India may take nearly 75 years just to reach one-quarter of US income per capita, a World Bank report said
World Bank Report Highlights: Many Countries Face Challenges in Achieving High-Income Status
A recent World Bank report has revealed that more than 100 countries, including major economies like India and China, face significant hurdles in their quest to achieve high-income status. The “World Development Report 2024: The Middle Income Trap” highlights the difficulties that these nations will encounter in the coming decades as they strive to bridge the income gap with the United States.
India’s Economic Trajectory
According to the report, India is projected to take nearly 75 years to achieve one-quarter of the US income per capita. This forecast underscores the challenges the country faces in sustaining its rapid economic growth and translating it into higher per capita income levels. Key obstacles include the need for significant improvements in infrastructure, education, healthcare, and governance to support long-term growth.
India’s economic growth has been robust in recent years, driven by a young workforce, technological advancements, and increasing global integration. However, the report suggests that to overcome the middle-income trap, India must focus on enhancing productivity, increasing investment in human capital, and fostering innovation.
China’s Path to Prosperity
China, the world’s second-largest economy, is expected to take more than a decade to reach one-quarter of the US income per capita. Despite its rapid economic ascent and significant strides in reducing poverty, China faces its own set of challenges. These include transitioning to a consumption-driven economy, addressing environmental sustainability, and managing an aging population.
The report emphasizes the importance of structural reforms to maintain China’s growth momentum. These reforms include improving market efficiency, promoting competition, and fostering a more inclusive economic environment.
Indonesia and Other Developing Economies
Indonesia, another emerging economy, may take nearly 70 years to reach one-quarter of the US income per capita. The report highlights the need for Indonesia to diversify its economy, reduce reliance on commodity exports, and invest in education and infrastructure to accelerate growth.
Other countries facing similar challenges include Brazil, Mexico, and South Africa. These nations must address a range of issues, from political stability and governance to education and labor market reforms, to escape the middle-income trap.
Global Implications and Recommendations
The World Development Report 2024 underscores the global implications of these challenges, as many developing economies play a crucial role in the international economic landscape. The report calls for coordinated efforts to address structural weaknesses, promote sustainable development, and support inclusive growth.
To achieve high-income status, countries must prioritize innovation, technology adoption, and human capital development. The report also stresses the importance of sound macroeconomic policies, institutional reforms, and international cooperation in overcoming the middle-income trap.