Global Economic Prospects: Enabling Low-Income Countries to Thrive

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00:07 The good news is that the number of low income

00:09 countries has fallen significantly over the past 25 years.

00:14 In 2000,

00:15 there were 63 low income countries.

00:17 Since then,

00:18 39 economies,

00:20 including India,

00:21 Indonesia,

00:21 and Bangladesh,

00:22 have entered the ranks of middle income.

00:26 In the 2000s,

00:27 especially,

00:27 low income countries made rapid progress

00:30 against the backdrop of global reform momentum

00:33 and trade and financial integration.

00:36 However,

00:37 the prospects for today's 26 low income countries are less encouraging.

00:43 Economic progress has largely bypassed these countries.

00:47 As a group,

00:48 real per capita income has barely increased since 2000,

00:52 with their relative incomes falling further behind

00:56 other country groups.

00:58 Persistently weak growth has come along with mounting debt challenges,

01:03 a rising conflicts,

01:05 and stalling poverty reduction.

01:07 Out of these 26 low income countries,

01:10 22 of them are in sub-Saharan Africa.

01:13 And

01:13 17 of them are in

01:15 fragile and conflict afflicted situations.

01:18 Without sustained improvements,

01:20 only 6 low income countries appear on track

01:23 to reach middle income status

01:25 by

01:26 2050.

01:28 Yet

01:28 with the right domestic policies

01:30 and global support,

01:32 today's low income countries could chart a brighter path.

01:35 Their young populations are expanding rapidly.

01:38 Investing in the health and education of future

01:41 workers could lead to large demographic dividends.

01:45 With government's improvements,

01:47 their rich natural resources could also catalyze stronger growth.

01:51 Into the mix.

01:53 Improved stability and infrastructure could see

01:56 tourism take off in some countries,

01:59 while regional trade integration could deepen

02:01 their export potential.

02:03 What is the best reason to think today's

02:05 low income countries can turn things around?

02:08 Because it has happened before,

02:10 multiple times.

02:12 Take Nepal,

02:13 at the turn of the century,

02:14 it was in a bitter civil war.

02:17 A political process brought peace

02:19 by the late 2000s.

02:21 Thereafter,

02:22 Nepal delivered a sustained growth acceleration,

02:25 graduating the middle income category in 2019.

02:29 Or take Vietnam.

02:30 It started the century as one of the world's poorest countries,

02:33 but trade liberalization,

02:35 fiscal discipline,

02:36 and a sustained focus on education and infrastructure

02:39 have seen real per capita income double this century

02:43 as they take on their own unique challenges.

02:46 Today's low income countries can be inspired by these success stories.

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The good news is that the number of low income countries has fallen significantly over the past 25 years. In 2000, there were 63 low income countries. Since then, 39 economies, including India, Indonesia, and Bangladesh, have entered the ranks of middle income. In the 2000s, especially, low income countries made rapid progress against the backdrop of global reform momentum and trade and financial integration. However, the prospects for today's 26 low income countries are less encouraging. Economic progress has largely bypassed these countries. As a group, real per capita income has barely increased since 2000, with their relative incomes falling further behind other country groups. Persistently weak growth has come along with mounting debt challenges, a rising conflicts, and stalling poverty reduction. Out of these 26 low income countries, 22 of them are in sub-Saharan Africa. And 17 of them are in fragile and conflict afflicted situations. Without sustained improvements, only 6 low income countries appear on track to reach middle income status by 2050. Yet with the right domestic policies and global support, today's low income countries could chart a brighter path. Their young populations are expanding rapidly. Investing in the health and education of future workers could lead to large demographic dividends. With government's improvements, their rich natural resources could also catalyze stronger growth. Into the mix. Improved stability and infrastructure could see tourism take off in some countries, while regional trade integration could deepen their export potential. What is the best reason to think today's low income countries can turn things around? Because it has happened before, multiple times. Take Nepal, at the turn of the century, it was in a bitter civil war. A political process brought peace by the late 2000s. Thereafter, Nepal delivered a sustained growth acceleration, graduating the middle income category in 2019. Or take Vietnam. It started the century as one of the world's poorest countries, but trade liberalization, fiscal discipline, and a sustained focus on education and infrastructure have seen real per capita income double this century as they take on their own unique challenges. Today's low income countries can be inspired by these success stories.

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