By: Racheal Asamoah
The World Bank has launched its World Development Report 2024, highlighting the urgent challenge faced by middle-income countries as they risk falling into the “middle-income trap.”
Despite significant progress in reducing poverty since the 1990s, only 34 out of 108 middle-income nations have successfully transitioned to high-income status.
The report stresses that these countries must undergo two critical transitions to avoid stagnation.
First, they need to shift from an investment-led strategy to one that integrates technology infusion. Once established, innovation must be added to the mix to ensure sustained growth and progress.
The report outlines specific strategies for different income levels. Low-income countries should focus on improving investment climates, while lower-middle-income economies need to integrate global technologies and stimulate business competition.
Upper-middle-income countries are encouraged to prioritize innovation, strengthen capital markets, and protect intellectual property rights.
The World Bank calls on governments to foster economic freedom, reform institutions, and seize opportunities in times of crisis to push through difficult but necessary policy reforms.
These transitions, the report concludes, are vital for middle-income countries aiming to achieve high-income status in the coming decades.
