Caught in middle-income trap


A graduate teacher starts at RM2,500 per month in Malaysia, compared to RM6,196 in Singapore and RM15,661 in Hong Kong. Malaysian wages have fallen behind partly due to the gross divergence between the suppressed Malaysian CPI and that of the world.

OVER the last few months, there has been much discussion on the issue that Malaysia has been caught in the middle-income trap. In this article, I will discuss the rationale on why Malaysia has been caught in this dilemma, and some of the steps we need to take to emerge as a high-income economy.

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