The middle income trap is an economic development situation in which the country that attains a certain income due to condition advantages gets stuck at that level. The term was presented by the World Bank in 2006 & is defined by them as the 'middle-income range' countries with gross national product per capita that has remained between $1,000 to $12,000 at constant 2011 prices.
According to the concept, a country in the middle-income trap has lost its competitive edge in the export of manufactured goods due to rising wages, but is unable to keep up with more developed economies in the high-value-added market. As a result, newly industrialized economies such as South Africa and Brazil realize not, for decades, left what the World Bank defines as the 'middle-income range' since their per capita gross national product has remained between $1,000 to $12,000 at constant 2011 prices. They suffer from low investment, unhurried growth in the secondary sector of the economy, limited industrial diversification and poor labor market conditions and increasingly, aging populations.
From 1960 to 2010, only 15 out of 101 middle-income economies escaped the middle income trap, including Hong Kong, Taiwan, Singapore, South Korea and Japan.