World Bank releases roadmap for emerging countries
The World Bank has presented a roadmap for emerging economies at risk of remaining stuck in their current stage. The aim is to show affected countries how to avoid the so-called middle-income trap and achieve high-income status, explained the multinational development bank based in Washington. More than 100 countries are now classified as middle-income.
The World Bank currently defines emerging economies as those with a gross domestic product per capita between $1,136 and $13,845. China, with $12,614 in 2021, still falls within this range, as do Brazil ($10,043) and India ($2,485). These roughly 100 countries combined represent more than 75% of the world's population.
"The battle for global economic prosperity" will largely be won or lost in these countries, said the chief economist of the World Bank Group, Indermit Gill. He called for a "new approach" to tackle this challenge.
According to the World Bank, emerging economies risk seeing their spending grow faster than their economic output, leading them to ultimately remain at the middle-income level - the so-called middle-income trap.
Gill emphasized the need for a balance between investments, innovations, and foreign technologies. Some countries try to skip the investment phase too early, while others miss this crucial step. It requires a balance between investments, innovations, and foreign technologies, explained the World Bank's chief economist.
The World Bank cited South Korea as an example of a country that escaped the middle-income trap and became a high-income country through this strategy. However, given demographic trends and rising ecological and geopolitical tensions, there is "no room for error" for the 100 countries.
Emerging economies, such as China, Brazil, and India, currently face the risk of experiencing a rise followed by a fall, known as the middle-income trap. To avoid this trap and achieve high-income status, a new approach is needed, as emphasized by the World Bank's chief economist, Indermit Gill.
