Why Are Malaysia and Thailand Stuck in a Middle Income Trap ?

Both, Malaysia and Thailand were seen as part of East Asia's miracle growth economies in the early 1990s, rapidly moving into high-income status.
In fact. at one time they were even known as Asian Tigers…
However, since the mid-1990s, both countries have experienced a noticeable slowdown in growth.

Malaysia and Thailand were widely expected to make successful transitions to high-income status in the early 1990s. Both countries had among the highest growth rates in the world between the 1950s and the early 1990s, thanks to the rapid expansion of an export-oriented manufacturing sector.

However, when the Asian Financial Crisis (AFC) hit in 1996/1997, economic growth in these two countries, as well as other countries that had experienced rapid growth up to that point, like Indonesia and Korea, dropped significantly. The slowdown in growth that began in the mid-1990s was also accompanied by a decline in investment, stagnant manufacturing exports, and, in Malaysia's case, a slow rate of structural transformation.
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