Starting perhaps around the middle of the last century, when the Cold War between the Western capitalist and Eastern socialist camps was spiraling upward, there came along the notions of roughly “dividing” the countries into three groups.
There were the First World countries, which comprised mainly of old colonial powers of the West, from Europe to America and included even some former colonies such as Australia and New Zealand, with capitalism (some albeit with an element of socialism) as the main stay of their economy and society. There were also the Second World countries, which were mainly those from the Soviet and communist blocs; they were politically and socially no doubt repressive, but also boasted of tremendous industrial and scientific achievements. After all, the Soviets beat the Americans in sending the first astronaut into space.
Then there were the Third World countries, mostly former colonies around the world, which had just achieved their respective degrees of independence. “Respective,” because in some cases, such as with many Pacific and Caribbean islands which were former British colonies, the British Monarchy was retained as their head of state, some all the way until the present. These new countries, having freshly freed themselves from the shackles of colonialism, were in a sense supposed to be neutral in both their domestic political and social undertakings, as well as their external diplomatic and strategic outlooks. Most of them even formally grouped themselves into the much hyped but in actuality quite content-empty Non-Aligned Movement.
In practice, however, many of these Third World countries inevitably toyed with socialism or leaned toward the Soviet bloc. India, for example, paid lip service to market economy for many years and was chummy with the Soviet Union. The former Yugoslavia, though alienating itself from the Soviet Union, was decidedly socialistic in their domestic affairs. Myanmar (known as Burma then) also practiced socialism when the military took over the government, inviting sanctions from the First World countries. Some Middle Eastern countries such as Egypt, Syria and Libya crafted an Arab variant of socialism, spiced with much nationalism and revivalism. And quite a number of African Third World countries also experimented with various shades of socialism both domestically and externally, some with a splash of lingering tribalism.
Sympathetically speaking, the elites of these Second World-leaning Third World countries believed they have good reason to do so, at least socio-economically.
The economies of these former colonies were typically in bad shape, after having been exploited by their former colonial masters for decades, if not centuries. These elites were perhaps swept up by the socialist euphoria at the time, naively thinking that with essentially equal distribution of their respective nations’ wealth to the common folks, the latter’s livelihoods could be much improved, and in some cases even accelerated to being comparable with Second World level. The focus was more on redistribution rather than creation of wealth. But their socialist dreams typically did not materialize, as very often the eagerness to pursue economic uplift by means of sheer will for the common good and equality ended up with mediocrity, inefficiency and, alas, shattered economy.
But there were also many other Third World countries which chose to lean more toward the First World system. These included the many maritime Southeast Asian countries, including both the Philippines and Malaysia, as well as their East and Northeast Asian neighbors. Situated at the crossroads of the busiest shipping routes, these Southeast Asian countries necessarily relied on trade and investment as the priority for their economic development. As such, they must embrace the Western or First World-oriented market economy. And indeed, they were successful in riding on the coat-tails of the First World. The legendary Asian Dragons (Taiwan, Singapore, Hong Kong and Korea) and Tigers (Malaysia, Thailand, Indonesia and the Philippines) were thus born, bringing about both stability and prosperity to a region still stricken with poverty.
The Berlin Wall dividing the East and West fell a decade before the end of the last century, and with it the Cold War also thawed. The collapse of the Soviet Union cemented this warming up. The previously much brandished-about notion of the three worlds also lost most of its shine. The relatively new terminologies which were being introduced at about the same time (or perhaps slightly beforehand) were “developed” versus “developing” countries, tailed by the least developed countries (LDC).
These were strictly economic distinctions with various socioeconomic metrics to be measured and compared. Gone were the ideological bent in the First versus Second versus Third Worlds classifications.
International groupings such as the G20 or G7 (sometimes G8) became fashionable, for developed and developing countries alike. In the current worldwide economic maelstrom, economic development indeed became the prime concerns for most responsible nations. However, the plight of the LDC, which was bad enough during the best of economic times, remains resolutely intractable, and looks set to linger for a long time to come.