Developing countries still exist. But the World Bank will no longer call them that
The World Bank has abolished the developing world.
One of the three key features of its 2016 World Development Indicators is its refusal to make a distinction between developing and developed countries. Previously, it defined the developing world as made up by low- and middle-income countries. Developed countries were high-income.
The WB announced the change by referring to a blog published in November by Tariq Khokhar and Umar Serajuddin. It asked the question: “Should we continue to use the term ‘developing world?” And it set out its stall by declaring that categorization “is an art, not a science” and that classification schemes may be convenient for analysis and communication but each of these “comes with a set of limitations, biases and cultural overtones.”
Mr Khokhar and Mr Serajuddin make a case for “a more granular definition” of low-and middle-income countries that fare relatively and similarly poorly in social and economic measures.
They offered as a telling example the relationship between fertility rates and infant mortality rates. Both are often considered proxies for a country’s overall wellbeing, they say, and in 1960 there were two broad groups of countries in the world — those with low levels of fertility and infant mortality (“developed”), and those with high fertility rates and infant mortality (“developing”).
By 2013, however, the world map of development indicators had “changed dramatically”, they say. “It’s still possible to distinguish a few countries, but in most of the world, we see both low infant mortality and fertility rates.”
They also point out the inexactitude of lumping Malawi (GNI per capita of $250) in the same group as Mexico (GNI per capita of $9,860) together as the developing world. Malawi’s extreme poverty rate using the $1.90/day line is 70.9 per cent, while Mexico’s is 2.68 percent.
Ergo, what’s the point of the intellectually lazy omnibus term ‘developing world’?
The argument is that the UN’s Sustainable Development Goals set certain targets for all groups of individuals across the world. In that sense, it seems to me, that the whole world is developing and hoping to get to an ideal place.
Of course, the World Bank’s new categorization (or lack of) doesn’t mean that the low-and-middle-income country’s particular set of problems simply vanish along with the term “developing world”.
It’s important to note that different pillars of the international architecture of economics and decision-making have different ways of noting the difference between rich and poor countries.
In its World Economic Outlook, the International Monetary Fund classifies 37 countries as “advanced economies”. All others are considered “emerging market and developing economies”. The IMF says that this distinction is not based on strict criteria, economic or otherwise.
The UNDP’s Human Development Index classifies countries into Very high, High, Medium and Low levels of human development, using indicators related to income, education and health.
The United Nations does not formally define developing countries but puts 159 in that category. Right now, all of Europe, northern America, Japan, Australia and New Zealand are classified as developed regions. All other regions are developing. The UN also has a list of Least Developed Countries and these use measures of Gross National Income per capita and economic vulnerability.
The point is that “developing world” may no longer be a one-size-fits-all term for poor countries, which is to say a country that’s poor in terms of income and the provision of goods, services and opportunity for its citizens. A poor country would still be one who’s citizens are ill-served in terms of rule of law, in government accountability, the very quality of life.
Removing a category doesn’t abolish the development deficit. It just means that countries have a sui generis development deficit.
Originally published at www.rashmee.com on May 24, 2016.