**Figure 5. Factors supporting LIC progression to MIC per capita incomes**

<!-- Start of picture text --> A. Low-income countries, 2001 B. Growth in 2001 LIC per capita C. Progression of 2001 LIC per<br>and 2020 incomes between 2001 and 2020 capita incomes<br>Number of countries Percent Rapid growing LICs<br>70 400 9.5 with low starting pointsContinued LICs 2001 LIC<br>Average threshold<br>60 New LICs 8.5 LICs turned MICs<br>300 Median<br>50<br>Other LICs turned<br>40 MICs 7.5 2020 LIC<br>30 Transition LICs 200 threshold<br>turned MICs<br>6.5<br>20 Low-income 100<br>10 countries<br>5.5<br>0 0 4.5 5.5 6.5<br>2001 2020 LICs turned MICs Continued LICs Log of 1999 GNI per capita, USD<br>Log of 2018 GNI per capita, USD<br><!-- End of picture text -->

## **D. Secondary school enrollment in LICs turned MICs**

## **E. Government effectiveness in F. Rule of law in LICs turned LICs turned MICs MICs**

<!-- Start of picture text --> Percent Index Index<br>90 Median Interquartile range 0.0 Median Interquartile range 0.0 Median Interquartile range<br>-0.3<br>-0.3<br>60<br>-0.6<br>-0.6<br>-0.9<br>30<br>-0.9<br>-1.2<br>0 -1.2 -1.5<br>5 years before Year turned 5 years after 5 years before Year turned 5 years after 5 years before Year turned 5 years after<br>MIC MIC MIC<br><!-- End of picture text --> Source: Worldwide Governance Indicators (WGI), World Bank staff calculations, World Development Indicators. A. New LICs include countries that were not LICs in 2001: Syria and South Sudan. South Sudan gained independence in 2011. C. Sample includes 59 2001 LICs. GNI per capita according to the World Bank Atlas method. GNI per capita for 1999 was published in August 2000 and reflects the original data used for country income classification in the 2001 World Bank fiscal year, while GNI per capita for 2018 was published in July 2019 and reflects the data used for the 2020 World Bank fiscal year. Exceptions are Liberia and Myanmar, for which GNI per capita in 2002 is used as a proxy for 1999. Rapid-growing LICs with low starting points are defined as LICs that had per capita incomes below one-third of the $755 LIC threshold in 2001, and these incomes have increased to above two-thirds of the $1025 LIC threshold in 2020. D. Sample includes 13 LICs that became MICs due to data limitations. Year turned MIC reflects the World Bank fiscal year. E.-F. WGI index scores are standard normal units that range between -2.5 and 2.5, with zero mean. A negative score implies government effectiveness or rule-of-law below the global average. Sample includes all 32 LICs that became MICs. Year turned MIC reflects the World Bank fiscal year.

# **_New LICs: 2016-20_**

Countries that have reached MIC status often face structural challenges that constrain their prospects for continued strong growth, while those MICs with incomes near the LIC threshold risk falling back into the LIC bracket (EBRD 2019). Three of today’s LICs fell back from middleincome levels since 2016: the Syrian Arab Republic, Tajikistan, and Yemen. While the Syrian Arab Republic was classified as a LIC for the first time, Tajikistan, and Yemen relapsed into LIC status after some of the growth-enhancing factors discussed above had helped them move to middle-income status in earlier years.

In Tajikistan, robust growth was accompanied by a halving of its currency’s value stemming from the 2014-16 commodity price slump and by rapid population growth; as a result, per capita incomes declined. Armed conflicts in the Syrian Arab Republic and Yemen caused sharp declines in per capita incomes in both countries by severely disrupting activity, destroying physical infrastructure, and forcibly displacing more than one-half of the Syrian Arab Republic’s population and almost a 11