Question

Mention the classification done by the World Bank.

Answer 1

• The Atlas technique is used consistently by the World Bank to categorise nations according to GNI per capita. The classification, which is revised every year, separates economies into four groups (particular thresholds may vary, but 2023 data is used for illustration):
  1. Low-income economies: GNI of $1,135 or less per person. Ethiopia and Afghanistan are two instances where access to essential services is hampered by low income.
  2. Lower-middle-income economies: $1,136 to \$4,465 GNI per capita. This category includes nations like Nigeria and India, which have intermediate levels of growth but still face issues like poverty.
  3. Upper-middle-income economies: GNI per person ranges from $4,466 to \$13,845. China and Brazil are two examples of countries with superior infrastructure but problems with inequality.
  4. High-income economies: GNI per capita above $13,845. With their sophisticated economies and excellent standards of living, nations like the United States and Japan belong here.
• Policymakers and international organisations can customise development initiatives with the aid of this classification. For example, while middle-income countries concentrate on sustainable growth, low-income countries can receive aid.
• However, income alone has limitations. It does not capture non-monetary aspects like health, education, or environmental sustainability. For example, a country with high income but poor healthcare access may rank lower in human development indices. Thus, income is best used alongside other metrics like the Human Development Index (HDI).