This has come from a misunderstanding in what the Third World means. It actually refers to the fraction, ie a third of the world lives in these conditions of poverty. The French term is Tiers-Monde (tiers = one-third) rather than troisi�me (ordinal number third) and this has been mistranslated.
Yes, 2nd world nation-states are commonly referred as the previoust soviet blocs which had "backwards economies." They didn't live in destitution, but also not in the first-rate living of the first world.