India will take 75 years to reach one-fourth of US per capita income, claims World Bank

According to the World Bank's 'World Development Report 2024: The Middle Income Trap', it will take more than 10 years for China to reach one-fourth of US per capita income. It will take Indonesia about 70 years to achieve this feat.

A World Bank report says that more than 100 countries, including India, will face serious obstacles in becoming a high-income country in the next few decades. According to this report, it may take about 75 years for India to reach only a quarter of US per capita income.

According to the World Development Report 2024: The Middle Income Trap, China will take more than 10 years to reach one-fourth of the US per capita income, while Indonesia will take nearly 70 years to achieve the feat.

Based on the last 50 years of experience, the report says that as countries get richer, they typically fall into a 'trap' at around 10 percent of US GDP per capita annually, which is currently equivalent to about $8,000. This is right in the middle of the amount by which the World Bank classifies middle-income countries.

At the end of 2023, 108 countries were classified as middle-income, with annual GDP (gross domestic product) between US$1,136 and US$13,845 per capita. These countries are home to six billion people - 75 percent of the global population - and two out of every three people in these countries live in extreme poverty.

The road ahead is fraught with even more daunting challenges than a rapidly growing population and rising debt, fierce geopolitical and trade frictions, and the increasing difficulty of accelerating economic progress without harming the environment, the report said.

Yet many middle-income countries still use a playbook from the last century, relying mainly on policies designed to expand investment. It's like putting a car in first gear and trying to accelerate it, the report said.

If they stick with the old playbook, most developing countries will lose ground in the race to build reasonably prosperous societies by the middle of this century, said Indermit Gill, World Bank Group chief economist and senior vice president for development economics.

"At current trends, it will take China more than 10 years to reach just a quarter of US per capita income, Indonesia nearly 70 years, and India nearly 75 years to achieve the feat," the report said. Gill also said that the battle for global economic prosperity will be largely won or lost in middle-income countries.

The report proposes a strategy for countries to reach high-income status. Depending on their stage of development, all countries need to adopt a sequence and progressively more sophisticated mix of policies. According to the World Bank report, since 1990, only 34 middle-income economies have managed to move themselves to high-income status—and more than a third of them had either benefited from joining the European Union or had reserves of crude oil.