What is development and how are countries classified?

Development is a process of change within countries and their societies. The world has become richer in the past 30 years but the gap between the richest and poorest countries has actually got bigger. Diffferent factors can affect a country’s level and speed of development:

  • environmental factors e.g. natural resources, natural hazards
  • economic factors e.g. trade, debt
  • social factors e.g. access to safe water, level of education
  • political factors e.g. government corruption, conflict

Classifying countries

The International Monetary Fund (IMF) classifies nations into three categories of development:

  • Advanced countries (ACs): these are the wealthiest countries with high GNI per capita and most people have high standard of living. The economy is based on tertiary and quaternary industry (e.g. service and research). ACs have a lot of money to spend on education, healthcare and transport so people are well-educated and high life expectancies. Examples of ACs are France, UK, USA, Canada.
  • Emerging developing countries (EDCs): these countries are in the process of getting richer as their economy is moving from being based on primary industry (e.g. farming) to secondary industry (manufacturing) and exports of manufactured goods are generally high. Exports and increasing wages mean that there’s an increasing amount of money to spend on development. This means that healthcare, education and transport are improving so the standard of living for many people is also improving. Examples of EDCs are China, Brazil, Russia and India.
  • Low-income developing countries (LIDCs): these are the poorest countries, GNI per capita is very low and most people have a low standard of living. Their economies are usually based on primary industries and they earn much from their exports. LIDCs don’t have the money to spend on development so their education, healthcare and transport systems are often poor. Examples are Afghanistan, Somalia, Mali and Nepal.

Countries are clsasified according to their wealth per person, trade and links with other nations. Only 16% of the world’s countries are classified as ACs, 45% are EDCs and 38% are LIDCs. LIDCs account for 20% of the world’s population but only have a tiny fraction of the wealth, with people living on between $370-$2500 per year.

IMF classification of countries