Difference Between Developing Countries & Emerging Countries

by Jennifer Reynolds; Updated September 26, 2017
Group of people in a ceremonial procession, Bali, Indonesia

International business associations and economists classify countries around the world based on their level of economic and industrial development. To those who are not as economically minded, the terms and labels used can become confusing, especially ones that sound similar, such as “developing countries” and “emerging countries.” These two classifications refer to entirely different groups of countries. The fundamental difference is that emerging nations are growing rapidly and becoming more important on the world economic stage, while developing nations are struggling in comparison and still need help from trade partners around the world.

Developing Countries

The World Trade Organization does not have a set framework for what constitutes a developing country; member nations declare themselves as such. Other WTO members are able to challenge a country's declared status, but it is rare for any to do so. For the 2015 fiscal year, the World Bank designated countries with around $1,045 per capita income as low income countries. Lower-middle income countries, meanwhile, included those with a gross national income between $1,045 and $4,125. Both low and lower-middle income countries are developing countries by the World Bank's estimation. Developing countries have low levels of living and productivity, high population growth, underdeveloped industry and a reliance on agriculture and exports for economic sustainability.

Developing Countries and the WTO

The World Trade Organization lets countries declare themselves either developing or developed, but does maintain a list of the least-developed countries. The WTO's list of least-developed countries includes Myanmar, Angola, Bangladesh, Madagascar, Haiti, Chad and 25 other nations. These countries are eligible for special aid and consideration from the WTO, including lowered barriers from better-off countries on imports from least-developed nations. The goal of such attention is for the WTO to help developing and underdeveloped nations build themselves up.

Emerging Countries

Emerging countries are those with high levels of economic development, usually with rapid industrialization. Some countries, which were formerly developing nations without much opportunity for industrialization, have become emerging nations with unprecedented growth in energy, information technology and telecommunications. They differ from developing countries in that they no longer rely primarily on agriculture, have made impressive gains in infrastructure and industrial growth, and are experiencing increasing incomes and quick economic growth.

Controversy over "Emerging Markets"

Some economists argue that "emerging markets" is an outdated term. Michel Camdessus, former head of the International Monetary Fund, believes that in the next 40 years, 80 percent of economic growth around the world will come from emerging nations as they grow into fully developed countries. The four biggest emerging countries are Brazil, Russia, India and China; as a result, the acronym "BRIC" has been gaining speed as a replacement for "emerging markets."

About the Author

Jennifer Reynolds is a professional writer covering crafting, electronics and entertainment topics. She graduated in 2010 with a Bachelor of Arts in professional writing from York University.

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