Kuala Lampur, Aug. 30 -- The spectre of the "middle-income trap" haunts many nations.

Having clawed their way out of poverty through grit and low-cost manufacturing, they find progress stalling.

Wages rise, eroding their competitive edge against poorer rivals, yet they lack the advanced technology and productivity to compete with wealthier nations. It's an economic purgatory.

The diagnoses often point to two critical flaws: over-dependence on cheap labour and chronically low investment in innovation. Malaysia is among many.

Having examined the evidence, the arguments are not only persuasive but fundamental to understanding - and eventually escaping - this trap.

Relying primarily on low wages is a strategy with an expiration date.

As...