By Rolph van der Hoeven1 International Institute of Social Studies at Erasmus University, The Hague & Member of the Committee for Development Policy of the United Nations
“You can check out any time you like but you can never leave… “
It is almost as if the lyrics of the world’s best rated song ‘Hotel California’ were written for the large category of middle-income countries (MICs) as since the classification was introduced in 1992 only four2 MICs outside Eastern and Western Europe (The Republic of Korea, Chile, Uruguay, and Argentina) have so far managed to ‘graduate’ to the high-income category. Are all other countries unable ‘to leave’?
To look into this, it is worth recalling that the middle-income country group is a vast one and spans countries with considerable differences in per capita income, growth rates and labour market experiences. MICs are therefore often subdivided into Lower and Higher Middle-Income country categories. To see how dynamics play out, it is therefore as important to look how countries develop within the large MIC grouping, as it is to look at the differences between those MICs that have graduated to the high-income category and those that have not.Continue reading