As the Cold War began to ratchet up tensions around the world, the French demographer Alfred Suvy reflected, in a widely read article published in 1952, on how one planet could be categorised into “three worlds”.
The so-called First World consisted mainly of the United States, Europe and their allies, the Second World of the Soviet Union and other Communist countries such as China and Cuba and the Third World of all countries that did not fall into the first two categories.
Gradually, however, the Third World label began to increasingly become synonymous with poverty and underdevelopment. Critics argued that these labels were flawed, confusing and insulting.
The labels were also imprecise as they did not consider the heterogeneity of the countries and the complexity of problems they faced. Moreover, how could one, for example, explain the low living standards and poverty afflicting certain groups in First World countries?
The Third World label, in particular, appeared to signify a sense of hopelessness. While the Second World, it appeared, could change their fortunes by embracing capitalism, the Third World appeared set for a long period of struggle.
Subsequently, more politically acceptable terms began to emerge, including “developing countries” and the “Global South”. But even these labels have had their flaws as some argue they imply a hierarchy of nations.
In more recent years, the World Bank has classified world economies into four income groups—high income, upper-middle income, lower-middle income and low-income countries. This classification is based on Gross National Income (GNI) per capita (current US$) estimates obtained from World Bank country units and updated each year on July 1.
Last week, Tanzania was classified as a lower middle income country on the basis of its recent economic performance. The country’s President, John Magufuli, was ecstatic. In a much shared message on Twitter, he congratulated his fellow citizens on this “historic achievement” and declared “we had envisaged to achieve this status by 2025 but, with strong determination, this has been possible in 2020”.
The credit worthiness of the country has now improved and it can more easily attract foreign investments. However, Tanzania will now also not be able to access certain forms of aid or concessional loans that are typically earmarked for low-income countries.
Labelling development continues to be a challenge With its focus on the income per capita criteria, the World Bank has been criticised by some for presenting a distorted picture of development.
Critics claim that these categories do not necessarily reflect real world situations and they ignore issues of inequality, social exclusion and state capacity to promote development.
However, income data remains easily available and the current labels offer, at least, a partial glimpse of how a country is doing in pursuit of development.