The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus. Very few countries have succeeded in reaching advanced-country status in the last 25 years.1 The inability of many developing countries to make the leap to advanced-country status is known as the “middle-income trap”.2 This is because the economic model that enables low per capita income countries to become richer no longer applies when they need to move to the high-income level (Kharas, 2010). On the one hand, most middle-income countries face growing competition from low-wage countries in respect of low-tech standardised products.