Manila, April 29, 2025 — Middle-income countries meeting in Manila, Philippines, issued a call for financial reform, sustainable investment, and a roadmap to escape the so-called “middle-income trap.”
The High-Level Conference of Middle-Income Countries (MICs) on “Breaking New Grounds: Towards a Strategic Plan of Action for Middle-Income Countries” was held on 28 and 29 April, with the recognition that MICs play a vital role in shaping a more equitable and sustainable future amid a rapidly changing global landscape.
“Considering that the thresholds for extreme poverty are higher in wealthier countries, almost half of the population in African MICs were still living in poverty in 2024”, said Zuzana Brixiova Schwidrowski, speaking on behalf of Claver Gatete, Executive Secretary of the Economic Commission for Africa (ECA).
The ECA notes that 31 out of 54 African countries are classified as Middle-Income Countries (as of 2024), and while they are important drivers of Africa’s economic and social progress, they now face critical challenges in meeting the Sustainable Development Goals (SDGs), including SDG 1 on eradicating extreme poverty. In other words, 40% of Africa’s poor—nearly 200 million people - live in MICs.
What’s more, according to Schwidrowski, Director of the ECA’s Macroeconomic, Finance and Governance Division, “Adequate benchmarking of MICs’ development progress is hampered by a prevalent use of the GDP as the main indicator, leading to a one-dimensional approach. When progress is assessed only through the income lens, the wide range of capacities and needs of MICs is not adequately considered,” she explained.
The middle-income trap remains a pressing concern. Since the global financial crisis, only one African country has moved to the high-income group, while two have regressed to the MIC category.
Ms. Schwidrowski pointed to South Africa’s G20 presidency and the African Union’s permanent seat as critical opportunities to elevate MIC challenges on the global stage. The establishment of the G20 Task Force on Inclusive Economic Growth and its focus on industrialization and reduced inequality was recognized as a significant step towards addressing MIC challenges.
She also called for urgent, wide-ranging actions for climate change mitigation and adaptation and argued that MICs must enhance human capital and adopt new technologies to foster climate-resilient growth.
She also underscored the necessity for equitable access to concessional financing, noting that these countries face a dual challenge: they must invest significantly to avert income downturns from climate change impacts, despite contributing minimally to the problem. Moreover, the burden of substantial public debt has constrained MICs' policy options, as current debt restructuring frameworks often overlook these nations.
Ms. Schwidrowski also highlighted that many African MICs remain heavily dependent on primary product exports, lacking meaningful industrialization. She advocated for the adoption of targeted industrial policies, drawing inspiration from successful strategies in Asia and stressed that the implementation of the African Continental Free Trade Agreement (AfCFTA) could serve as a catalyst for transforming production structures and enhancing regional value chains, innovation, and human capital development.
For her part, Armida Salsiah Alisjahbana, Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific (ESCAP), stressed at the opening of the event that the transition of middle-income countries to high-income status while meeting sustainable development ambitions calls for the bolstering of financing for development.
“This calls for domestic policy reforms aimed at expanding fiscal space, maintaining debt sustainability and channelling resources towards productive investments.”
The meeting concluded with the Makati Declaration on Middle-Income Countries, which calls for the UN to support MICs in accessing development financing, including via innovative financing mechanisms, and to provide support in several areas, ranging from programmes and initiatives to mitigate and adapt to the climate crisis to digital transformation and making countries more resilient to global shocks. (see full list of measures below).
“We are re-moulding traditional development partnerships as more MICs, including the Philippines, increase resources for South-South and technical cooperation,” said Enrique Manalo, Secretary for Foreign Affairs of the Philippines.
“This is a trend that, if scaled up, could potentially result in game-changing dividends for the global development system.”
The like-minded Group of MICs are “champions of multilateralism,” he added. “Carving a steady path for all middle-income countries behooves us to support strongly, an international rules-based order underpinned by equity and justice.”
Note to Editors:
The Makati Declaration on Middle-Income Countries states:
- We recognise that middle-income countries experience frequent growth slowdowns, and if left unaddressed, this loss of economic dynamism can cause countries to get stuck in what is referred to as the “middle-income trap,”
- We stress that middle-income countries continue to face specific challenges related to, inter alia, high levels of inequalities, low growth, persistent poverty, unemployment, loss of biodiversity, the adverse effects of disaster risks and climate change, reliance on primary commodity exports, high levels of external debt and the volatility of exchange rates and capital flows, and digital divide.
- MICs will strengthen cooperation among themselves and offer increasing resources under technical cooperation between countries in the global South, which could become particularly important given the recent reduction in development support from traditional donors of the global North.
The list of measures adopted at the High-Level Conference of Middle-Income Countries:
- Productive capacity development
- Human and social development
- Environment and climate change
- Science, technology and innovation and digital transformation
- Inclusive development cooperation
- Global multi-stakeholder partnerships
- South-South and Triangular cooperation (SSTC)
- Measures for sustainable development beyond GDP
- Building resilience to global shocks and multidimensional crises.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org