MICs and the future of
development cooperation
Jonathan Glennie
Senior research fellow
Seoul, 13-15 May 2013
1. The MIC category in a changing international
context
2. Implications for international development
cooperation: 2 scenarios
3
)
1. The MIC category in a
changing international
context
4
Human development and income/capita
(Hans Rosling)
5
Arbitrary (and stingy) cut-off points
Middle income countries
Low income
(LIC)
Lower middle
income (LMIC)
$1000 or $1000 less
$4000
6
Upper middle
income (UMIC)
High income
(HIC)
$4000 - $12500
$12500 or more
Countries graduating to MIC status since 2000
(There are now only about 30 LICs left)
7
Historically, progression has not been linear
LIC
LMIC
UMIC
HIC
LDC
World
8
1978
27
54
40
30
30
151
1990
48
50
35
44
43
177
2003
61
56
37
54
50
208
2012
36
54
54
70
48
213
Annual world GDP (PPP) growth rate
(3-year moving average)
9
The end of poverty?
(Source:
World Bank)
10
Where do poor people live?
(Sumner A, “Another bottom billion”, 2010)
11
Poverty is persistent in fragile states
(Kharas and Rogerson, “Horizon 2025”, 2012)
12
Aid from MICs is about $15bn and rising
(plus much non-monetised)
13
SSC and private funds are
complementing traditional “aid”
14
Post 2015 = Sustainable development
(Green D. From Poverty
to Power, Oxfam, 2012)
15
An expanding set of objectives
Already agreed goals
MDGs
Poverty
eradication
16
Climate
finance
Adaptation
and
mitigation
Possible future goals
SDGs
Broader
Equitable use
of natural
resources and
ecosystem
management
e.g. forests,
oceans
E.g.
technological
connectivity,
security
2. Implications for
development cooperation
17
Development cooperation
Financial and non-financial
Development cooperation
(broadly defined)
Financial
development
cooperation
Non-financial
development
cooperation
Bilateral
Multilateral
Private
18
Innovative
(Glennie J, “From Poverty
Eradication to Sustainable
Development”, 2012)
Recap
1. New context (power and poverty)
2. New actors/flows (public and private)
3. New challenges (planetary limits)
19
Scenario 1: Traditional view
Aid declines in the medium term
• Half of remaining LICs likely to “graduate” in next ten
years, leaving only fragile states (and making MIC
category even less useful)
• MICs will graduate from grants towards loans and
blended finance, private flows
• Normal trading relations emerge between countries
• Aid becomes history
20
Scenario 2: Challenging orthodoxy
A transformation in international public finance
• Orthodox definitions of poverty are narrow, the MIC category is
arbitrary; global inequalities are still vast; most poor people today
live in middle income countries
• International presence (incl. civil society) can prove crucial for
incentivising the kind of progress necessary in MICs
• Sustainable Development and Global Public Goods emerge as
the major framing theories of the 21st century – MICs need to
develop more sustainably = more expensive
• “Non-traditional” sources of development finance continue to
proliferate including: South-South Cooperation; Innovative sources
(taxes); Private funds
21
The vast majority of poor people continue to
live in Low Aid Countries
(Glennie J, What if ¾ of the world’s
poor live (and have always lived) in
Low Aid Countries”, 2012)
22
10 most poor-populous countries
23
Aid to MICs is likely to be
increasingly effective (VFM)
Need
LIC
LMIC
UMIC
(Glennie J, “The
role of aid to
MICs, 2011)
24
Effectiveness
A global public sector:
mutual benefit, mutual cost
25
Thanks for
listening.
odi.org.uk