We often hear terms such as “developed countries” and “developing countries” used by economists and politicians around the world. Often we simply take it for granted that all the countries in the west are developed countries, just because they are richer countries. But let us really examine what are the real factors that determine the development status of a nation. Although there are various debates and contentions about the factors that determine development, the World Bank, an organisation that is respected around the world, classifies the progress of a country according to its per capita gross national income (GNI). According to this data, each country or economy is divided into low, middle or high income categories.

How the classification is made

This classification of the countries according to income groups is based on the lending activities that are taken up by the World Bank. There are exhaustive lists of eligibility that a nation must confirm to before getting a loan sanctioned from the World Bank, therefore it can be safely said that the World Bank is an authority in the decision of which nations classify as developed countries. Thus countries with a high per capita income of $ 12,276 (according to the 2010 GNI data) would classify as developed countries. The other countries in the middle ($ 1005- $ 3975) and lower income group ($1005 or less) are on the other hand referred to as developing countries.

Another factor that goes into the determination of developed countries is the industrialisation. The first country to be industrialised was the United Kingdom, followed by France, Germany and the United States. The industrialisation carried on the other Western European nations over the latter half of the 19^th century and the 20th century.

Modern day economists believe that most of the demarcation between developed countries and the developing countries is thus a 20^th century phenomenon that we are still basing our notions on. These modern economists argue that industrialisation in today’s context is an ambiguous factor to consider because it an ongoing process in most countries, be it a developed or a developing nation.

The future forecast

With the Euro Zone debt issues coming into light with every passing day, the future of the these so called developed countries does seem bleak. Even the World Bank forecast of 2012 for developed countries does not seem to be very encouraging. Putting for the debt crisis in most European nations as the main reason the World Bank has stated that the developed countries are likely to expand at a rate of only 1.4 per cent during 2012.

This is as compared to developing nations that are likely to grow at an average rate of 5.4 per cent. These are the latest estimates by the World Bank that have depressed the world economy even further. Last year there was still some optimism being generated as developed countries were projected to grow at 2.7 per cent while developing nations were projected to grow at 6.2 per cent. But the realistic look at the crisis seems to have changed the fate of the developed countries in particular.