Trapped in debt and stagnation, middle-income countries (MICs) are demanding a fairer global financing system to break free from the “middle-income trap.” Leaders made this plea at the High-Level Conference of Middle-Income Countries, held on April 28–29 in Manila, Philippines.
The term “middle-income trap” describes what happens when a country’s growth slows after reaching middle-income status.
Despite earlier progress, many of these countries fail to advance into high-income status. Growth stalls. Inequality deepens. Investment dries up.
Only 27 nations have made it to high-income levels since 2000. Eleven fell back again—some more than once.
POOR, BUT INELIGIBLE FOR AID
Despite moderate national incomes, 60% of the world’s poor live in MICs. These countries are often too rich to qualify for traditional aid—but too poor to fund development alone.
They remain squeezed by rising debt and limited fiscal space. They are unable to invest enough in health, education, infrastructure, or green transitions.
UN ESCAP PUSHES FOR NEW FINANCING MODELS
“This transition to high-income status cannot happen without better financing,” stated Armida Salsiah Alisjahbana. She is the head of the UN Economic and Social Commission for Asia and the Pacific (ESCAP).
She urged countries to reform domestic policies and increase productive investments while maintaining debt sustainability. The message was clear: No sustainable development without fair finance.
THE MAKATI DECLARATION CALLS FOR ACTION
The conference ended with the Makati Declaration, a joint pledge from 24 nations.
The declaration calls on the UN and international partners to:
- Provide innovative financing tools
- Support climate adaptation and resilience
- Bridge the digital divide
- Boost capacity-building and technology transfer
It also urges targeted global support—not one-size-fits-all aid.
SPECIFIC CHALLENGES FACING MICS
The declaration lists major threats holding back MICs:
- High inequality
- Low growth rates
- Persistent poverty
- Unemployment and underemployment
- Overreliance on commodities
- Vulnerability to disasters and climate change
- Digital and technology gaps
- Volatile markets and unstable capital flows
These factors combine to stunt long-term progress—even in growing economies.
SOUTH-SOUTH COOPERATION GAINS NEW MOMENTUM
With aid from the Global North shrinking, MICs are turning to South-South cooperation. “We are reshaping partnerships,” said Enrique Manalo, Philippine Secretary for Foreign Affairs. “Middle-income countries like ours are stepping up, supporting each other with knowledge and technical resources.”
This trend, if scaled up, could reshape the global development architecture.
THE GLOBAL NORTH MUST REENGAGE
While MICs are building new alliances, they still need global support—especially from developed countries.
Speakers called for:
- Redefining aid eligibility
- Green bonds and blended finance
- Debt relief tied to development outcomes
- Increased representation in global financial institutions
“Equity and justice must guide global rules,” the Makati Declaration states.
FINANCING THE SDGS REQUIRES RETHINKING GLOBAL MODELS
Many MICs are central to achieving the Sustainable Development Goals (SDGs). But limited fiscal space and high debt burdens prevent them from investing in education, renewable energy, and climate resilience.
Without structural reform, the SDG dream could become unreachable for millions.
WHY THE MANILA CONFERENCE MATTERS
The Manila summit is more than just another meeting. It’s a turning point. It recognizes that development challenges no longer align with income categories. It also highlights the urgency of building resilience against global shocks—from pandemics to inflation to climate breakdowns.
KEY TAKEAWAYS FROM THE CONFERENCE
- Middle-income countries matter. They drive global trade, house most of the world’s poor, and are critical to climate solutions.
- Old aid models are broken. MICs need custom tools—not outdated income thresholds.
- MICs are not waiting. They’re forming new partnerships, sharing knowledge, and demanding a seat at the table.
- Debt is choking development. Without relief and better financing, MICs can’t deliver for their people.
WHAT COMES NEXT?
The outcomes of the Manila conference will feed into UN platforms like:
- Financing for Development Forum
- SDG Summit
- COP29
- UN General Assembly
Organizers hope the Makati Declaration will be a policy springboard—not a forgotten document.
A SHARED CRISIS NEEDS SHARED SOLUTIONS
Middle-income countries are standing together, demanding the global community listen. Without support, they may slide backwards—dragging global development with them.With reform, they could drive the next wave of global progress.
It’s time to choose.
