Edo Andriesse

Bouncing back after the COVID-19 pandemic has proven to be more difficult than anticipated. Many countries continue to be trapped in the middle-income category and breaking out remains hard. The domestic — both personal and geographical — dimensions of this trap and how integrated policies could contribute to economic transformation and inclusive development deserve closer attention. Ideally, these efforts could help countries escape the middle-income trap.

According to the World Development Report 2024, Poland managed to break out of this trap; crossing the threshold of a gross national income (GNI) per capita of $14,005 — the benchmark for high-income economies. But what if Poland had not been a member of the European Union? Poland has greatly benefited from increased trade, investment, migration and remittance flows since 2004. In other parts of the world like Latin America, Asia and the Pacific, the overall picture is less rosy.

Notable Asian-Pacific upper middle-income countries are Malaysia, Thailand, Kazakhstan, Maldives, Fiji and so far, China as well. In these countries economic growth slowed down in the 2010s and public policies did not sufficiently benefit the middle class. People began to protest, even before the COVID-19 pandemic, and in Indonesia, the fourth most populous country in the world with over 280 million people, the middle class shrank. Instead, the aspiring middle-class group expanded between 2019 and 2024, with approximately 50 percent of the Indonesian population now belonging to this group. For India,........

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