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A Four-Tier World

from “Goodbye to the North-South gap: Hello to something worse” by James Wolfensohn

The first tier is comprised of the most affluent countries notably the United States, Europe, Australia and Japan whose combined populations of 979m have per capita gross national incomes (GNI) greater than 14,600 USD. These traditional powers exhibit the highest living standards, but as their share of global income decreases (from 90% in the mid-20th century to 80% in 2005), their dominance is contested by the emerging economies.

These emerging economies, comprising a second tier of about 30 poor and middle income nations with per capita GDP growth rates of over 3-5% and a total population of 3.2bn, are rapidly learning how to leverage the global economy. With sustained economic growth of 7% or more per year and at 3.22bn in 2006 around 50% of the world's population, countries like India and China will soon become de facto global leaders.

A third tier − a much larger number of national economies, more than 60 in all, with a combined population of 1.1bn − have experienced growth spurts, but also periods of decline or stagnation, especially once they hit middle income country status. From Latin America to the Middle East, these economies are neither poor enough to warrant special aid, nor sufficiently large and fast-growing to be major players in the global economy. Yet, close to a fifth of the people in the world live in them.

The fourth tier, comprising more than a billion people, represents the poorest countries per capita GNI less than 875 USD and GDP per capita growth rates of less than 3.5%, which continue to stagnate or decline. Mostly in sub-Saharan Africa, these countries gain little from globalisation but are among the most vulnerable to its adverse effects. The daily human suffering experienced by individuals in this vast group is a grave concern and represent probably the most important political, economic, and moral challenge for the rest of us.

This emerging world is a world of deep imbalances. While tier 1 nations continue to increase their wealth and living standards and tier 2 one are catching up, the majority of people in tiers 3 and 4 are either stagnating or falling behind. The ratio between tier 1 and tier 4 nations' per capita incomes has increased from 45 in 1965 to 78 in 2005. At the same time, the trend for tier 2 nations has been the reverse, as they have significantly reduced the per capita income gap with tier 1 nations during those years.

four_tier_world.txt · Last modified: 2015/02/13 19:39 by nik