Helen O'Neill

HICs, MICs, NICs and LICs: Some elements in the political economy of graduation and differentiation

Abstract The demand by industrialized high-income countries (HICs) that the newly-industrialized countries (NICs) should ‘graduate’ out of the so-called Third World by surrendering preferential treatment in HIC markets and by gradually conforming to the rules of GATT is proving to be a contentious issue in North-South relations today. Having examined the concept and components of graduation and the origins of differential and preferential treatment for LDCs in world markets, the paper presents arguments for and against graduation distinguishing between its implications not only for HICs and NICs but also for other middle-income and low-income countries (MICs and LICs). Finally, the paper discusses criteria which might be used in the application of graduation and the countries and products to which itmight be applied.