The category of newly industrialized country (NIC), newly industrialized economy (NIE)[1] or middle income country[2] is a socioeconomicclassification applied to several countries around the world by political scientists and economists. They represent a subset of developing countries whose economic growth is much higher than that of other developing countries; and where the social consequences of industrialization, such as urbanization, are reorganizing society.
Definition
NICs are countries whose economies have not yet reached a developed country's status but have, in a macroeconomic sense, outpaced their developing counterparts. Such countries are still considered developing nations and only differ from other developing nations in the rate at which an NIC's growth is much higher over a shorter allotted time period compared to other developing nations.[3] Another characterization of NICs is that of countries undergoing rapid economic growth (usually export-oriented).[4] Incipient or ongoing industrialization is an important indicator of an NIC.
Characteristics of newly industrialized countries
Newly industrialized countries can bring about an increase of stabilization in a country's social and economic status, allowing the people living in these nations to begin to experience better living conditions and better lifestyles. Another characteristic that appears in newly industrialized countries is the further development in government structures, such as democracy, the rule of law, and less corruption. Other such examples of a better lifestyle people living in such countries can experience are better transportation, electricity, and better access to water, compared to other developing countries and low infant mortality rate.
The table below presents the list of countries consistently considered NICs by different authors and experts.[6][7][8][9]Turkey and South Africa were classified among the world's 34 developed countries (DCs) by the CIA World Factbook in 2008.[1] Turkey became a founding member of the OECD in 1961 and Mexico joined in 1994. The G8+5 group is composed of the original G8 members in addition to China, India, Mexico, South Africa and Brazil. The members of the G20 include Brazil, China, India, Indonesia, Mexico, South Africa and Turkey.
Note: Green-colored cells indicate highest value or best performance in index, while yellow-colored cells indicate the opposite.
For China and India, the immense population of these two countries (each with over 1.4 billion people as of May 2024) means that per capita income will remain low even if either economy surpasses that of the United States in overall GDP. When GDP per capita is calculated according to purchasing power parity (PPP), this takes into account the lower costs of living in each newly industrialized country. Nominal GDP per capita typically is an indicator for living standards in a given country as well.[16]
Brazil, China, India, Mexico and South Africa meet annually with the G8 countries to discuss financial topics and climate change, due to their economic importance in today's global market and environmental impact, in a group known as G8+5.
Other
Authors set lists of countries accordingly to different methods of economic analysis. Sometimes a work ascribes NIC status to a country that other authors do not consider a NIC. This is the case of countries such as Argentina, Egypt, Sri Lanka[17] and Russia.[6]
Criticism
NICs usually benefit from comparatively low wage costs, which translates into lower input prices for suppliers. As a result, it is often easier for producers in NICs to outperform and outproduce factories in developed countries, where the cost of living is higher, and trade unions and other organizations have more political sway. This comparative advantage is often criticized by advocates of the fair trade movement.
Problems
While South Africa is considered wealthy on a wealth-per-capita basis, economic inequality is persistent and extreme poverty remains high in the country.[18]South Africa is a NIC with 34% of population unemployed and poor.
Mexico's economic growth is hampered in some areas by an ongoing drug war.[19]
Other NICs face common problems such as widespread corruption and political instability, as well as other circumstances that cause them to face the middle income trap.[3]
^Patrick H. O’Neil (2018). "Glossary". Essentials of Comparative Politics (6th ed.). W. W. Norton & Company. p. A-19. ISBN978-0-393-62458-8.
^ abPatrick H. O’Neil (2018). "Chapter 10: Developing Countries". Essentials of Comparative Politics (6th ed.). W. W. Norton & Company. pp. 304–337. ISBN978-0-393-62458-8.
^Mauro F. Guillén (2003). "Multinationals, Ideology, and Organized Labor". The Limits of Convergence. Princeton University Press. pp. 126 (Table 5.1). ISBN0-691-11633-4.
^David Waugh (2000). "Manufacturing industries (chapter 19), World development (chapter 22)". Geography, An Integrated Approach (3rd ed.). Nelson Thornes Ltd. pp. 563, 576–579, 633, and 640. ISBN0-17-444706-X.