Economic classification of developing nations

RAD-AID has adopted The World Bank criteria for measuring economic development. The World Bank classifies the economies of its 187 member countries into 4 groups based on Gross National Income (GNI) per capita calculated using the World Bank Atlas method. The Atlas conversion factor limits the impact of exchange rate fluctuations that can confound comparisons of national incomes. Every national economy is classified as low income, middle income (subdivided into lower middle and upper middle), or high income. Low and middle income groups are pooled and referred to as developing economies. Again, the term “developing” is in many ways euphemistic and does not take into account the sometimes vast differences in economic, infrastructure, and social development between different developing nations. RAD-AID uses the term as a useful way to focus our attention on nations outside of the high income group, frame discussion and start planning. When comparisons between nations are needed, we try to compare developing nations to peer nations within the same World Bank economic category.

GNI per capita-Atlas is reported in current US Dollars. The statistics are recalculated every year as are the criteria for the 4 groups. For 2009, the 4 income groups are depicted on the world map to the right. A quick survey of the map demonstrates the following:

1. Most low income nations are on the continent of Africa. The remaining low income nations are in Central and Southeast Asia.
2. Most South and Central American nations are in the upper middle income category.
3. China and India, the two most populous nations, are both in the lower middle income category.
4. If low and middle income nations are considered “developing”, then most of the world’s nations are developing countries.

NEXT TIME: Relationship between the economic development of nations and their public health.

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