DEVELOPED COUNTRY GOALS

Context

What is a developed Country?

• Different global bodies and agencies classify countries differently.
• The World Economic Situation and Prospects of the United Nations classifies countries into three broad categories.

1. Developed Economies
2. Economics in Transition and
3. Developing economies.

• The idea is to reflect basic economic country conditions and the categories are not strictly aligned with the regional classifications.
• It is not as though all European Countries are "Developed" and all Asian ones are "Developing".

World Bank's Categorisation

• To categorise countries by economic conditions, the United Nations uses the World Bank's categorisation based on Gross National Income (GNI) per capita (in Current US dollars).
• But the UN's nomenclature of developed and developing is being used less and less and is often contested.
• Former US President Donald Trump criticised the categorisation of China as a developing country, which allowed it to enjoy some benefits in the World Trade Organization.
• If China is a developing country, then the US should also be made one.

Why is United Nations Classification Contested?

• It can be argued that the UN classification is not very accurate and has limited analytical value.
• Only the top three mentioned the US, the UK and Norway.
• There are 31 developed countries according to the UN in all.
• All the rest except 17 "economies in transition" are designated as "developing countries" even though in terms of proportion, China's per capita income is closer to Norway's than Somalia's.
• China's per capita income is 26 times that of Somalia's while Norway's is just about seven times that of China's.
• Then there are countries such as Ukraine, with a per capita GNI of $4,120 (a third of China's) that are designated as "economies in transition".

India's Stand

• India is currently far behind both the so-called developed countries, as well as some developing countries.
• Often, the discourse is on the absolute level of GDP (Gross Domestic Product).
• On that metric India is one of the biggest economies in the world even though the US and China remain far ahead.
• To be classified as a developed country, the average income of a country's people matters more.
• On per capita income, India is behind even Bangladesh.
• China's per capita income is 5.5 times that of India and the UK's is almost 33 times.
• The disparities in per capita income often show up in the overall quality of life in different countries.
• A Way to map this is to look at the scores of India and other countries on the Human Development Index (HDI), a composite index where the final value is reached by looking at three factors.

1. The health and longevity of citizens,
2. The quality of education they receive and 
3. Their standard of life.

• India has made a secular improvement on HDI metrics.
• For instance, the life expectancy at birth (one of the sub-metrics of HDI) in India has gone from around 40 years in 1947 to around 70 years now.
• India has also taken giant strides in education enrollment at all three levels primary, secondary and tertiary.

What is the distance left to cover?

• When compared to the developed countries or China, India has a fair distance to cover.
• A 2018 diagnostic report on India by the World Bank said that Even though India is the World's third-largest economy in purchasing power parity (PPP) terms, most Indians are still relatively poor compared to people in other middle-income and rich countries.
• Ten per cent of Indians, at most, have consumption levels above the commonly used threshold of $10 (PPP) per day expenditures for the global middle class.

Food share of Consumption

Can India achieve this by 2047?

• One way to make this assessment is to look at how long other countries took to get there.
• In per capita income terms, Norway was at India's current level 56 years ago in the year 1966.
• Comparing India to China is more useful.
• China reached that mark in 2007. Theoretically then, if India were to grow as fast as China did between 2007 and 2022, then, broadly speaking, it will take India another 15 years to be where China is now.
• But then, China's current per capita income was achieved by the developed countries several decades earlier, the UK in 1987, the US and Norway in 1979.
• India's current HDI score (0.64) is much lower than what any of the developed countries had even in 1980.
• China reached the 0.64 level in 2004 and took another 13 years to reach the 0.75 level.
• The level at which the UK was in 1980.
• The World Bank's 2018 report had made mentioned what India could achieve by 2047.
• On the Centenary of its independence at least half its citizens could join the ranks of the global middle class.
• By most definitions, this will mean that households have access to better education and health care, clean water, improved sanitation, reliable electricity, a safe environment, affordable housing and enough discretionary income to spend on leisure pursuits.
• It also laid out a precondition for this to happen: Fulfilling these aspirations requires income well above the extreme poverty line as well as vastly improved public service delivery.
• To see this in perspective, note that at the last count, as of 2013, India had 218 million people living in extreme poverty which made India home to the poorest people in the world.