The term “under-development” appeared after the Second World War in 1949, and was pronounced in public by former US president Georges Truman. He said:

 

 

 “We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. “

 

Who were these under-developed countries? Some associated them at the time to the “third world countries”, another very much discussed term. According to the inventor of the term Albert Sauvy in 1952, the “third world” was referring to these poor countries that “are ignored, exploited and despised, but want to be something”(1) . A review was created and named “La Revue Tiers Monde”, namely the Third World Review. It is edited by researchers from the IEDES (Institute of Economical and Social Development Studies), Paris and testifies to the evolution of the notion of development, observing the evolution of third world countries in their historical contexts, from decolonization matters to globalization and economic adjustments.

 

During the Cold War, the third world countries were associated to those which were part of the “Non-Aligned Movement”; a group of countries presenting themselves as counterpoise to the communist and capitalist opposing blocks. These nations gathered around elemental ideas such as peace and disarmament; self-determination, particularly for colonial peoples; economic equality and cultural equality.(2) However, this concept is now out to date, as it is no longer relevant to the reality of these countries’ position on the international political scene. A more politically correct term appeared in the common language:(3) the “developing countries” in reference to these countries that were not as advanced as Western Europe or the United States, but are on their way. Rostow, in 1960, explained that each country, to prosper, should follow 5 different stages of economic development. (4)  These stages are indicated on the following diagram:

 

 

 

Source: www.lewishistoricalsociety.com.

 

 

However, Andre Gunder Franck, among other critics, argues in 1966 that the idea that economic development happens through a succession of capitalist stages is flawed, as it is clear that the characteristics of today’s developing countries’ and societies do not resemble in any evident aspect those of the past of contemporary developed economies(5)

 

In 1948, the International Monetary Fund (IMF) started publishing the International Financial Statistics (IFS), providing economic and financial data of member countries. In its early stages, in 1964, the classification of these countries presented different groups: the industrial countries; other high-income countries; and the less-developed countries. This classification evolved other the years, at times without clear motivation from the IFS. In the 1980’s, a number of countries started evolving from one group to another. For instance, in 1989, Greece and Portugal whom used to belong to the developing countries category became industrial countries. In 1997, Israel, Korea, and Singapore were added to the “advanced countries group”.(6)

 

 

 

Source: Wikimedia Commons.

 

 

The United Nations Development Programme operates a classification of countries utilizing the Human Development Index (HDI), which takes into account achievements in longevity, education, and income. According to the United Nations, the less developed countries (LDCs) are “the poorest and weakest in the world” such as Afghanistan, Benin or Madagascar. Therefore, these countries should be accorded special attention from the international community .(7)

 

Besides, the World Bank classification of economies is based on Gross National Income (GNI) per capita. The different groups are “low income, US$1,025 or less; lower middle income, US$1,026 – US$4,035; upper middle income, US$4,036 – US$12,475; and high income, US$12,476 or more.” (8)

 

Even though some of these classifications seem adaptive, a hierarchic view of countries remains. However, it appears nowadays that this hierarchic approach needs to be shaken up, considering the evolution of markets fundamentals. This process has already started, and we are now talking about “emerging countries”. In fact, countries such as India or China are no longer looked at as developing countries by leading economies, but rather as potential competitors. Singapore is a relevant example of a high-speed growing economy, and ranked third in the list of GDP PPP (Purchasing Power Parity) per capita top countries in 2011, overtaking the United States . (9)

 

Besides, these emerging economies now possess powerful and influential technology hubs, such as Bangalore in India which adopted the meaningful nickname of “Silicon Valley of India”. Thanks to its Information Technology hub, the city has become a strategic place for investment.(10) Furthermore, the BRICs (Brazil, Russia, India, and China) now account for a fair share of the global output. In 2001, it was predicted that these four countries together should comprise 10% of the Gross World Product (GWP) by 2010.(11) In 2011, their share was 19%, and should rise to 23% by 2016, according to the IMF.(12) Not only the contribution of these countries to GWP has increased, but the traditional wealthy nations have to make room for them on the international scene. The formation of the G20 in 1999 aimed at promoting international financial stability, and facilitating a dialogue between industrialized countries and emerging countries. It also symbolizes the recognition that emerging countries have their word to say in matters of global governance and international trade issues.

 

The Human Development Report Office points out that the Global South countries have a growing influence on the resource and power distribution worldwide.(13) As ASEAN countries recently took further steps towards monetary integration,(14) and the BRICS (BRICs + South Africa) are considering the elaboration of a BRICS development bank, it might be time to revise once again our vocabulary to reflect a new world order.(15)

 

Léna Chiaravalli

Institute of Economic and Social Development

University of Paris 1

 

References: 

1.L’Observateur. 1952. Trois mondes, une planète http://www.homme moderne.org/societe/demo/sauvy/3mondes.html

2. Third World – Origins http://science.jrank.org/pages/11447/Third-World-Origins.html

 

 

3. Jessica Karpilo. 2010. Developed or Developing? Dividing The World Into The Haves and The Have-Nots http://geography.about.com/od/countryinformation/a/thirdworlddevelopingldc.htm

 

 

4.Walt Whitman Rostow, 1960.The Stages of Economic Growth: A Non-Communist Manifesto https://www.mtholyoke.edu/acad/intrel/ipe/rostow.htm

 

 

5. Andre Gunder Frank 1966. The Development of Underdevelopment http://www.bresserpereira.org.br/Terceiros/Cursos/2010/1970.The_Development_of_Underdevelopment.pdf

 

 

6. Lynge Nielsen. 2011. Classifications of Countries Based on Their Level of Development: How it is Done and How it Could be Done http://www.imf.org/external/pubs/ft/wp/2011/wp1131.pdf

 

 

7. Nations Unies. 2012. Pays les moins avancés http://www.un.org/fr/globalissues/ldc/index.shtml

 

 

8. The World Bank. 2012. How we Classify Countries http://data.worldbank.org/about/country-classifications

 

 

9. International Monetary Fund. April 2012. Gross domestic product based on purchasing-power-parity (PPP) per capita GDP

 

 

10. The Economic Times. 2012. Bangalore among the top 10 preferred entrepreneurial locations http://articles.economictimes.indiatimes.com/2012-04-12/news/31574639_1_startups-venture-capital-early-stage

 

 

11. The Economist. 2008. Another BRIC in the wall The perils of overestimating emerging markets http://www.economist.com/node/11075147?story_id=11075147

 

 

12.Grant Thornton International Business Report 2012 http://www.grantthornton.in/html/assets/IBR2012_BRIC_Focus.pdf

 

 

13. United Nations Development Program. 2011. Discussion: Themes for the global Human Development Reports 2012 and 2013

 

http://hdr.undp.org/en/nhdr/networks/replies/HDR2012_theme_CR_EN.pdf

 

 

14. Pradumna B. Rana. 2012. The next steps in ASEAN+3 monetary integration http://www.voxeu.org/article/next-steps-asean3-monetary-integration

 

 

15.The Times of India. 2012. BRICS countries mull joint development bank http://timesofindia.indiatimes.com/videos/business/BRICS-countries-mull-joint-development-bank/videoshow/12450734.cms