Low and Middle-Income Countries

Low and Middle-Income Countries (LMICs) are nations classified by the World Bank based on their Gross National Income (GNI) per capita. These countries play a crucial role in the global economy and development, representing about one-third of global GDP and serving as major engines of global growth.

Classification and Significance

As of 2024, the World Bank classifies countries into four income groups:

Low-income countries (LICs): GNI per capita of $1,135 or less
Lower-middle-income countries: GNI per capita between $1,136 and $4,465
Upper-middle-income countries: GNI per capita between $4,466 and $13,845
High-income countries: GNI per capita of $13,846 or more

LMICs encompass both lower-middle-income and upper-middle-income categories. They are home to 75% of the world's population and 62% of the world's poor.

Characteristics and Challenges

LMICs are diverse in terms of size, population, and income levels. Common characteristics include:

Lower levels of industrialization compared to high-income countries
Lower Human Development Index (HDI) scores
Challenges in providing essential services like water and electricity
Issues with corruption and governance in some cases

These countries face various challenges, particularly in healthcare and development:

Limited access to safe drinking water, sanitation, and hygiene
Higher levels of pollution
Greater prevalence of tropical and infectious diseases
Insufficient infrastructure

Some statistics

Population and Poverty

LMICs are home to 75% of the world's population.
They account for 62% of the world's poor.

Economic Significance

LMICs represent about one-third of global GDP.
They are considered major engines of global economic growth.

Classification Trends

In 1987, 30% of reporting countries were classified as low-income. By 2023, this proportion had decreased to just 12%.
The share of high-income countries increased from 25% in 1987 to 40% in 2023.

Regional Shifts

In South Asia, 100% of countries were classified as low-income in 1987. By 2023, this share had fallen dramatically to just 13%.
In Latin America and the Caribbean, the proportion of high-income countries increased from 9% in 1987 to 44% in 2023.

Recent Changes

In 2022, about 80% of countries showed improvement in Atlas GNI per capita compared to the pre-pandemic period (2019).
Several countries moved to higher income categories in 2022, including Guyana and American Samoa (to high-income), and El Salvador, Indonesia, and West Bank and Gaza (to upper-middle income).

Conclusion

LMICs face complex challenges across multiple sectors, from agriculture and social protection to digital development and healthcare. However, these challenges also present opportunities for innovation and growth. By focusing on sustainable agricultural practices, effective social protection programs, and inclusive digital development, LMICs can work towards reducing poverty, improving living standards, and contributing to global economic growth. International organizations and initiatives continue to support LMICs in addressing these challenges and promoting sustainable development.

Citations:

This page is also known as:

LMICs

LMIC