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High-Level Conference Addresses Challenges for Middle-Income Countries

The recent High-Level Conference of Middle-Income Countries (MICs), held on 28 and 29 April, gathered senior representatives from 24 MICs. Many of these nations are heavily indebted, significantly limiting their ability to invest in economic development.

Since the turn of the millennium, only 27 countries have successfully transitioned from middle-income to high-income status, and numerous others have struggled. In fact, 11 countries have oscillated between these classifications multiple times before finally achieving high-income standing.

“The transition of middle-income countries to high-income status alongside sustainable development objectives demands enhanced financing for development,” stated Armida Salsiah Alisjahbana, Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific (ESCAP), during the conference’s opening. “This requires domestic policy reforms that expand fiscal capabilities, sustain manageable debt levels, and direct resources toward productive investments.”

The Makati Declaration on Middle-Income Countries urges the UN to assist MICs in securing development financing through innovative mechanisms. It also calls for support in various sectors, including initiatives to mitigate climate impacts, foster digital transformation, and enhance resilience against global shocks.

“We acknowledge that middle-income countries often face growth slowdowns. If these issues go unresolved, they risk becoming trapped in what is commonly known as the ‘middle-income trap,’” the Declaration emphasizes. “We highlight that these countries grapple with unique challenges, including significant inequalities, low growth rates, persistent poverty, unemployment, biodiversity loss, and the adverse impacts of climate change, as well as reliance on primary commodities, substantial external debt, and the unpredictability of capital flows and exchange rates.”

Furthermore, MICs are committed to improving cooperation among themselves and increasing resources for technical collaboration in the Global South. This moves comes especially at a time when development assistance from traditional donors in the Global North has been dwindling.

“We are reshaping traditional development partnerships as more MICs, like the Philippines, begin to allocate additional resources for South-South and technical cooperation,” remarked Enrique Manalo, Secretary for Foreign Affairs of the Philippines, during the conference. “If expanded, this trend could offer transformative benefits for the global development landscape.”

Manalo also described the Like-Minded Group of MICs as “champions of multilateralism.” He asserted that establishing a stable path for all middle-income countries necessitates a firm commitment to an international order grounded in equity and justice.

Source
news.un.org