World Bank Study: Over 100 Countries Face Challenges in Achieving High-Income Status
In a groundbreaking new study by the World Bank, it has been revealed that more than 100 countries, including economic powerhouses like China, India, Brazil, and South Africa, are struggling to achieve high-income status in the near future.
The Middle-Income Trap: A Roadmap for Developing Countries
The report, titled “The World Development Report 2024: The Middle Income Trap,” introduces a revolutionary “3i strategy” to help countries navigate their way out of the middle-income trap and reach high-income status.
Escaping the Trap
As countries become wealthier, they often hit a roadblock when their GDP per capita reaches around 10 percent of the annual US GDP per person, which is approximately $8,000 today. This stage, known as the middle-income trap, has proven to be a significant hurdle for many developing nations.
Global Economic Prosperity at Stake
Chief economist of the World Bank Group, Indermit Gill, warns that the battle for global economic prosperity will be decided in middle-income countries. With 108 nations falling into this category by the end of 2023, representing 75 percent of the global population, the stakes are high.
Challenges Ahead
These countries are facing a myriad of challenges, including aging populations, protectionism in advanced economies, and the urgent need for an energy transition. The traditional strategies of relying solely on investment or innovation are no longer sufficient.
A Fresh Approach
Gill emphasizes the need for a new approach that combines investment, infusion of new technologies, and innovation in a balanced manner. Success will depend on how well countries adapt to the changing global landscape and implement progressive policies.
Looking Towards the Future
Director of the 2024 World Development Report, Somik V. Lall, remains optimistic about the future, stating that progress is possible even in challenging conditions. Countries must be willing to undergo necessary reforms and embrace openness to achieve sustained growth and prosperity.