Challenges to Achieving High-Income Status: World Bank Report

A World Bank report highlights that over 100 countries, including India, face significant challenges in becoming high-income nations. The report emphasizes the 'middle-income trap' and presents recommendations for transitioning to high-income status. Ageing populations, debt, and outdated policies are key obstacles for these countries.

A World Bank report has revealed that over 100 countries, among them India, are encountering severe hurdles in their quest to become high-income nations in the coming decades. The report suggests that New Delhi may take nearly 75 years to reach one-quarter of US income per capita.

According to the World Development Report 2024: The Middle Income Trap, China will need more than 10 years to achieve one-quarter of US income per capita while Indonesia might require nearly 70 years. The report draws on lessons from the past 50 years, showing that as nations grow wealthier, they often hit a 'trap' at about 10 percent of the US GDP per capita—equating to around $8,000 per year.

With 108 countries classified as middle-income by the end of 2023, which collectively house 75 percent of the global population, sizeable challenges like ageing populations, growing debts, geopolitical tensions, and the environmental costs of economic progress loom large. World Bank Chief Economist Indermit Gill emphasizes that the fight for global economic prosperity will be determined largely within these middle-income countries. The report proposes strategic policy mixes for these nations to overcome the trap and transition to high-income status.

(With inputs from agencies.)