Working Papers

Successful Growth in Middle Income Countries: Will East Asia Show the Way Again?

Publication Number: ECESWP121-E

April, 2007

Author : Indermit S. Gill and Homi Kharas

Type : Working Papers

Emerging East Asia has achieved remarkable growth rates since 1998, and successfully integrated both regionally and globally. This paper attempts to contribute to the debate on what this region—and other middle income countries— need to do to join the ranks of developed nations. Besides the importance of exploiting economies of scale, the paper points out that the harder task ahead for Emerging East Asia is to complement global and regional integration with domestic integration. This requires strengthening social cohesion so that societies stay as strong as economies; addressing issues of inequality and rapid urbanization; and providing clean governments which efficiently reinvest the economic returns that accompany fast growth. If developing East Asia’s policymakers can succeed in making this third integration as successful as the first two, they can, within a generation, eliminate poverty and hence provide valuable lessons for middle income countries around the world.