Middle-income traps: Experiences of Asian countries and lessons for Vietnam

Abstract

Avoiding middle-income traps is one of the critical tasks for developing countries worldwide. Based on an analysis of policies that have contributed to Japan and South Korea achieving high economic development, this study proposes solutions to help Vietnam avoid falling into the middle-income trap. The results of the analysis of the experiences of Japan and South Korea indicate that to escape the middle-income trap, developing countries need to focus on investing in education and training, promoting innovation and entrepreneurship, investing in infrastructure, enhancing international trade, boosting foreign investment, improving competitiveness in the global market, and maintaining macroeconomic stability. Building on the analysis of the economic development situation in Vietnam from 2013 to 2023, this study puts forth solutions to assist developing countries, in general, and Vietnam, in particular, in avoiding middle-income traps.