Confusion over this terminology has real-world consequencesby Jessica Abrahams / December 5, 2019 / Leave a comment
It is according to its status at the World Trade Organisation, which entitles the country to certain benefits in trade negotiations. Under pressure from the US, it announced in late October that it will no longer seek to make use of those benefits, though it declined to give up its developing country status, which at the WTO is self-defined. Other economic powers that still identify as developing, including China, are so far refusing to budge.
It might seem surprising that some of the richest countries in the world are still classified as developing. But then again, pinning down the details of this nebulous term can be a challenge. Although most intergovernmental organisations use it as an official classification, few define what it means. And without a clear definition, it is arguably a term that has outlived its purpose.
It might seem odd that the WTO relies on countries to self-designate. But the UN, which identifies 159 countries as developing, explains that “there is no established convention for [this] designation… in the United Nations system.” It is largely based on the regional designations adopted as part of the Millennium Development Goals in 2000, under which North America, Europe, Japan and Australia are considered “developed”—everyone else is developing.
With a focus on the economic elements of developments, the International Monetary Fund is the most specific, taking into account a country’s per capita income level, export diversification and degree of integration into the global financial system. But even then, it notes, its classification system “is not based on strict criteria, economic or otherwise” and offers only “a reasonably meaningful method of organising data.”
Part of the issue is that most of these classifications were set decades ago, and much about the world has changed. If these categorisations were ever fit for purpose, it is not clear that they still are.
First, the conditions of individual countries have changed. South Korea’s per capita income has doubled in real terms over the past two decades, far outpacing the global average. In the UN’s Human Development Index—which scores countries according to a range of indicators on wealth, health and education—it now ranks higher than France. Other countries have undergone similar…