WORLD
DEVELOPMENT REPORT 2024 - ECONOMY
News: The
World Bank has expressed concerns regarding the potential challenges faced by
108 countries, notably including India and China, in their journey toward
becoming high-income developed economies in its World Development Report
2024.
What’s
in the news?
World
Development Report 2024
- About: It
identifies what developing economies can do to avoid the “middle-income
trap.” Lower-middle-income countries must go beyond investment-driven
strategies.
- Focus:
On advancing technological innovation and reconfigure economic structures
to enhance economic freedom, social mobility, and political
contestability.
Key
Highlights of Report
o Wealth Trap Threshold:
The World Bank report identifies a “trap” occurring at about 10% of annual US
GDP per person, roughly $8,000 today, for countries growing wealthier.
o Middle-Income
Classification: This wealth trap is situated within the range that defines
“middle-income” countries according to the World Bank.
o Progress to High-Income
Status: Since 1990, only 34 middle-income economies have transitioned
to high-income status, with over a third benefiting from EU integration or
previously undiscovered oil.
o Challenges for Emerging
Economies: Without changing their economic models, the report forecasts
that China will take over 10 years to reach a quarter of US income per capita,
Indonesia 70 years, and India 75 years.
o India's Development Goal:
The report acknowledges India's target to become a developed nation by 2047 as
a commendable objective.
Recommendations
- 31 Strategy:
Prioritize initial investment, integrate new technologies, and balance
efforts across all three components of the 31 strategy for comprehensive
growth.
- Stimulate Business Dynamism:
Reward firms that add value to stimulate business innovation and deepen
capital markets.
- Promote Social Mobility:
Ensure equal opportunities for women, minorities, and disadvantaged
groups, with initiatives like removing barriers for women entrepreneurs
potentially increasing real income by 40%.
- Reflect Environmental Costs: Improve
economic efficiency by incorporating environmental costs into energy
pricing.