BORACAY, AKLAN— The National Economic and Development Authority (NEDA) is set to host the Asia-Pacific Economic Cooperation (APEC) Seminar on the “middle income trap” tomorrow, May 15, at the sidelines of its second Senior Officials’ Meeting (SOM2).
“The seminar will discuss the constraints of middle income economies in sustaining economic growth to become high income economies. We will review the implications of these constraints and the role of innovation for structural reform and inclusive growth,” said NEDA Deputy Director-General Emmanuel F. Esguerra, who also serves as the leader of the Philippine delegation to the APEC SOM2.
The “middle income trap” is a term used to describe the situation of an economy that has escaped poverty but still unable to graduate into high income status due to uncompetitive industries and underdeveloped human capital, among others.
According to the Asian Development Bank, middle-income economies are classified into two brackets – lower middle-income, which has a Gross Domestic Product (GDP) per capita of at least US$2,000 but less than US$7,250, and higher middle-income, which has a GDP per capita of at least US$7,250 but less than US$11,750.
Nine APEC economies, including the Philippines, are currently classified by the World Bank as middle-income and have remained as such since 1987, when formal income-based classifications began. According to the Philippine Statistics Authority, per capita GDP of the Philippines in 2014 is estimated at PhP71,867.00 in constant prices.
“The concept of a middle income trap remains the subject of an ongoing debate,” Esguerra said. “But we would like to take a closer look and assess whether there are pressing issues and real challenges that middle income countries like ours need to address,” he added.
“Through the event, we are bringing together experts to reflect on current research and work on the middle income trap so as to inform future APEC work in the area. In particular, we would like to have clearer and more specific areas for cooperation that APEC leaders can discuss in the upcoming APEC Structural Reform Ministerial Meeting in Cebu in September,” Esguerra said.
Aside from the seminar, NEDA will also host the APEC Economic Committee Preparatory Meeting for the Structural Reform Ministerial Meeting and the Structural Reform Roundtable Discussion on May 16 and 17, 2015, respectively.