the gap between high-income and middle-income countries is decreasing especially rapidly. The gap between high-income and low-income countries, meanwhile, is decreasing at a much slower pace. At the same time, the gap between middle-income and low-income countries is actually widening. Indeed, in the early 1980s GDP per capita in the low-income countries was on average three times lower than in the middle-income countries, and this gap was totally overshadowed by the more than ten-time abyss between the middle-income and the high-income countries. Now, however, the GDP per capita in low-income countries lags behind the middle-income ones by more than five times, which is largely the same as the gap (rapidly contracting in the recent years) between the high-income and the middle-income countries. This clearly suggests that the configuration of the world system has experienced a very significant transformation in the recent 30 years. Research limitations/implications – The research concentrates upon the dynamics of the gap in per capita income between the high-income, the middle-income, and the low-income countries. Originality/value – This paper's originality/value lies in drawing attention to the specific changes in the structure of global convergence/divergence patterns and their implications for the low-income countries.

Latin America's wealthiest untouched by redistribution

2018 ◽  
Keyword(s):  
Latin America ◽  
Middle Class ◽  
Income Tax ◽  
Tax System ◽  
Middle Income ◽  
Middle Classes ◽  
Content Type ◽  
Middle Income Countries ◽  
The Poor ◽  
The World

Subject Patterns of inequality. Significance Inequality across the world varies significantly, particularly among middle-income countries. Much of this variance is the result of differences in the income shares of the poor and rich since the middle class receives a similar level of income in most cases. Latin America occupies a peculiar position in these comparisons: it is the most unequal region in the world because the wealthy are able to control more income than anywhere else. Impacts Effective measures to tackle inequality would require politically difficult reforms of the income tax system. Pressures to redistribute resources to the poor will squeeze the middle classes in times of muted growth. Elite power will be particularly significant in countries such as Colombia and Brazil, if less so in Argentina and Uruguay.

Socio-economic disparity in the occurrence of disability among older adults in six low and middle income countries

2019 ◽  
Vol 12 (1) ◽  
pp. 60-75 ◽  
Author(s):  
Mohammad Hifz Ur Rahman ◽  
Ashish Singh
Keyword(s):  
South Africa ◽  
Older Adults ◽  
Economic Status ◽  
Bivariate Analysis ◽  
Partial Credit Model ◽  
Adult Health ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
The World

PurposeNearly 200m people in the world experience considerable functioning difficulties. Also, more than three-fourth of the population aged 50 years and over is suffering from some kind of disability in India, China, Ghana, Russia, Mexico and South Africa. Despite the compelling nature of this issue, evidence on socioeconomic disparity in the occurrence of disability is lacking throughout the world and particularly in the aforementioned countries. The purpose of this paper is twofold – first, to examine the socioeconomic inequalities in the prevalence of disability in the selected countries; and second, to investigate the cross-country differentials in the prevalence of disability by socioeconomic characteristics.Design/methodology/approachThe authors use data from the Study on Global Ageing and Adult Health (SAGE) conducted in China, Ghana, India, Mexico, Russia and South Africa during 2007–2010. Disability scores have been constructed using Item Response Theory Partial Credit Model based on eight health and functioning domains. Bivariate analysis, concentration curves, concentration indices and multivariate regressions have been used in the analysis presented in this paper.FindingsThe authors find that the prevalence of disability varied considerably across sociodemographic groups. Moreover, this variation is not uniform across all countries. Also, age, Sex, work status, years of schooling and economic status emerged out as significant predictors of disability among the studied countries.Originality/valueThis is perhaps the first study which examines the socioeconomic inequality in disability conceptualized in a comprehensive manner among older adults spread across low to upper middle income countries. The alarming level of prevalence of disability among sociodemographic disadvantage groups calls for immediate attention in terms of detailed study of risk factors, effective policy and timely intervention.

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