How 28 poor countries escaped the poverty trap

Poverty Matters Blog: How 28 poor countries escaped the poverty trap

Zambia and Ghana are the 27th and 28th countries the World Bank has reclassified as middle-income since the year 2000.

… The World Bank did its annual assessment of poor countries last week. Low-income countries are those with average gross national incomes (GNIs) of less than $1,005 per person per year.

And there are only 35 of them remaining out of the countries and economies that the World Bank tracks. That's down from 63 in 2000.

New middle-income countries this year include Ghana and Zambia. Lower middle-income countries are those with per capita GNIs of between $1,006 and $3,975 per year; while upper middle-income countries are those with per capita GNIs between $3,976 and $12,275.

The remaining 35 low-income countries have a combined population of about 800 million. Tanzania, Burma, the Democratic Republic of the Congo, Ethiopia and Bangladesh account for about half of that total, and there are about 350 million people living on under $1.25 a day in the remaining low-income countries. …

… What shall we take from this? Three things. First, consider the good news that there are fewer poor countries around. Not least, it suggests that public and private investment (including aid) can help even the poorest countries get rich(er). This is one more reason why optimism should come back into fashion.

Second, the World Bank country classifications – which are used to help determine types and levels of support provided by many aid agencies – may need a rethink. …

… Third, as countries develop their own resources, fighting poverty becomes increasingly about domestic politics. Not surprisingly, this means inequality is rising up the agenda. New research shows that the emerging middle classes may have a big role to play. Who they side with – the poorest or the economic elite – will determine what kind of development emerges in the new middle income countries.

In short, even the poorest countries can get richer – and that's a good news story.