When Will The World As A Whole Be A High Income Country?

The World Bank classifies countries as low, middle, or high income on the basis of their GNI (gross national income) per capita. According to the most recent July update, countries are considered high income if their GNI per capita exceeds $12,615.
1. GNI and cutoff

Over the past decade, world GNI per capita has gone from about 60% of the high income threshold to just under 80% of the threshold. The absolute difference has also been shrinking.
2. GNI and cutoff compared

Source: World Bank development indicators

If the world were a country, in the next few decades it should reach a point where it could be categorized as high income.

The World Bank warns us against conflating high income with development status. It is not hard to see why. We are hurtling towards a high income world where billions will still live in poverty, and where existing contradictions are intensified. Perhaps access to the internet will be more universal than access to clean water.

More production will not guarantee better societies, a fairer distribution of wealth, or even the eradication of individual scarcity. But as incomes rise, arguments that rely on material scarcity to reject social justice lose their force. If more production does not translate into the possibility of a more just world, (especially in an age of climate change) then what is the point of more production?

Geographic barriers will be crucial; as Branko Milanovic argues, the main source of global inequality has gone from class to location. Hence “migration is probably the most powerful tool for reducing global poverty and inequality.” We can imagine the wealthy countries tightening their borders even further.

The European Union of today is a privileged microcosm of the possible world of tomorrow. It is a high income bloc composed of high income countries. As Milanovic explains in The Haves and the Have-Nots, inequality in Europe is primarily the result of differences between countries, not within countries.

Europe has a system of open migration, at least within the Schengen zone. But open migration is an insufficient mechanism for dealing with internal imbalances, as the crisis has shown once again. Migration is a complement not a substitute for policies that produce convergence.

The current agenda of driving wages down across the periphery is not a convergence policy. Austerity is not a convergence policy. Forced privatizations are not a convergence policy. The economic histories of Latin America and Asia show that neoliberal structural adjustment is not a convergence policy.

As Milanovic argued, “The European Union framers were aware of the long-run unsustainability of a very economically unequal union, and hence policies have for years been directed toward helping the growth rates of poorer members.” The crisis marks a dramatic reversal in this historic policy, with the Commission now enforcing divergence.

If the European Union cannot muster solidarity between European countries, what hope is there for solidarity between Europe and the rest of the world? Fortress Europa would be a depressing contribution to the highly unequal high income world that looms before us.

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