The document discusses definitions of developing countries and the World Bank's classification system. It notes that the World Bank ranks 208 economies based on their gross national income per capita into low-income, lower-middle-income, upper-middle-income, and high-income countries. It also describes the categories of International Development Association countries, blend countries, and IBRD loans. Additionally, it states that portraying developing countries requires examining eight components, including size, resources, industry structure, and independence. Common characteristics mentioned are low living standards, productivity, high population growth and dependence on agriculture and primary products.

1. National Bookstore Publishing 2010National Bookstore Publishing 2010
Understanding DevelopmentUnderstanding Development
amongamong
Developing CountriesDeveloping Countries
Chapter 2Chapter 2

2.  The most common way to define the developingThe most common way to define the developing
world is byworld is by per capita incomeper capita income..
 Several international agencies, including the
Organization for Economic Cooperation and
Development (OECD) and the United Nations
offer classifications of countries by economic
status.
 But the best-known system is that of the
International Bank for Reconstruction and
Development (IBRD), more commonly known
as World Bank.
Defining the Developing WorldDefining the Developing World

3. In the World Bank’s classification system, 208In the World Bank’s classification system, 208
economies with a population of at least 30,000economies with a population of at least 30,000
are ranked by their levels of gross nationalare ranked by their levels of gross national
income (GNI). These economies are classifiedincome (GNI). These economies are classified
as:as:
 Low-income countries (LIC) - $1,035 or less
 Lower-middle-income countries (LMC) - $1,036–4,085
 Upper-middle-income countries (UMC) - $4,086–12,615
 High-income countries - $12,616 or more
 Other high income countries
World Bank’s Classification SystemWorld Bank’s Classification System

4.  International Development Association (IDA) countriesInternational Development Association (IDA) countries
are those that had a per capita income in 2012 of lessare those that had a per capita income in 2012 of less
than $1,205 and lack the financial ability to borrowthan $1,205 and lack the financial ability to borrow
from IBRD.from IBRD.
 IDA loans are deeply concessional—interest-freeIDA loans are deeply concessional—interest-free
loans and grants for programs aimed at boostingloans and grants for programs aimed at boosting
economic growth and improving living conditions.economic growth and improving living conditions.
 IBRD loans are noncessional.IBRD loans are noncessional.
 Blend countries are eligible for IDA loans because ofBlend countries are eligible for IDA loans because of
their low per capita incomes but are also eligible fortheir low per capita incomes but are also eligible for
IBRD loans because they are financially creditworthy.IBRD loans because they are financially creditworthy.
Lending CategoryLending Category

5.  International Development Association (IDA) countriesInternational Development Association (IDA) countries
are those that had a per capita income in 2012 of lessare those that had a per capita income in 2012 of less
than $1,205 and lack the financial ability to borrowthan $1,205 and lack the financial ability to borrow
from IBRD.from IBRD.
 IDA loans are deeply concessional—interest-freeIDA loans are deeply concessional—interest-free
loans and grants for programs aimed at boostingloans and grants for programs aimed at boosting
economic growth and improving living conditions.economic growth and improving living conditions.
 IBRD loans are noncessional.IBRD loans are noncessional.
 Blend countries are eligible for IDA loans because ofBlend countries are eligible for IDA loans because of
their low per capita incomes but are also eligible fortheir low per capita incomes but are also eligible for
IBRD loans because they are financially creditworthy.IBRD loans because they are financially creditworthy.
Lending CategoryLending Category

6. Any portrayal of the structural diversity of developingAny portrayal of the structural diversity of developing
nations requires an examination of eight criticalnations requires an examination of eight critical
components:components:
1. The size of the country (geographic area,
population, and income)
2. Its historical and colonial background
3. Its endowments of physical and human resources
4. Its ethnic and religious composition
The Structural Diversity ofThe Structural Diversity of
Developing EconomiesDeveloping Economies

7. Any portrayal of the structural diversity of developingAny portrayal of the structural diversity of developing
nations requires an examination of eight criticalnations requires an examination of eight critical
components:components:
4. The relative importance of its public and private
sectors and civil society
5. The nature of its industrial structure
6. Its degree of independence on external economic and
political forces
7. The distribution of power in the nation, its social and
political structures, and the underlying institutions or
economic “rules of the game”.
The Structural Diversity ofThe Structural Diversity of
Developing EconomiesDeveloping Economies

8. 1.1. Low levels of living (characterized by low incomes,Low levels of living (characterized by low incomes,
inequality, poor health, and inadequate educationinequality, poor health, and inadequate education
2. Low levels of productivity
3. High rates of population growth and dependency
burdens
4. Substantial dependence on agricultural production
and primary-product imports
5. Prevalence of imperfect markets and limited
information
6. Dominance, dependence, and vulnerability in
international relations
Common Characteristics ofCommon Characteristics of
Developing NationsDeveloping Nations