How are countries classified?
Countries can be classified as high-income countries (HICs), low-income countries (LICs) and newly emerging economies (NEEs).
A country’s level of development is how far it has grown economically, technologically and the quality of life people typically have.
Economic factors include income (how much money people earn), how secure people’s jobs are and standard of living (housing, personal mobility). It also includes physical factors such as diet, nutrition, fresh water supply, climate, environmental quality and hazards.
In terms of quality of life, we consider family/friends, education and health. Also included in this is psychological factors such as people’s level of happiness, security and freedom.
Gross national income (GNI) is a common way of calculating a country’s level of development. GNI shows the average wealth of the citizens of a country. GNI allows comparisons to be made between countries. To calculate GNI you add together the total value of all the goods and services produced by the people within the country to the income earned from investments that its businesses and people have made in other countries.
As countries have different population sizes a further calculation needs to be made in order to make comparisons. This involves dividing the GNI by the population of the country to arrive at the GNI per capita. Then the value is converted into US dollars to allow comparisons to be made between countries. Finally, each figure must be adjusted based on its income. In low-income countries (LICs) goods and services often cost less than in high-income countries (HICs).
Based on GNI countries are classified into three main groups. These are high-income (developed) countries, newly emerging economies (emerging) and low-income countries (developing).
As of 1 July 2016, low-income economies are defined by the World Bank as those with a GNI per capita of $1,025 or less in 2015. There are 31 countries classified as LICs. These are shown below.
High-income economies are those with a GNI per capita of $12,476 or more. These are shown below. 78 countries are considered as being HICs.
NEE countries are those in-between.
You can view countries by classification on the World Bank website.
Use the images below to explore related GeoTopics.