Despite the Cat’s best efforts translating the interview, I can’t for the life of me understand what Ko is talking about when he says Taiwan is in a Middle Income Trap.
A Middle Income country is defined by the World Bank as one with a Gross National Income (GNI) per capita between USD1,036 and 12,535. Taiwan currently has a GNI per capita of USD33,565, slightly higher than that of South Korea. Broadly speaking both countries have been returning similar figures for years.
China apparently managed to escape the trap around 2015 and now has a GNI per capita of around USD20,000, but given the size of the economy many economists still consider this to be low enough for it to be considered to be still stuck in the trap.
Taiwan successfully escaped the middle-income trap a couple of decades ago, helped by a democratic political system, the nurturing of high-value-added technology industries, for example TSMC, and reduced levels of economic inequality.
Now, Taiwan is actually in danger of falling into a high-income trap, because of its low birth rate, a potential for greater inequality and growing political polarization.
Maybe Ko is mistaken in his terminology and means Middle Class Income which is an entirely different thing and it has to be said that wage disparity and the income gap, particularly in terms of young people, does urgently need to be addressed.
But to say Taiwan is in a Middle Income Trap is economic nonsense. It appears Ko read it somewhere but as usual didn’t bother to read it carefully and understand it before trotting it out in this interview trying to sound like he knows what he’s talking about.
Another Pie in the Face FAIL, I’m afraid.
Tinkerty Tonk…
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