Inequalities Across Countries:

The level of inequalities across countries is not only high  but also increasing rapidly. It is said that disparities between poor nations and rich nations have increased  in  the past  two decades. During the 1980s and 1990s, growth  in  developing countries has been highly volatile. There was a slow down  in  growth  rates in  the 1980s in almost all the developing countries. Real per capita GDP in most of the developing countries declined by 0.2% in 1990 and 1991 and  there was a slight increase in subsequent years. The East Asian countries did witness continuous growth in the 1980s but due to the financial crisis of the 1990s, economic growth  in  these countries plummeted. For several developing countries, the 1980s was a lost decade for development. 'In fact, during the 1980s and early 1990s,  the income gap between  rich and poor nations widened at the fastest pace in more than  three decades. The impact of this widening gap is striking' [Todaro and Smith, 20051. The income levels of the ichest 20% of the  world's  population was  30  times larger  than  the poorest  20% in 1960.

Various international agencies particularly the United Nations and  the World  Bank have developed various criteria for classifying countries according to their  level  of development.