By Leslie D. Venzon
BORACAY ISLAND, Aklan, May 17 (PNA) — The Philippines is urging other middle income countries, particularly Asia-Pacific Economic Cooperation (APEC) economies, to promote skills upgrades and innovation in small and medium enterprises (SMEs) to enable the poor to share the benefits of economic growth.
National Economic and Development Authority (NEDA) Assistant Director-General Rosemarie G. Edillon underscored the importance of this initiative to enable these middle-income countries graduate to high-income status.
“Escaping the so-called middle income trap requires governments and the private sector — both firms and individuals — to do things differently and to continuously innovate to keep up with the growing demand associated with globalization,” she said at the sidelines of the APEC seminar on the middle income trap held here recently.
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.
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.
Edillon said middle income countries need to upgrade their products and processes in the global value chains through focused interventions on SMEs and provisions for regulatory efficiency and greater incentives for skills upgrade.
The NEDA official said it is imperative for these countries to “offer a level playing field to ensure inclusivity.”
“Reforms in structural policies and regulations, infrastructure, education, and institutions, should be prioritized, as the main challenge really is to ensure that even the poor are able to participate in the growth process,” she added.
The seminar discussed the challenges of middle income economies in sustaining economic growth to become high income economies.
This will serve as an input to future APEC work on the area, especially to the Structural Reform Ministerial Meeting slated in September.
The Philippines is hosting 31 APEC meetings all over the country this year. (PNA)