On 3 June 2026, CDRI hosted a dialogue on "The Middle-Income Trap: A Comparison of Cambodia and Pakistan," delivered by Dr Matthew McCartney, Chief Economist, and Dr Dina Chhorn, Centre Director of Development Economics and Trade.

The session brought together stakeholders from ministries and development partners to examine how two lower-middle-income economies — Cambodia and Pakistan — are navigating the structural challenge of sustaining economic growth, and what lessons each can draw from the other.

The presentation explored the structural factors shaping each country's growth trajectory, spanning human capital, investment, economic diversification, and productivity. While Cambodia has made significant strides in capital accumulation and labour force participation, the findings identified productivity growth and economic complexity as the critical frontier for its next phase of development. For Pakistan, the priorities remain foundational: macroeconomic stability, an improved investment climate, and broader access to education and the labour market.

The session reinforced that escaping the middle-income trap requires strategies grounded in each country's actual starting point — and the ambition to move deliberately toward where it needs to go.

Looking Ahead

The presentation concluded with an outlook on future research directions, including China's evolving role in the region, the implications of AI and re-shoring trends for manufacturing economies, and the need for deeper analysis of industrial policy at the firm level in Cambodia.

The discussion generated substantive dialogue among participants, reflecting the timeliness and policy relevance of the middle-income trap as a framework for understanding Cambodia's own development trajectory.