Which Poor Country Gets Rich First?（原声文稿）

This is a map of the world's income groups, according to the World Bank.

Right now, 25 countries are officially low income, meaning the average person earns $1 ,175 a year or less.

To be called rich, a country has to pass $14 ,375, and most poor countries never get close.

So out of everyone still stuck at the bottom, who actually makes it out first?

Well, contrary to popular belief, the answer isn't simply whichever country is growing the fastest right now.

Growth spurts are common, but escapes are rare.

The biggest success stories grew fast for decades by making things the rest of the world wanted to buy, under governments that punished failure, and the path they took might not be there for much longer.

But first, we need to know where the finish line actually is.

The World Bank sorts every country into four groups, low -income, lower -middle, upper -middle, and high -income.

They sound official, but the high -income line was first drawn in 1989 at $6 ,000, mostly to decide which countries counted as an industrial country, and it's only been adjusted for inflation since.

It's so arbitrary that in 2026, Togo moved up a group mainly because a new census founders had almost 12 % fewer people than previously estimated.

Now, for a long time, economists assumed that poor countries would naturally catch up. It's a lot easier to copy a technology than to invent it.

So in theory, the poorest places should grow the fastest. For decades, the opposite happened.

A 2020 study of 50 years of data found that poor countries as a group had never closed the gap with rich ones.

In fact, of all the countries that were low income in 1960, not a single one had become high income by 2008.

Even the middle is a trap too.

Out of 101 middle income countries in 1960, only 13 had become high income by 2008, and most of those were either tiny, sitting on oil, or in Europe.

Economists at the World Bank even have a name for it, the middle income trap.

Countries get too expensive to compete with cheap labor, but they're not advanced enough to compete with rich countries on technology.

So to figure out who's next, we have to go back and look at how the last ones did it.

And the obvious place to start is South Korea, because it started from the very bottom.

When the Korean War ended in 1953, South Korea was close to being considered a failed state.

American aid paid for about 70 % of everything it imported.

By 1961, the average South Korean earned under $100 a year, less than the average person in Chad, and North Korea was twice as rich.

Today, South Korea earns about $43 ,500 per person, which is more than Japan.

But here's the thing, the governments of the 1950s actually had a reason to keep the economy weak.

Under President Sigmund Rhee, Korea kept its currency, the one, deliberately overvalued.

See, under a 1950 deal, the one that Korea lent to the American -led United Nations forces was paid back in dollars, so a stronger one meant more American dollars.

In 1960, an uprising known as the April 19th Revolution toppled Rhee, but the democratic government that replaced him struggled with soaring rice prices and unemployment above 23%.

So on May 16th 1961, a general named Park Chung -hee seized power in a coup.

Days later, his regime arrested 51 of the country's leading businessmen.

They were only released after signing a pledge to hand over their property whenever the government needed it to build the nation.

From then on, the state controlled who got credit, and illegally moving money out of the country could carry the death penalty.

You'd think that this is where the famous export miracle begins, right? Well, not quite.

Park's first plan, the first five -year economic development plan of 1962, actually looked inward.

It tried to get Korea to make the things it was importing, an approach known as import substitution, and it stumbled almost immediately.

A currency reform that froze people's bank accounts failed so badly that the US suspended aid.

So when He brought in a new pro -export team led by an official named Chang Ki -young, and in May 1964, they nearly halved the won's value, from 130 to 255 per dollar, making Korean goods cheap abroad.

That year, exports passed 100 million dollars for the first time.

But the cheap currency wasn't the whole story.

Every month from 1965 to 1979, the government held a meeting called the Enlarged Conference for Export Promotion, and PARC attended almost every single one.

Firms that hit their export targets got cheap loans and government favors, firms that missed them were cut loose and fast.

That was the real difference from Latin America, which protected its industries too but never enforced the punishments.

But don't get me wrong, it wasn't purely self -made.

Normalizing relations with Japan in 1965 brought in about $800 million in aid and loans.

Korea also sent 50 ,000 combat troops to fight alongside the Americans in the Vietnam War, and by 1969, earnings tied to the war were equal to nearly 30 % of its exports.

Korea started out selling whatever it could.

In 1970, wigs alone were 9 % of its exports.

Then came plywood and cheap clothing, and that growth came at a real price.

In 1966, In 1986, Korean workers were putting in 55 -hour weeks for about half of what Thai or Filipino workers earned.

But Korea kept moving up to better products.

Hyundai Heavy Industries built its first ship in 1974, and within a decade it was the largest shipbuilder in the world.

All together, Korea's exports went from about $41 million in 1961 to over $15 billion by 1979.

And none of it was democratic.

static. Park ruled until he was assassinated in 1979, and real democracy didn't arrive until 1987. And Korea wasn't the only one.

Along with Taiwan, Hong Kong, and Singapore, it became one of the four so -called Asian Tigers.

Going back to 1965, Singapore was expelled from Malaysia with about $500 per person and no natural resources at all.

Today, it earns about $109 ,000 per person, eighth in the world.

Then in 1979, China began setting up what it called special economic zones, areas where foreign companies could set up factories under looser rules than the rest of the country.

The best example is Shenzhen, right next to Hong Kong.

Before 1980, its economy was 0 .2 % the size of Hong Kong's. By 2018, Shenzhen had overtaken it.

So, if the recipe is known, why don't more countries just follow it?

Well, plenty have tried, and plenty looked like they were going to make it. Take Argentina for example.

Going back to 1950, it had more than half of America's income per person.

But between 1960 and 2015, it had 22 separate years where income per person actually shrank, and it fell out of the high income group in 2016 and again in 2019.

So, you can get close and still lose it.

Or go back to 1960 in the Philippines, which was three times richer per person than China.

But for the next 26 years, it grew about 1 % a year.

By 2015, it had only 40 % of China's income. Botswana is a more complicated story.

When it gained independence in 1966, it was one of the poorest countries on Earth.

Then, in 1967, the diamond company De Beers found diamonds at Orapa.

Unlike so many resource -rich countries, Botswana managed the money well.

It went into a 50 -50 partnership with De Beers, and it saved its surpluses for downturn years.

From 1966 to 1989, it was the fastest -growing economy in the world.

The thing is, though, it never built much beyond diamonds.

Even in 2025, they made up about a quarter of its economy and about 80 % of its exports.

So when much cheaper, lab -grown diamonds went from 1 % of the market to about a fifth of it in a decade, there wasn't much to fall back on.

The economy shrank 3 % in 2024 and stayed in recession through 2025.

Relying on one product, no matter how well you manage it, is a risky way to get rich.

Thailand might be the most painful case of all.

From 1986 to 1996, it grew about 8 % a year per person, just like one of the tigers.

Then came the 1997 Asian financial crisis, when foreign money fled the region all at once and currencies and stock markets across Southeast Asia collapsed.

By one estimate, if Thailand had kept up its early 1990s pace, it would have been a high -income country by 2012.

Instead, its growth slowed to 3 .4 % a year from 2000 to 2015.

China passed it, and it's been stuck in upper middle income since 2011.

So each of these countries broke a piece of the Korean template. Argentina couldn't hold on to its gains.

The Philippines grew too slowly, Botswana relied on one product, and Thailand got knocked off course and never fully recovered.

Getting to the middle is hard enough, but leaving it means making better things, not just more of them. And here's where it gets harder.

Even if a country does everything right today, the path Korea used might not even be there anymore.

In 2015, the Harvard economist Danny Roderick pointed out something strange.

Countries were running out of factory jobs earlier and at much lower incomes than anyone before them. It's known as premature deindustrialization.

Britain, Sweden and Italy saw their factory jobs peak once they were already fairly rich, While India and many African countries hit their peak at incomes roughly 20 times lower, that matters because factory work was special.

A poor country could import the technology, employ huge numbers of unskilled workers, and sell what it made to the whole world.

Roderick has even argued that the East Asian Tigers may be the last countries ever to industrialise the old way. Automation couldn't shrink the opening further. other.

Robots mostly make sense where work is expensive, which isn't the poorest countries. But there is a real opening right now.

Companies have been moving factories out of China and into other countries, a shift known as China Plus One.

It sped up when the US put tariffs on Chinese goods in 2018, and even China's own government is now steering investments away from cheap assembly.

So there's still a window, but with factory jobs drying up earlier and earlier, whoever gets rich next probably has to move fast. So who's actually in the running? Well, Vietnam's a good case.

After the Vietnam War, Vietnam was isolated under an American trade embargo, and its collectivized farms couldn't feed people. But reform started from below.

Farmers began quietly breaking the rules, dividing up collective land into household plots in and what became known as fence breaking.

In January 1981, the Communist Party legalized it with Directive 100.

It wasn't enough though, and by 1986 inflation was nearly 500%.

So on December 18th 1986, the party launched Doi Moi, which means renovation.

It's remembered as gradual, but there was actually a sudden big bang in March 1989, line, when nearly all prices, interest rates and the exchange rate were freed at once.

That same year, the country that couldn't feed itself exported rice for the first time.

By 2008, it was the second largest rice exporter on earth. Then it opened up. The US embargo ended in 1994.

A trade deal with the US in 2000 increased Vietnam's exports to America roughly 13 fold in seven years, and in 2007 it joined the World Trade Organization.

Samsung made Vietnam its biggest production base anywhere in the world.

Overall, exports went from $2 .4 billion in 1990 to $371 billion in 2022.

So on July 1st, 2026, Vietnam was officially promoted to upper -middle income, with its average income at just under $5 ,000.

Then there's India, which took a completely different road.

From 1950 to 1980, India grew about 3 .5 % a year, half the tiger's pace.

That's because it ran what's known as the License Raj, where businesses needed government permission for almost everything, and producing more than your license allowed could land you in jail.

Then in 1991, India nearly ran out of the foreign currency it needed to pay for its imports, so Prime Minister Narasimha Rao and his Finance Minister Manmohan Singh scrapped industrial licensing and slashed tariffs from about 90 % to under 30 % within four years.

But here's the twist.

India grew mostly through services and software, not factories, which is the opposite of the career template.

Manufacturing is only about 13 % of India's economy, compared to an average of 26 % for countries at its income level.

Today, India is one of the fastest growing big economies in the world, but it still only earns about $2 ,750 per person, roughly half of Vietnam's, and its working age population is set to grow by 280 million people by 2050.

That's either a huge advantage or a huge problem, depending on whether the jobs show up.

And then there's Ethiopia, the fastest grower from the lowest base.

But it's starting from about $1 ,000 per person, and it's still officially low income.

Under Prime Minister Mellis Zinaoui, who led the country from 1991 to 2012, Ethiopia deliberately copied the East Asian model, with state -led infrastructure, industrial parks and Chinese investment. The biggest symbol of all of this was a railway.

See when Eritrea became independent in 1993, Ethiopia lost its coastline and became landlocked.

Today, more than 95 % of its trade by volume runs through neighboring Djibouti.

So China built an electric railway, about 470 miles from the capital, Addis Ababa, to the Djibouti coast.

It started commercial service on January 1st, 2018, and it was supposed to turn a trip of days into about 10 hours. But the reality has been rougher.

By 2024, the trip still took nearly a full day with an overnight stop.

Trains ran at around 30mph instead of the 75mph they were designed for, thanks to unreliable power, theft and farmers pushing their livestock onto the tracks to claim compensation. And the problems went well beyond one railway.

A civil war in the northern region of Tigray ended in November 2022 with at least 300 ,000 casualties, and in December In November 2023, Ethiopia defaulted on a $33 million bond payment. So by now the field looks pretty clear.

Ethiopia has speed but no foundation yet.

India has scale but it's taking a different and less proven path. And Vietnam has the career checklist. So is it Vietnam? Well it has the strongest case by far.

It has the most sustained growth, the most diverse factory exports and it's gained the most from factories leaving China.

It set a target of becoming high income by 2045, which, according to the World Bank, means roughly tripling its income with about 6 % growth a year for two decades.

And its newest reforms are openly modelled on Korea.

In 2025, it merged its 63 provinces into 34 and declared the private sector the most important driving force of the economy.

It's also planning around 20 large national companies, similar to Korea's giant family run conglomerates.

The problem is, a lot of what Vietnam exports is assembled there, not made there.

The parts often come from China or South Korea, and foreign value makes up about half of its exports, the highest share in Asia.

Despite Samsung's huge presence in the country, almost no parts that matter like chips or screens are made by Vietnamese companies.

To make the final leap, Vietnam has to go from putting phones together to designing and building the parts inside them.

That's the same jump Malaysia hasn't been able to make, and it's been stuck in upper middle income since 1992.

Sixty years ago, no one would have bet on South Korea, and right now, Vietnam looks like the closest thing to the next one.

Whether it gets there depends on whether it can stop assembling the world's products and start making its own. Thank you for watching.