Overcoming Middle Income Traps in Thailand: Lessons Learnt from Singapore

Abstract

The Middle-Income Trap (MIT) is a situation in which a country that hasdeveloped its status from being a low-income country to a middle-income one has a small prospect of developing to the level of a high-income country. Thailand hasbeen stuck in the middle-income trap since 1995, only two years before the Asian Economic Crisis of 1997.2 The poor economic performance and decreasing competitiveness of the Thai economy prompt Thailand’s policymakers to change or reform its development policies.Singapore’s economy has grown 18.93 times over the past fifty years, while Thailand’s economy has grown only 10.91 times.3 The critical development policies of Singapore for the past fifty years are export-led growth strategy, human capitaldevelopment strategy, and research and development strategy.4 These three policies are fundamental in economic development and have also been adopted bythe Thai government to mitigate the MIT.5This case study focuses only on Thai and Singaporean policymakers’ pastand present conduct and implementation of these three development policiesunder different assumptions, constraints, and situations. Thus, in the future,Thai policymakers can learn from Singapore’s experience to adjust and fine-tunenew economic development plans and implement them successfully by adoptingthe lessons learned from Singapore.