New World Bank Study: Identifying the World’s Poorest Countries Until 2050

A new economic analysis by the World Bank has indicated that the next 25 years may be critical in determining whether the 26 poorest countries in the world will advance to a middle-income status or remain stagnant.

These countries, where more than 40% of the population lives on less than $2.15 a day, are at the center of global efforts to eradicate extreme poverty. However, their progress has stalled amidst growing conflicts, frequent economic crises, and persistent weak growth.

Over the past 25 years, progress has largely bypassed these countries, according to the analysis, which will be included in the World Bank’s upcoming “Global Economic Outlook” report to be published on January 14, 2025.

At the beginning of the 21st century, the World Bank classified 63 countries as “low-income.” Since then, 39 countries—including India, Indonesia, and Bangladesh—have joined the ranks of middle-income countries, meaning their annual per capita income exceeded $1,145 by 2023.

The remaining countries, including South Sudan and Syria, which joined in the early 2000s, have seen their economies stagnate. On average, their per capita GDP, adjusted for inflation, has grown by less than 0.1% annually over the past 15 years. The analysis concludes that, without sustainable improvements in growth rates, only six of today’s low-income countries are likely to achieve middle-income status by 2050.

Indermit Gill, Senior Economist and Vice President for Development Economics at the World Bank Group, stated that the next 25 years represent a critical opportunity for these countries stuck at the bottom of poverty, and it is in the best interest of the rest of the world to help them break free from poverty.

Gill adds that today’s poorest countries face even more hardships than those faced by previous countries. Over the past 15 years, these countries have not experienced any growth in per capita income. However, the track record in East, Southeast, and South Asia shows that with some support and external assistance, as well as improvements in domestic policies, even war-torn and unstable countries can create the necessary conditions for sustained economic progress.

This World Bank analysis is the first systematic study of the progress made by the current low-income countries in the first 25 years of this century and their prospects for reaching middle-income status over the next 25 years.

The analysis concludes that today’s group—22 of them in Sub-Saharan Africa—faces greater constraints than those faced by their predecessors. Seventeen of them are suffering from conflicts or fragility, with death rates around twenty times higher than those in other developing economies. Almost all of them are clearly vulnerable to the effects of climate change.

Most of these countries either suffer from debt distress or are at high risk of it. Half of them are landlocked and surrounded by other poor countries, limiting their ability to boost growth through trade.

However, these countries possess significant natural advantages that could drive them to higher living standards. They hold over 60% and 50% of the world’s known cobalt and graphite reserves, respectively, and they possess some of the world’s largest known deposits of minerals and metals needed for generating and storing renewable energy, with among the highest solar energy potential globally. Additionally, their working-age populations—which are crucial for economic growth—are growing rapidly, even as other sectors stagnate.

Nepal is cited as an example of a low-income, landlocked country that succeeded in overcoming conflict to achieve middle-income status, as the World Bank analysis shows. At the start of the 21st century, Nepal was in the midst of a civil war. Its per capita income was just $220, making it one of the poorest countries at the time.

However, in 2006, a comprehensive peace agreement was reached, supported by the UN and various foreign governments. After that, per capita income increased more than fourfold, lifting Nepal to middle-income status by 2019.

Rwanda is another example of a low-income, landlocked country that overcame conflict to reach the brink of middle-income status. It took about seven years after the 1994 genocide against the Tutsi to establish the conditions for stability and economic growth, but once these were in place, Rwanda surged ahead with speed and stability.

In 2000, Rwanda’s per capita income was just $270, but today it is nearly four times that amount. Its growth resulted from ambitious political reforms aimed at stabilizing the economy, encouraging private enterprises, and building a large tourism industry. Debt relief programs and international aid also played a role, enabling Rwanda to invest more in education and healthcare.

Ayyhan Kos, Deputy Chief Economist at the World Bank Group, stated, “The global fight to end extreme poverty will not be won until it is won in the 26 poorest countries. Today, these countries do not receive the attention they deserve, given the scale of the challenges they face.

Many of them suffer from the triple burden of conflict, climate change, and debt distress. National policymakers and the global community must act urgently to enable these countries to achieve the progress necessary to join the ranks of middle-income countries.”

The analysis shows that, in order to ascend the income ladder over the next 25 years, low-income countries can draw inspiration from the experiences of poor countries that achieved middle-income status in previous decades.

With political stability and pro-growth policies, about half of these countries have achieved sustained economic growth, long periods of strong expansion, which helped them escape the low-income trap.

These growth periods were characterized by reforms that directed both public and private resources toward investment, improved the business environment, and encouraged trade and investment.