Aaron Flaaen, Ejaz Ghani, Saurabh Mishra, 22 July 2013

Many developing countries are stuck in the middle-income gap. Focusing on Malaysia, this column argues that countries trapped in the middle-income conundrum will need to expand their ‘modern’ sectors. Traditional sectors with low productivity must shed labour, and high-productivity modern sectors (be they in goods or services) must hire more labour if they want to grow.

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