WORLD BANK FLAGS MIDDLE-INCOME TRAP THREAT FOR INDIA, CHINA, 108 OTHERS

Countries often hit the "middle-income trap" at around USD 8,000 GDP per capita, struggling with aging populations, rising protectionism, and the need for energy transition, requiring a balanced strategy of investment, technology infusion, and innovation to achieve high-income status.

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A new World Bank study reveals that more than 100 developing countries, including China, India, Brazil, and South Africa, face significant obstacles in their quest to achieve high-income status within the next few decades. The World Development Report 2024, which offers the first comprehensive roadmap for escaping the "middle-income trap," draws on 50 years of lessons to guide these nations.

According to the report, countries typically encounter this "trap" when their annual GDP per capita reaches approximately 10 percent of the US GDP per person-about USD 8,000 today. This level falls within the World Bank's classification of "middle-income" countries. Since 1990, only 34 middle-income economies have transitioned to high-income status, with over a third benefiting from European Union integration or previously undiscovered oil reserves.

As of the end of 2023, 108 countries were classified as middle-income, with annual GDP per capita ranging from USD 1,136 to USD 13,845. These nations collectively house six billion people-75 percent of the global population-and two-thirds of those living in extreme poverty. Despite their economic struggles, middle-income countries generate over 40 percent of global GDP and more than 60 percent of carbon emissions.