Developing Countries

Explanation of the term "Developing Country"

The definition of a developing (or developed) country is not always clear. Although the United Nations determines which countries are among the least developed countries, it has not itself adopted criteria for developing countries. Nevertheless, with the "Human Development Index," they provide an important underlying value. This index combines the framework conditions of daily life such as nutrition, medical care, education and income into a comparable index.

Probably the most widespread interpretation of the term "developing country" is that of the International Monetary Fund (IMF). Here, states are classified on the basis of three criteria:

• Average per capita income
• Diversification of export goods (some countries export a lot, but only a few different products. In some Gulf states in particular, well over half of all exports consist of crude oil products. If a country's economy is based on only one industrial sector, this is not a stable situation, according to the International Monetary Fund.)
• Degree of participation in the international financial system

A further classification, which is occasionally equated with a developing country, was created by the World Bank with a pure classification according to average annual income. These are the levels:

• Income below 995 US dollars: Low-income countries
• Income below 3,895 US dollars: Lower middle-income countries
• Income below 12,055 US dollars: Upper middle-income countries
• Income above 12,056 US dollars: High-income countries

Designation as Third World

Colloquially, developing countries are also referred to as "Third World" countries, especially in wealthy industrialized nations. In the countries concerned themselves, this classification is often considered defamatory. The content of this designation is also controversial, since the model of the three worlds was originally used to express political affiliation after the Cold War. The first world is represented by the NATO states, the second world includes the Eastern bloc states, and the third world includes all other states from a political point of view.

Key figures in comparison

(All figures weighted according to population share.)




* Aruba is not an independent and sovereign country, but Autonomous Territory within the Kingdom of the Netherlands. Further information on the definition of a country can be found in our article What is a country?