Low-income country

Definition/short description

Low-income country is classified by the world bank in terms of countries with a GNP (Gross National Product) per capita income of $975 or less in 2008.

In depth

The world bank’s systematic income categories low, middle, high income are based on the bank’s operational lending categories civil works preferences, IDA eligibility etc. These operational guidelines was made based on the view that poorer countries deserve better provisions from the bank, so comparative estimates of economic capacity needed to be created. GNI per capita is the main criteria for categorizing countries.

Based on the Bank’s annual availability of resources the original per capita income thresholds were instituted. This threshold is updated every year to include the effect of international inflation, which is measured by the average inflation of the United Kingdom, the United States, European Union and Japan.

The economies of the countries whose per capita Gross National Income falls lower than the Bank’s operational cutoff for “civil works preferences” are categorized as low-income countries. For countries whose economies per capita are higher than the Bank’s operational thresholds for “civil works preferences” and also lower than the thresholds for the 17 years IBRD (International Bank for Reconstruction and Development) loans are categorized as lower-middle income countries.

The countries where the world’s poorest people live present a special challenge for the World Bank and their two pillar strategy in low-income countries. The investment growth in these countries may not be contributing to sustainable development growth. For example; limited institutional, human and physical resources can prevent people from engaging in the development process.

In the World Bank’s support to maintain low-income countries it developed a PRSP system. PRSP's are intended to serve as the structure for domestic policies and cross-sectoral programs to decrease poverty and for development aid. The process accentuates country ownership in forming plans that reflect each country’s traditions and needs.

A list of all Low-Income Countries:

Afghanistan, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Congo, Dem. Rep., Cote d'Ivoire, Eritrea, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Haiti

More at: [1]

The relevance of Low-income country for Migration and/or Migration Policy

Migration has attracted many people living in low-income countries to crossing borders to raise their standard of living. This helps to boost world incomes by giving opportunity to workers to move to a higher income country where then can be more productive in their skilled field. In the long term effect this can lead to Overpopulation and Unemployment in the more developed countries which also causes the low-income countries to have less skilled people. By people migrating from a low-income country to a higher income country they leave family members behind and this often causes inequalities among them. For example; family members remaining in the low-income country become dependent on the allowance which the family members from abroad send to them and this can cause a strain in the family when there isn't enough to share with everyone.

Examples

'Example: Low-Income Countries face long recovery--Serious Challenges' "While the global economy is showing tentative signs of recovery, 43 low-income countries are still suffering the consequences of the global recession, which highlights the need to increase support to the poorest countries dealing with economic instability and crisis. In a paper prepared for the G-20 meeting, the World Bank said that as a result of the crisis 89 million more people will be living on extreme poverty on less then USD 1.25 per day by the end of year 2010." Further reading World Bank

Example: ...replace this with your own title... ...replace this with your own example description...

Sources, further reading, links

• Low-income Country crisis
• Country Classification
• IBRD
• Author, source 3 book title, edition, publisher, year, ISBN

Related Educational Pages

• IPMProject1