Challenge yourself: How much do you know about the World Development Report 2024?

Challenge yourself: How much do you know about the World Development Report 2024?

Q1. With reference to the recent World Bank report titled "World Development Report 2024: The Middle Income Trap," which of the statements given below is/ are correct?

1.       The report identifies India as one of the countries at risk of falling into the "middle income trap."

2.      The report notes that only 34 middle-income economies have transitioned to high-income status since 1990.

3.      The report suggests a comprehensive approach focusing on overall economic performance for India to achieve its goal of becoming a developed nation by 2047.

Select the correct answer using the code given below:

(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, and 3

Answer: (d) 1, 2, and 3

Explanation: The World Development Report 2024 highlights that India is at risk of falling into the middle income trap, mentions that only 34 middle-income economies have transitioned to high-income status since 1990, and recommends a comprehensive approach focusing on overall economic performance for India to achieve its 2047 goal.

Q2. According to the World Development Report 2024, what does the "middle income trap" refer to?

1.       A situation where a country remains stuck at a middle-income level without advancing to high-income status.

2.      Economic stagnation when GDP per capita reaches about 10% of the United States level.

3.      The reliance on low wages and basic technology for growth that eventually leads to diminishing returns.

Select the correct answer using the code given below:

(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, and 3

Answer: (d) 1, 2, and 3

Explanation: The middle income trap is described as a situation where a country stagnates at a middle-income level without advancing, often when GDP per capita reaches about 10% of the US level. It can occur due to the exhaustion of growth drivers such as low wages and basic technology.

Q3. What are the strategic recommendations made by the World Bank in the World Development Report 2024 for countries to reach high-income status?

1.       1i Phase: Focus on investment for low-income countries.

2.      2i Phase: Investment and infusion of foreign technologies for lower-middle-income countries.

3.      3i Phase: Investment, infusion, and innovation for upper-middle-income countries.

Select the correct answer using the code given below:

(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, and 3

Answer: (d) 1, 2, and 3

Explanation: The World Bank recommends a three-phase approach for countries to reach high-income status: focusing on investment for low-income countries, investment and infusion of foreign technologies for lower-middle-income countries, and investment, infusion, and innovation for upper-middle-income countries.

Q4. What are some of the significant obstacles identified in the World Development Report 2024 that middle-income countries face?

1.       Ageing populations and rising debt.

2.      Geopolitical and trade frictions.

3.      Environmental concerns.

Select the correct answer using the code given below:

(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, and 3

Answer: (d) 1, 2, and 3

Explanation: The report identifies several significant obstacles that middle-income countries face, including ageing populations, rising debt, geopolitical and trade frictions, and environmental concerns.

Q5. What key factor does the World Bank highlight as insufficient alone for middle-income countries to sustain economic growth in the World Development Report 2024?

1.       Increasing saving and investment rates.

2.      Improving basic education.

3.      Building physical capital.

Select the correct answer using the code given below:

(a) 1 only
(b) 1 and 2 only
(c) 1, 2, and 3
(d) 3 only

Answer: (c) 1, 2, and 3

Explanation: The World Bank highlights that simply increasing saving and investment rates, improving basic education, or building physical capital alone is insufficient for middle-income countries to sustain economic growth. They must address productivity issues and other factors beyond physical capital.

Q6. According to the World Development Report 2024, what percentage of the global population resides in middle-income countries?

(a) 40%
(b) 50%
(c) 75%
(d) 90%

Answer: (c) 75%

Explanation: Middle-income countries are home to 75% of the global population, as stated in the World Development Report 2024.

Q7. What is the expected impact on global economic prosperity if middle-income countries fail to achieve high-income status, according to the World Development Report 2024?

(a) Minimal impact
(b) Significant impact
(c) No impact
(d) Negative impact only on low-income countries

Answer: (b) Significant impact

Explanation: The success or failure of middle-income countries in achieving high-income status will significantly impact global economic prosperity due to their large share of the global population and GDP.

Q8. According to the World Development Report 2024, how long would it take for India's per capita income to reach a quarter of the US income levels if current trends continue?

(a) 25 years
(b) 50 years
(c) 75 years
(d) 100 years

Answer: (c) 75 years

Explanation: The report indicates that it would take 75 years for India's per capita income to reach a quarter of the US income levels if current trends continue.

Q9. Which of the following countries is highlighted as a successful example of transitioning from low to high income using the 3i strategy in the World Development Report 2024?

(a) China
(b) India
(c) South Korea
(d) Brazil

Answer: (c) South Korea

Explanation: South Korea is highlighted as an example of successfully transitioning from low to high income using the 3i strategy, starting with a per capita income of USD 1,200 in 1960 and reaching USD 33,000 by 2023.

Q10. What policy approach does the World Development Report 2024 recommend for India to avoid the middle-income trap and achieve high-income status by 2047?

(a) Focus on isolated sectors
(b) Focus on horizontal policies
(c) Increase capital endowments only
(d) Focus on vertical sectors like manufacturing

Answer: (b) Focus on horizontal policies

Explanation: The report recommends that India focus on horizontal policies rather than vertical debates, improving overall economic performance to avoid the middle-income trap and achieve high-income status by 2047.

Q11. According to the World Development Report 2024, what is a critical area for improvement in India to facilitate better absorption of technology and innovation?

(a) Increase in physical capital
(b) Enhancing education and skills
(c) Increasing saving rates
(d) Expanding basic infrastructure

Answer: (b) Enhancing education and skills

Explanation: The report emphasizes improving education and skills as critical for enabling better absorption of technology and innovation, which is necessary for India's economic growth.

Q12. What does the World Development Report 2024 suggest about the prevalence of microenterprises in India?

(a) They are highly productive and innovative.
(b) They face barriers to growth due to policies favoring smaller firms.
(c) They dominate the manufacturing sector.
(d) They do not contribute significantly to the economy.

Answer: (b) They face barriers to growth due to policies favoring smaller firms.

Explanation: The report highlights that microenterprises in India face barriers to growth due to policies that favor smaller firms, which affects overall productivity and economic growth.

Q13. What is the target year for India to achieve high-income status as per the World Development Report 2024?

(a) 2030
(b) 2040
(c) 2047
(d) 2050

Answer: (c) 2047

Explanation: India aims to become a developed nation and achieve high-income status by 2047, which is the target year highlighted in the report.

Q14. What are the three phases of the 3i strategy recommended in the World Development Report 2024 for countries to reach high-income status?

(a) Investment, innovation, and infrastructure
(b) Investment, infusion of foreign technologies, and innovation
(c) Infrastructure, infusion, and innovation
(d) Infusion, innovation, and industry

Answer: (b) Investment, infusion of foreign technologies, and innovation

Explanation: The three phases of the 3i strategy are: investment for low-income countries, infusion of foreign technologies for lower-middle-income countries, and innovation for upper-middle-income countries.

Q15. According to the World Development Report 2024, what is a major challenge for middle-income countries in sustaining economic growth?

(a) Lack of natural resources
(b) High levels of physical capital
(c) Diminishing returns on physical capital
(d) Over-reliance on foreign aid

Answer: (c) Diminishing returns on physical capital

Explanation: Middle-income countries face major challenges in sustaining economic growth due to diminishing returns on physical capital, as mentioned in the report.