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In an era marked by rapid technological advancements, shifting global dynamics, and pressing environmental challenges, being "Future-ready" has never been more important. For middle-income countries (MICs), this concept is crucial as they face the complexities of an evolving global landscape. With the pressures of technological disruption, climate crisis, and geopolitical shifts, MICs must adapt to ensure sustainable and inclusive growth. The World Development Report 2024 provides a comprehensive analysis of strategies that MICs can adopt to navigate these challenges.
THE MIDDLE-INCOME TRAP
The World Development Report 2024 highlights the "middle-income trap," where countries with incomes per capita between $1,136 and $13,845 struggle to transition to high-income status. These countries face challenges such as rising debt, aging populations, protectionism, and the need for accelerated energy transitions. To overcome these obstacles, the report emphasizes two critical transitions: moving from an investment-driven strategy to one that incorporates technological infusion, and then progressing to an innovation-driven approach.
THE 3i STRATEGY
The report outlines a "3i Strategy"—Investment, Infusion, and Innovation—as a blueprint for middle-income countries seeking sustainable growth. The strategy begins with building a strong foundation through investments in both physical and human capital, creating the necessary infrastructure for growth. Next, integrating global technologies and best practices is vital to enhance productivity and competitiveness. Finally, fostering innovation—through the development of new products, services, and business models—drives long-term sustainable growth. Vietnam’s economic transformation exemplifies the "3i Strategy" in action. Since the early 2000s, Vietnam’s GDP has grown by an average of 6-7% annually, fueled by strategic investments in infrastructure, education, and the adoption of global technologies in manufacturing and agriculture, as reported by Reuters. Vietnam has embraced digital transformation, with a government-backed plan for 2024 to accelerate national innovation and support socio-economic development. By adopting advanced machinery and technologies, Vietnam has increased productivity in key sectors and attracted significant foreign investment. Moreover, the country has fostered innovation through initiatives in technology and e-commerce, strengthening its position in Southeast Asia's economic landscape.
Middle-income countries face significant challenges, including geopolitical tensions, climate change, and social inequality. However, these challenges also present opportunities for innovative policy responses and reforms. By leveraging crises to implement necessary changes, countries can dismantle outdated systems and build more effective and resilient economies.
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