Mains Answer Writing
Concept Mapping Mentorship- Covering Syllabus Through Themes
- GS & Optional
What do you understand about the middle-income (MI) economy? Why do countries remain in the MI trap?
Category: Economy (GS -III),
Test Date: 01 Oct 2024
Approach
- Introduction: Definition of MI Economy
Demographics: In 2022, MI countries represented 75% of the global population and about 38% of global GDP.
- Understanding the MI Trap:
- The MI trap refers to the stagnation that occurs when countries reach about 11% of the GDP per capita of the U.S., failing to transition to high-income status.
- Only 34 economies have successfully moved from MI to high-income in the past 35 years.
- MI countries face diminishing returns on investment, leading to stagnated growth rates.
- Reasons for Remaining in the MI Trap: Economic Factors, Technological Lag, Institutional Weakness
- Strategies for Escaping the MI Trap: Investment, Infusion, and Innovation, Learning from Examples (Japan and Korea), Policy Reform
- Wrap up your answer with way forward
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