A country’s GNI per capita (the dollar value of a country’s final income in a year, divided by its population) tends to be linked with other indicators that measure the social, economic, and environmental well being of the country and its people and is a convenient way to divide countries into groups.
• This table shows the World Bank’s classification of countries by income group according to 2008 GNI per capita, calculated using the World Bank Atlas method.
The groups in this classification are:
• low income, $975 or less
• lower middle income, $976–3,855
• upper middle income, $3,856–11,905
• high income, $11,906 or more
Low-income and middle-income economies are sometimes referred to as developing economies. In this listing, “developing” does not imply that all economies in the group are experiencing similar development or that other economies have reached a preferred or final stage of development. Classification by income does not necessarily reflect development status.
• Although this is a useful way to classification countries, it is not the only way. One common way to group countries is by their development status – that is, advanced economies or emerging and developing economies. The International Monetary Fund (IMF), among other organizations, uses this system for classification.
• The term “Newly industrialized country” (NIC) is also useful and is applied to countries whose economies have not yet reached “advanced” or “developed” status but have outpaced their developing counterparts. These are countries that are experiencing industrialization and rapid economic growth, such as China, India, Brazil, Malaysia, Philippines and Thailand.
• The United Nations (UN) uses a classification system that includes geographic regions as well as such categories as least developed countries (such as Afghanistan, Malawi), landlocked developing countriessmall island developing states (e.g., Bahamas, Mauritius) and transition countries (e.g., Belarus, Croatia), developed regionsdeveloping regions (e.g., Botswana, Azerbaijan), (Japan, Northern America) and (Central America, Asia excluding Japan),
• One system that used to be popular but has fallen out of favor is to divide countries into First-World, Second-World, Third-World and Fourth-World countries. The system was based more on a country’s position in the hierarchy of global power than in its economic status (although the two were often related). First introduced by the United Nations, its use became widespread during the Cold War. This system usually grouped countries aligned with the United States and NATO into the First World, the Soviet Union and its allies into the Second World, and non-aligned countries into the Third World. The term Fourth World was sometimes used to refer to extremely poor nations, and at other times to mean marginal or “stateless” people such as aboriginal cultures within a nation.
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