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ANNUAL PROGRAM
➜ Global Center for Economic Growth Inaugural Growth Academy
Middle-income countries—home today to 6 billion people—are in a race against time.
Many have set ambitious deadlines for themselves: reach high-income status within the next two or three decades. That will not be easy. Since the 1990s, only 34 middle-income economies have succeeded in that feat. The rest—108 at the end of 2023—have been stuck in “the middle-income trap. Since 1970, the median income per capita of middle-income countries has never risen above 10 percent of the US level.
Climbing to high-income status in today’s environment will be harder still—because of high debt and aging populations in developing countries and growing protectionism in advanced economies. World Development Report 2024 outlines how all developing economies can avoid the middle-income trap.
The “3i strategy”
Depending on their stage of development, countries need to adopt a sequenced and progressively more sophisticated mix of policies:
The handful of countries that have made speedy transitions from middle- to high-income status have done so by disciplining vested interests, building their talent pool, and modernizing policies and institutions. Today’s middle-income countries can do the same: