Sends message to middle-income countries at ECLAC session. Says 44% of global population is poor.

The World Bank said Thursday that middle-income countries need greater investment in basic infrastructure to escape what it calls the "middle-income trap," a reference to sustained economic growth that has not reduced poverty.

To escape this trap, he continued, countries need to go through two transitions over time.

"A transition with investment in infrastructure, in digitalization, among others, and another transition that demands investment plus infusion; that is, investing in everything that facilitates and increases the profitability of private investment and bringing in the infusion of technology generated elsewhere," said Luis López-Calva, managing director of the World Bank's Poverty and Equity Global Practice.

"Additionally, a more advanced step is required, combining investment with the infusion of technology and innovation. In other words, countries must begin to generate their own innovation after previous advances," he added during the 40th session of the Economic Commission for Latin America and the Caribbean (ECLAC) in Lima.

López-Calva said that the growth model based on creativity and innovation requires an institutional transformation that, if not carried out, would cause countries to remain trapped in the transition required to escape poverty.

"There are institutional issues that prevent this transition to a different model. Different strategies are needed in different development scenarios," he said.

EXTREME POVERTY

According to the director of the World Bank, "we are far from eradicating extreme poverty."

The extreme poverty rate has fallen from 37.9% in 1990 to 8.5% in 2024. Although 1 billion people have escaped this socioeconomic level since the 1990s, the number of people with less than US$ 6.85 has not changed.

According to López-Calva, 44% of the world's population is poor, and "very little progress has been made. Getting out of the trap of average economic growth is essential. It is not enough, but it is a necessary condition."

"There are three hard facts about middle-income countries: their growth is slower, it is different and complex. In addition, some 6 billion middle-income people are caught in a race against time, as countries must reach a significant level of income before moving towards demographic ageing or it will become much more expensive to sustain social security," he said.