ADB study profiles booming middle class

NEW DELHI — They are every marketeer’s dream and the future of the world economy — now, Asia’s aspirational middle classes have been laid bare in a major new study focusing on their astonishing growth.

The Asian Development Bank (ADB) forecast in the research released Thursday that, over the next two decades, another 800 million people will make the transition from poverty to the middle class, assuming economic development continues.

Their elevation “may present many challenges, but it will also open up new and unprecedented opportunities for the region and for the world,” the ADB concluded.

The study, “The Rise of Asia’s Middle Class,” also sought to shed light on the characteristics of this burgeoning cross-section of society, concluding that they share many traits with their counterparts in the wealthy West.

The Asian middle classes are likely to be educated, live in urban areas and have fewer children and more progressive values.

But they are also prone to overeating and under-exercising, and are keen buyers of cars and household electronics.

“Projections suggest that, by 2030, much of developing Asia will have attained middle class and upper class status,” said ADB chief economist Jong-Wha Lee in the foreword to the study.

The report defined the middle class as those people consuming between $2-$20 a day, and looked at “developing Asia” — 22 countries including the Philippines, China, India, Indonesia, Laos, Malaysia, Thailand and Vietnam, but excluding Japan and South Korea.

Rising incomes are expected to be the main motor for the global economy as consumers buy increasing numbers of refrigerators, cars, mobile phones and holidays.

Consumer spending in the region was clocked at $4.3 trillion in 2008 and is forecast to grow eight times to $32 trillion in 2030.

At this level, it would account for 43% of the world’s total consumption, the ADB said.

“Asia will play a primary consumer role in the future, switching from a major global producer to a major global consumer,” Mr. Lee told reporters.

Such an explosion of consumerism carries significant social, political and environmental implications.

Climate change, environmental degradation, competition for water resources and land use pressures are just some of the potential downsides of the rise of vast numbers of people seeking the material comforts familiar in the West.

There are also major public health considerations, the ADB said, with the Asian middle classes already showing signs of adopting entrenched Western habits of eating food that is high in calories and fat. Diabetes, heart disease and cancer are on the rise.

“All indications are that in the next 20-30 years, Asia will be faced with an increasing number of chronic diseases on a scale previously unseen,” the report said.

But the overall trend is positive from an economic perspective, the bank said, with increasing personal wealth creating a virtuous circle of enterprise.

There are also political implications for governments, which must satisfy the clamor for better public services and transparency from wealthier citizens who are more likely to be politically engaged. — AFP