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The Emerging Middle Class in Developing Countries

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  • Homi Kharas
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    Abstract

    The shift in global goods production towards Asia is well documented. But global consumer demand has so far been concentrated in the rich economies of the OECD. Will that also shift towards Asia as these countries get richer? This paper defines a global middle class as all those living in households with daily per capita incomes of between USD10 and USD100 in PPP terms. By combining household survey data with growth projections for 145 countries, it shows that Asia accounts for less than one-quarter of today’s middle class. By 2020, that share could double. More than half the world’s middle class could be in Asia and Asian consumers could account for over 40 per cent of global middle class consumption. This is because a large mass of Asian households have incomes today that position them just below the global middle class threshold and so increasingly large numbers of Asians are expected to become middle class in the next ten years. The paper explores how this can help sustain global growth in the medium term, driven by product differentiation, branding and marketing in the new growth markets of Asia. La répartition mondiale de la production industrielle en faveur de l’Asie est un phénomène largement démontré. Quant à la demande de consommation mondiale, elle provenait jusqu’ici des économies riches des pays de l’OCDE. Au fur et à mesure que les pays d’Asie s’enrichissent, cette demande de consommation va-t-elle à son tour se déplacer en leur faveur ? Dans ce document de travail, la classe moyenne est définie comme foyers à revenus moyens par tête entre USD10 et USD100, en termes de pouvoir d’achat. En associant des données récoltées lors d’enquêtes auprès de ménages à des projections de croissance dans 145 pays, on s’aperçoit que l’Asie représente moins d’un quart de la classe moyenne d’aujourd’hui. Cette proportion pourrait doubler d’ici 2020. Plus de la moitié de la classe moyenne mondiale se situerait alors en Asie, et les consommateurs asiatiques pourraient représenter plus de 40 pour cent de la consommation mondiale des classes moyennes. Cela est dû au fait qu’un grand nombre de foyers asiatiques perçoive aujourd’hui des revenus les positionnant juste en dessous du seuil de la classe moyenne mondiale. Pour cette raison, il est prévu que, dans les dix prochaines années, de plus en plus d’Asiatiques fassent partie de la classe moyenne. Ce document de travail analyse la manière dont ce phénomène peut contribuer à maintenir, au moyen terme, la croissance globale, qui est provoquée par la différentiation des produits, le marquage et le marketing dans les nouveaux marchés émergents d’Asie.

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    File URL: http://dx.doi.org/10.1787/5kmmp8lncrns-en
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 285.

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    Date of creation: 26 Jan 2010
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    Handle: RePEc:oec:devaaa:285-en

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    Related research

    Keywords: Chile; firm level data; classe moyenne; pays asiatiques; croissance globale; centre de gravité; consommation;

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    Cited by:
    1. Birdsall, Nancy & Lustig, Nora & Meyer, Christian J., 2014. "The Strugglers: The New Poor in Latin America?," World Development, Elsevier, vol. 60(C), pages 132-146.
    2. Syetarn Hansakul, 2010. "Understanding China’s Consumers," Working Papers id:3014, eSocialSciences.
    3. Edward, Peter & Sumner, Andy, 2014. "Estimating the Scale and Geography of Global Poverty Now and in the Future: How Much Difference Do Method and Assumptions Make?," World Development, Elsevier, vol. 58(C), pages 67-82.
    4. Christian MORRISSON & Fabrice MURTIN, 2011. "L’inégalité de revenu moyen entre pays (1700-2030)," Working Papers P25, FERDI.
    5. Sinha, Piyush Kumar & Gokhale, Srikant & Rawal, Saurabh, . "Online Retailing Paired with Kirana – A Formidable Combination for emerging Markets," IIMA Working Papers WP2014-02-09, Indian Institute of Management Ahmedabad, Research and Publication Department.
    6. Xavier Ordeñana & Ramon Villa, 2012. "Mobility and Entrepreneurship in Ecuador: A Pseudo-Panel Approach," Research Department Publications 4783, Inter-American Development Bank, Research Department.
    7. Eduardo Lora & Francesca Castellani, 2014. "Entrepreneurship in Latin America: A Step Up the Social Ladder?," Research Department Publications IDB-BK-124, Inter-American Development Bank, Research Department.
    8. Francisco H.G. Ferreira & Julian Messina & Jamele Rigolini & Luis-Felipe López-Calva & Maria Ana Lugo & Renos Vakis, 2013. "Economic Mobility and the Rise of the Latin American Middle Class," World Bank Publications, The World Bank, number 11858, October.
    9. Zhang Yuan & Guanghua Wan & Niny Khor, 2012. "The rise of middle class in rural China," China Agricultural Economic Review, Emerald Group Publishing, vol. 4(1), pages 36-51, February.
    10. Simon Baptist & Cameron Hepburn, 2012. "Intermediate inputs and economic productivity," Grantham Research Institute on Climate Change and the Environment Working Papers 95, Grantham Research Institute on Climate Change and the Environment.
    11. Cameron Hepburn & Alex Bowen, 2012. "Prosperity with growth: Economic growth, climate change and environmental limits," Grantham Research Institute on Climate Change and the Environment Working Papers 93, Grantham Research Institute on Climate Change and the Environment.
    12. Loayza, Norman & Rigolini, Jamele & Llorente, Gonzalo, 2012. "Do middle classes bring about institutional reforms?," Economics Letters, Elsevier, vol. 116(3), pages 440-444.
    13. Inter-American Development Bank (IDB), . "Entrepreneurship in Latin America: A Step Up the Social Ladder?," IDB Publications 84533, Inter-American Development Bank.
    14. Christian MORRISSON & Fabrice MURTIN, 2011. "Average income inequality between countries (1700-2030)," Working Papers P25, FERDI.

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