Context: 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.
World Development Report 2024
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.
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