29 March 2012

First There Was the Poverty Trap

...and now there is the middle-income trap. At least that is what the World Bank says in its China: 2030 report. The Economist explains that the chart, "plots each country’s income per person (adjusted for purchasing power) relative to that of America, both in 1960 and in 2008."  It notes that only 13 countries 'escaped' the middle-income trap to join above middle to high-income group. Presumably, Greece who is a part of the group in 2008 is likely back in the middle-income trap due to its financial state. I would be interested in seeing an update from 2008 given that the US is the peg. With the slowing US economy and the continued rapid growth of the BRICS, this chart could very well have some noteworthy shifts (of course that is pure conjecture as I have no data in front of me right now to make the comparisons).

China has made a relatively reasonable rise in the 4 decades. What stands out to me is that Brazil remains largely unmoved. Yet again, learning a new piece of info about Brazil has me interested in learning more about the nations growth, especially given that it will play host to the 2014 World Cup and the 2016 Olympics.

For good measure, here is outgoing World Bank President Robert Zoellick discussing the report. He raises some good concerns about the levels of poverty in China and what may eventually come if it is not adequately addressed.

Here is also the report for anyone interested.