What are Middle-Income Countries (MICs)
As of July 2017, middle-income countries (MICs) are nations with a per capita gross national income (GNI) between $1,005 and $12,235. MICs are one of the income categories that the World Bank uses to classify economies for operational and analytical purposes.
The World Bank has historically classified every economy as low, middle or high income. The World Bank further specifies its classes of countries, too, into low, lower-middle, upper-middle and high income economies.The World Bank uses GNI per capita as the basis for this classification because it views GNI as a broad measure that is considered to be the single best indicator of economic capacity and progress. The World Bank used to refer to low-income and middle-income economies as developing economies. In 2016, the World Bank chose to drop the term from its vocabulary, citing a lack of specificity in the term. Instead, the World Bank now refers to countries by their region, income and lending status.
BREAKING DOWN Middle-Income Countries (MICs)
MICs are broken up into lower-middle income and upper-middle income economies. Lower-middle income economies have per capita GNIs between $1,006 and $3,955, while upper-middle economies have per capita GNIs between $3,956 and $12,235. MICs are a very diverse group by region, size, population and income level, ranging from tiny nations with very small populations such as Belize and the Marshall Islands to all four of the BRIC giants – Brazil, Russia, India and China. China and India together hold nearly one-third of humanity and continue to be increasingly influential players in the global economy.
There are 53 lower-middle income economies, and 56 upper-middle economies. The diverse nature of these 109 MICs means that the challenges facing many of them are quite different. For nations in the lower-middle-income category, the biggest issue may be providing its citizens with essential services such as water and electricity. For the economies in the upper-middle-income category, the biggest challenges may be curbing corruption, improving governance, etc.
The Significance of Middle Income Countries
MICs are essential for continued global economic growth and stability. According to the World Bank, sustainable growth and development in MICs has positive spillovers to the rest of the world. Examples are poverty reduction, international financial stability and cross-border global issues including climate change, sustainable energy development, food and water security, and international trade.
MICs have a combined population of 5 billion, or over 70% of the world’s 7 billion people, and include 73% of the world’s poor. Representing about one-third of global GDP, MICs are a major engine of global economic growth.