Gross National Income Current Affairs - 2020

Nepal becomes Lower-Middle Income Economy while Sri Lanka slips to Lower-Middle Income Economy

As per the 2020-21 World Bank’s Country Classification based on Income level, Nepal’s economy has moved to a higher category to become a Lower-middle Income economy while Sri Lanka’s economy has moved to a lower category to become a Lower-middle Income economy.

Every year, the World Bank classifies countries into four income groups- (i) Low (ii) Lower-Middle (iii) Upper-Middle (iv) High Income. This classification of the economies of countries across the world is updated on the 1st of July every year by the World Bank. The classification of a country is done by using the Atlas Method by the World Bank. World Bank is using the Atlas Method since 1993 to estimate the size of an economy. Under the Atlas Method, Gross National Income (GNI) of a country is converted into the current U.S. Dollars.

As per the 2020 Classification, India remains a Lower-Middle Income country.

Nepal

2 years back, on 22nd May 2018, the Nepal Government announced that within the upcoming 10 years, its target will be to become a Lower-middle income country. Nepal achieved the target of becoming a Lower-Income country well ahead of its plans.

For becoming a Lower Middle-Income country, the World Bank has set the GNI per capita to be between USD 1036 to USD 4045. Nepal marginally crossed the line as its GNI in 2019 was USD 1090.

Sri Lanka

For becoming an Upper-Middle Income country, GNI per capita to be between USD 4046 to USD 12,535. Sri Lanka becomes a Lower-Middle Income country from an Upper-Middle Income country as its GNI per capita in 2019 was marginally short of the minimum of USD 4046 required to become an Upper Middle Income Country. USD 4020 was Sri Lanka’s GNI per capita in 2019.

India to host WTO Ministerial Meeting of Developing Countries

India will be hosting a World Trade Organisation (WTO) Ministerial meeting of developing countries in New Delhi on 13-14 May 2019. The aim is to discuss various challenges being faced by multilateral rules-based-trading system.

Key Highlights of Meeting

  • Participants: includes
  1. Six Least Developed Countries (LDC), namely Benin, Bangladesh, Central African Republic (CAR), Chad, Uganda, Malawi.
  2. Sixteen developing countries, namely Turkey, Indonesia, Malaysia, South Africa, Argentina, Brazil, Egypt, Guyana, Jamaica, Kazakhstan, Guatemala, Nigeria, Oman, China, Saudi Arabia, Barbados.
  3. Director-General (DG) of World Trade Organization (WTO), Roberto Azevêdo.
  • The two-day meeting will be an interaction between participants in order to provide an opportunity to Ministers to discuss various issues and the way forward.
  • Purpose: The meeting is an effort to bring developing countries and Least Developed Countries (LDCs) together on one platform and to share common concerns on various issues affecting WTO and also working together in addressing these issues.
  • Significance: The meeting is being held at a time when multilateral rules-based-trading system is facing serious challenges. In recent times, there has been an increase in unilateral measures and counter measures by member nations, further leading to deadlock in key areas of negotiations and stand-off in Appellate Body. This is threatening the very existence of Dispute Settlement Mechanism of WTO and impacting WTOs position as an effective multilateral organisation. This current scenario has given rise to demands from various quarters to reform the WTO.
  • Importance: Meeting will provide an opportunity to LDCs and developing countries to build consensus on how to move forward on WTO reforms, at the same time preserving fundamentals of multilateral trading system (MTS) enshrined in WTO.
  • The key discussions will also be about at getting a direction on how to constructively engage on various issues (both institutional and negotiating) in WTO, in the upcoming WTO’s Twelfth Ministerial Conference which will be held in Kazakhstan in June 2020.

About Least developed countries (LDCs)

  • They are low-income countries facing severe structural limitation to sustainable development. LDCs have low levels of human assets and are also, extremely vulnerable to economic and environmental shocks.
  • Currently there are 47 countries designated as LDCs by United Nations (UN). The LDC status is reviewed every three years by Committee for Development (CDP).
  • CDP uses three criteria to identify LDCs –
    1. Gross National Income (GNI) per capita
    2. Human Assets Index (HAI)
    3. Economic Vulnerability Index (EVI)