Homi Kharas

Homi Kharas is the economist in The giant factory town that might be a giant mistake who helped coin the term Middle-Income Trap with another World Bank economist. The episode uses his explanation to move from the specific Manaus case to the wider problem of countries that industrialize enough to become middle income but then stop converging with rich countries.

Kharas describes the old development path as infrastructure, schools, roads, simple manufacturing, rising skills, higher wages, and then more advanced production and services. His argument in the source is that this path produced some exceptional successes, such as South Korea / 韩国 and Singapore, but it does not give today’s middle-income countries a single reliable recipe.

Connections

• World Bank - institutional context for the middle-income-trap report.
• Middle-Income Trap - concept he helped name.
• Manaus, Brazil, and Zona Franca de Manaus - source case used to illustrate the trap.
• Premature Deindustrialization and Localized Innovation Advantage - related development paths discussed by the episode.