How to avoid economic stagnation after reaching middle-income status?

Answer

To avoid the **"Middle-Income Trap,"** a nation must transition from being a low-cost labor hub to a high-efficiency technology hub.

Munawar highlights the China playbook for escaping stagnation:

• Control the Foundations: Use state control over utilities (energy, internet, water) to keep the cost of doing business lower than in advanced peer nations.
• Invest in the Brains: Direct the resulting industrial wealth into education, AI, and strategic R&D.
• Build for Tomorrow: Economic stagnation is avoided when the nation's infrastructure is built not for where the country is, but for where it intends to be in 20 years.

Sustainable growth is the result of continuous **structural upgrading**—ensuring that the nation's physical assets are always a generation ahead of its current exports.