Developing Countries Overview
Definition and Characteristics
Developing countries aren’t just part of an old-school classification from the 60s—they’re defined by a mix of economic, social, and political vibes. This labeling helps get the conversation rolling between wealthier nations and those needing a hand (A4ID). Most of the globe falls under the developing banner, while a smaller slice sits in the developed category.
In a nutshell, developing countries usually have:
- A lower GDP per person.
- More folks living in poverty.
- Not much industrial action going on.
- Difficulty getting good education and healthcare.
- Lots of babies being born and folks needing care.
- Big targets on their backs for economic and environmental upset.
| Indicator | Developing Countries | Developed Countries |
|---|---|---|
| GDP Per Capita | Lower | Higher |
| Poverty Levels | Higher | Lower |
| Industrialization | Limited | Advanced |
| Healthcare Access | Limited | Comprehensive |
| Population Growth | High | Low |
For more on who’s rich and who’s reaching, check out our list of country’s economic status.
Importance of Development
Why is development a big deal? Well, it’s about making life better, dropping poverty rates, and growing economies in a smart way. Lots of experts say that smart trading is at the heart of moving things forward (WTO).
Focus areas for boosting development include:
- Economic Growth: Pumping up GDP and adding new jobs to the mix.
- Poverty Reduction: Putting safety nets in place and making sure everyone’s part of the plan.
- Education: Opening doors to schools to grow brainpower.
- Healthcare: Bolstering medical systems for a fit and ready workforce.
- Infrastructure: Building solid roads, reliable power, and clear communication paths.
- Trade: Playing fair on the world stage and ensuring market reach.
Global support through aid and initiatives like the EU’s ‘Everything But Arms’ (EBA) helps push development forward. But, it’s not all smooth sailing. There’s a real worry about losing market access, especially where price counts, like in the clothing game.
For a thorough breakdown of where countries stand, have a glance at our resources on list of countries by GDP, list of african countries, and list of asian countries.
Categories of Developing Countries
Grasping how countries are labeled as developing can shine a spotlight on their economic challenges and the help they need. Big organizations like the World Trade Organization (WTO), the European Union (EU), and the United Nations (UN) have come up with ways to lend a hand.
World Trade Organization Classification
The WTO notes that many of their members—over three-quarters, actually—fall into the developing and least-developed categories. Every country looking to join them is in the developing bracket (WTO). They got some tricks up their sleeve to help these nations, like:
- Extra Time to Adjust: Developing countries are granted more time for putting WTO rules into action.
- Better Trade Deals: Creating more opportunities to trade.
- Back-Up for Infrastructure: Helping with the construction of important trade facilities.
European Union Programs
The EU has an assortment of plans to lend a hand to developing countries, mainly via trade deals and the Generalised Scheme of Preferences (GSP).
- Generalised Scheme of Preferences (GSP):
- Kicked off in January 2014 to support crucial sectors in developing nations. (EU Trade Policy)
- Economic Partnership Agreements (EPAs):
- Deals made with countries in Africa, the Caribbean, Pacific regions, Asia, Latin America, Europe’s eastern neighbors, and the Southern Med. These deals make getting into EU markets easier.
| Region | Number of EPAs |
|---|---|
| Africa | 6 |
| Caribbean | 1 |
| Pacific | 1 |
| Asia and Latin America | Scattered |
| Eastern Neighborhood & Southern Mediterranean | Scattered |
- Helping Hand and Know-How:
- The EU dishes out aid and helps build skills to get these countries playing ball in international trade.
United Nations Least Developed Countries List
The UN tags countries facing the toughest challenges as “Least Developed Countries” (LDCs). There are 44 such countries listed (UNCTAD). Here’s what they get:
- Special Market Access: LDCs enjoy special windows to the global markets.
- Financial Support: They receive different kinds of funding.
- Tech Support and Skill Building: LDCs get help, especially in tech fields.
Why They Make the Cut:
- Low average income.
- Weakness in human development areas.
- High economic risks.
LDCs List Breakdown:
| Continent | Number of LDCs |
|---|---|
| Africa | 33 |
| Asia | 9 |
| Caribbean | 1 |
| Pacific | 1 |
If you’re curious for a deeper look at these classifications, check out the list of countries by economic status or the list of African countries, list of Asian countries, or list of Caribbean countries.
Understanding how developing countries are categorized offers a clearer view of their situations and the special treatment they get from the big international players.
Challenges Faced by Developing Countries
Life can be a bit of a rollercoaster for developing countries. Let’s chat about why it’s not all sunshine and rainbows over there.
Economic Growth
In the Least Developed Countries (LDCs), things have been creeping along rather slowly in the money-making department. Their average growth stumbled to 4.7% between 2011 and 2019. This isn’t nearly as snappy as the 6.6% they were clocking in during the heady days of 2001 to 2010 (World Institute for Development Economics Research). It’s like they’re stuck on a treadmill while others are sprinting ahead, especially their pals in North and South-East Asia.
| Period | Average Growth in Money (%) |
|---|---|
| 2001–2010 | 6.6 |
| 2011–2019 | 4.7 |
Export Diversification
When it comes to exports, some developing nations are putting all their eggs in one or two baskets. That means if one of those baskets drops, they could really be in trouble. They depend heavily on a couple of main products, so if competitor countries start making the same stuff, they might find themselves in a sticky situation (World Institute for Development Economics Research). For more on the pros and cons of putting all your eggs in those baskets, see our list of countries by GDP write-up.
Climate Change Vulnerability
Mother Nature isn’t being too kind to some of these countries either. Take Myanmar—it’s right up there with the most climate-battered places on Earth. Then you have the Pacific Islands LDCs dealing with waves literally knocking at their doors (World Institute for Development Economics Research). Weather woes can mess with farming, displace folks, and sap already-stretched resources.
Impact of Market Access Loss
Imagine having a sweet deal to sell your goods at lower tariffs, and then—bam—it’s gone. That’s what some countries face with things like the EU’s ‘Everything But Arms’ (EBA) clause. Tariffs could go up, which is a bad look, particularly for cheap items like apparel. For a deep dive into these tricky waters, check out our list of third world countries guide.
These challenges are just the tip of the iceberg for developing nations, making it tough for them to hit that next level of growth. If you’ve got a thirst for more global insights, our list of developed countries and list of communist countries articles are just a click away.
Graduation from Developing Country Status
Becoming a bit less of a struggling nation is a big deal for any country. Here, let’s talk about what a country needs to do to shake off that ‘Least Developed’ tag, who’s on the path to doing it, and what happens when they get there.
Requirements for Graduation
To jump out of the Least Developed Countries (LDCs) club, a country has to hit certain targets, not once, but twice (they check every three years). Here’s what they look at:
- Gross National Income (GNI) per person: Think of it as the country’s paycheck divided by everyone.
- Human Assets Index (HAI): It’s like a report card for how well-fed, healthy, schooled, and literate the folks are.
- Economic Vulnerability Index (EVI): A measure of how much nature and trade storms rock the boat.
The United Nations Conference on Trade and Development (UNCTAD) keeps tabs on this list of countries every three years.
Countries Scheduled for Graduation
Here’s a sneak peek at who’s ready to pop the proverbial champagne in the coming years:
| Country | Expected Graduation Year |
|---|---|
| Bangladesh | 2026 |
| Lao PDR | 2026 |
| Nepal | 2026 |
| Solomon Islands | 2027 |
| Rwanda | Seeing how things look in 2027 |
| Uganda | Same for them in 2027 |
| Tanzania | Waiting for a nod in 2027 |
Source: UNCTAD
Impact of Graduation
Kicking that ‘LDC’ label to the curb changes a few things:
- Economic Benefits: Countries might find it easier to borrow money and could even get some good street cred.
- Market Access: The downside? They could miss out on special treatment for exports, making trade a tad trickier.
- Aid and Assistance: Help aimed at LDCs, like grants, might dry up a bit. But don’t worry too much—sometimes there are safety nets during the transition.
Understanding these changes is key for countries finding their footing as they step onto the world stage. If you’re the curious type, check out more on our list of third world countries and list of developed countries.
Developing Countries vs. Developed Countries
Criteria for Classifying Countries
Back in the 1960s, the world decided to start sorting countries into the ‘developing’ or ‘developed’ bins. This handy labeling helped spark discussions on how to channel resources from affluent countries to those less prosperous. These days, 80 to 85% of the globe’s nations fall into the developing category, while the rest are tagged as developed.
World Bank and IMF’s Take
World Bank Approach
The World Bank has its clever way of figuring out where countries stand by checking out each country’s gross national income (GNI) per person. They group economies like this:
- Low- and middle-income countries get dubbed as developing.
- Upper-middle and high-income ones are the developed bunch (A4ID).
| Income Level | Category | GNI per Capita |
|---|---|---|
| Low Income | Developing | $1,045 or less |
| Lower Middle Income | Developing | $1,046 – $4,095 |
| Upper Middle Income | Developing | $4,096 – $12,695 |
| High Income | Developed | $12,696 or more |
IMF’s Game Plan
The International Monetary Fund (IMF) has its own checklist. They snoop into three main areas: how much money people generally have, how diverse a country’s exports are, and how plugged they are into the global finance scene. They split countries into:
- Advanced Economies
- Emerging Markets and Developing Economies (A4ID)
| Category | Criteria |
|---|---|
| Advanced Economies | High income, diverse exports, fully in the global finance loop |
| Emerging Markets | Moderate to high income, some export variety, moderately connected |
| Developing Economies | Lower income, few export options, less global finance presence |
Who Gets Aid?
Where a country lands in these categories often decides its shot at getting international handouts. Developing countries usually get aid aimed at beefing up their economies, fixing up infrastructure, and making life a bit better for their folks.
- Developed Countries: Often not in line for aid meant for development because they’ve got their act together.
- Developing Countries: They get the spotlight when it comes to international aid and support from places like the World Bank and IMF.
If you’re itching for more deets on where countries stand economically, check out our list of third world countries and list of countries by GDP.
The classification systems of the World Bank and IMF shape how we view economic progress, impacting policy, aid, and global interaction. Dive deeper with our list of developed countries and list of economic statuses by country.