Challenges of financing middle-income countries

Oct 25, 2023 | Publications, Videos |

Érika Rodríguez Pinzón.

Challenges of financing middle-income countries

Middle-income countries are those whose per capita income has reached an intermediate level. This means that they are not considered rich, but their population enjoys relatively greater access to economic resources due to the overall growth of their economy. However, these countries face social challenges, especially in terms of inequality and the effectiveness of their public policies.

In addition, they face serious financing problems, as their fiscal structures are fragile, they have limited international credit systems and lack effective regional integration mechanisms. These constraints represent one of the major challenges they face in the future.

To address this problem, it is crucial that the international system seeks to innovate financing mechanisms and establish ways to access long-term sustainable credit systems.  While some proposals have been put forward, such as special drawing rights, the Global Gateway initiative or China’s Silk Road, it is essential to go beyond this and bring together financing agendas with social objectives, thus unifying the goals of economic growth and social development. Overcoming these challenges is key to improving the quality of life and reducing development gaps in these middle-income countries.

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