Developing country, also called an emerging market country, is a nation whose economy is changing, shifting from poverty toward greater prosperity. Developing countries are usually changing from an economy based on agriculture to one based on industrial production. Many of these countries are also changing from centrally planned economies, which are mainly controlled by the government, to market economies, which are largely free of government control.
One of the measurements economists use to classify countries is per capita (per person) income. Per capita income, often called PCI, is the entire income for a nation in a given year divided by that nation’s population. A PCI of between $1,000 and $4,000 is one sign that a nation’s economy is at the level of a developing country. Poor countries—that is, those with PCI’s below $1,000—are sometimes known as Third World countries.
In the late 1900’s, some poor countries began to emerge from poverty at such a rapid rate that it was no longer possible to categorize them as Third World. Many of these countries were in East and Southeast Asia. For example, in Southeast Asia, Thailand had a PCI of $100 in 1960. By the late 1980’s, the economy of this newly industrializing nation was growing at a rate of more than 10 percent per year. In the 1990’s, the PCI exceeded $2,000 per year, and Thailand could no longer be considered a Third World nation. The five countries that economists refer to as the BRIMC nations—Brazil, Russia, India, Mexico, and China—have also shown tremendous economic growth since the mid-1990’s.
In some of the most economically advanced developing countries, there are still many people living in extreme poverty. But the number of middle-class citizens is steadily increasing in these nations.
Many developing countries that belonged to Third World organizations left such groups and went their own way once they became more economically successful. For the most part, however, developing countries have not formed a unified political group in such bodies as the United Nations. Instead, developing countries intensely compete among themselves for investment from the United States, Japan, and capital-rich nations in Europe.
