In A Nutshell
The term “third world country” was coined shortly after World War II in the face of the Cold War. Contrary to popular belief, “third” doesn’t refer to the lowest economic third or economic status at all. “First world” refers to the US and its allies, the “second world” to the Soviet Union and its allies, and “third world” to all non-aligned countries.
The Whole Bushel
During World War II, the United States and the Soviet Union fought on the same side to prevent Hitler and the Nazis from continuing their genocidal path to world domination. However, once Hitler was eliminated, the economic and political differences between the two superpowers began to surface. The US and its allies formed NATO in 1949 while a few years later, the Soviet led Warsaw Pact aligned the communist countries in Eastern Europe.
Sensing the rift happening in the world, French historian and demographer Alfred Sauvy described all neutral nations as the “third world” in reference to the Third Estate of France. The Third Estate was made up of commoners and was therefore in no position to influence the debate between the First Estate (clergy) and Second Estate (nobles).
Many countries did not ally with either side and remained neutral. Some of these countries were former colonies or were without military or economic resources, essentially disregarded by the superpowers. However, some countries chose not to be officially involved. These countries include Finland, Switzerland, Sweden, Ireland, and Austria. Despite being economically stable and prosperous, these countries are counted as being in the Third World.
While technically under US protection after World War II, Saudi Arabia was a neutral party during the Cold War. Consequently, Saudi Arabia is classified as a third world country, even though Saudis enjoy a relatively high standard of living due to their oil exports.
Since the end of the Cold War and the breakup of the Soviet Union, the term “second world” has become defunct and the term “third world” has erroneously been applied to all poorer nations. The poorest nations are sometimes referred to as “developing countries,” but in recent years, many economists have determined that the economic development in these countries hasn’t contributed to the overall welfare of the people, and this term has lost some popularity as well. The term “majority world” is now the term du jour to describe the poor nations of the world since the majority of the world’s population lives in one of these countries.