International business associations and economists classify countries around the world based on their level of economic and industrial development. The terms “developing countries” and “emerging countries” refer to entirely different groups of countries. The fundamental difference between these classifications is that emerging nations are growing rapidly and becoming more important in world economics, while developing nations are struggling and still need help from trade partners around the world.
TL;DR (Too Long; Didn't Read)
Developing countries rely primarily on agriculture and have a low income per capita. Emerging countries have made impressive gains in industrial and economic growth, and may be suppliers of labor or resources to other more advanced nations.
What are 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 2018 fiscal year, the World Bank designated countries with around $1,005 per capita income as low-income countries. Lower-middle income countries, meanwhile, included those with a gross national income between $1,006 and $3,955. 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 29 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.
What are 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. One of these reasons is how some emerging markets have companies known for being global leaders on the stock market. Among the biggest growing markets are Brazil, Russia, India and China. As a result, the acronym "BRIC" has been gaining speed as a replacement for "emerging markets."