Low-income countries are those which have the weakest economies when evaluated by the World Bank, an international coalition of 189 countries dedicated to reducing poverty around the world. As part of its work, the World Bank analyzes the economic health of all the world's countries and places each into one of four categories, from low income to high income, based upon its gross national income (GNI) per capita. GNI is a metric that essentially measures the average income of a country's citizens, making it a very useful tool for evaluating a country's economic health.
The World Bank adjusts the dividing line between categories every year, to reflect global inflation. For the fiscal year 2022, high-income countries are those with a per-capita GNI of $12,696 (USD) or more. Middle-income countries are split into two categories: upper-middle-income nations, which have per capita incomes between $12,695 and $4,096, and lower-middle-income nations, which have a GNI per capita of $4,095 to $1,046. Finally, those countries whose GNI per capita was computed to be $1,045 or less were placed in the low-income category.
All 27 of the World's Low-Income Countries (World Bank 2022)
|Burkina Faso||Guinea-Bisseau||Sierra Leone|
|Central African Republic||Madagascar||South Sudan|
|DR Congo||Mali||Syrian Arab Republic|
Low-income countries are often synonymous with underdeveloped countries, also known as developing countries, emerging markets, or newly industrialized countries. Wealthier countries and/or international aid organizations often give low-income countries financial aid to help boost and support their economic, political, social, and environmental development. This may come in the form of bilateral aid, which is given directly from the donor country to another, or multilateral aid, which is given to international organizations such as World Bank and United Nations agencies such as UNICEF, which distribute aid to developing countries.
As the poorest countries in the world, low-income countries face struggles relating to a struggling or underdeveloped economy. Issues related to poor economic health include below-average life expectancy, high infant mortality rates, poor educational outcomes, substandard infrastructure, degrading environmental and climate conditions, and inferior healthcare systems. Many low-income countries suffer high rates of malnutrition, as well as illnesses and infections due to lack of clean water, low sanitation levels, and inadequate access to quality medical care.
Gross national income (GNI) explained
GNI per capita is the dollar value of a country's final income, or GNI, divided by its population. A country's GNI is based upon the gross domestic product (GDP), which measures the value of all the goods and services produced within the country's physical territory. However, GNI then adds any profits earned overseas by a country's citizens, and finally subtracts any profits earned within the country's borders by foreign companies or investors (which are therefore contributions to another country's economy). GNI is often used interchangeably with gross national product (GNP), a very similar, but slightly older metric.
The World Bank computes GNI using a specific technique, known as the Atlas method,. The Atlas method enables accurate and stable comparisons by converting each country's GNI into U.S. dollars using official exchange rates carefully designed to accommodate for market fluctuations. Each exchange rate is the average rate for the past three years, adjusted for differences in inflation between the country and the Euro area, Japan, the United Kingdom, and the United States.