The World Bank has released its flagship World Development Report 2024 on 1 August 2024.
Key highlights of report
- More than 100 nations, including India and China, face “serious obstacles” in their transition to high-income developed economies amid increasing chances of getting stuck in the so-called middle-income trap.
- Since 1990, only 34 middle-income nations were able to leap to the high-income category. The main challenge for a total of 108 middling countries is that traditional growth environments of connected trade and open economies no longer exist or are fast crumbling.
- Climate change is an additional hurdle because adaptation mechanisms will cost poor countries more than the rich.
- As countries grow wealthier, they usually hit a trap at about 10% of annual US GDP per person—the equivalent of $8,000 today. That’s in the middle of the range of what the World Bank classifies as middle-income countries.
- At the end of 2023, 108 countries were classified as middle-income, each with annual GDP per capita in the range of $1,136 to $13,845.
- If middle-income countries don’t change their economic models, then it will take China more than 10 years just to reach one-quarter of US income per capita, Indonesia 70 years, and India 75 years.
- India’s aim to become a developed nation by 2047 as a laudable goal.
