•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   
•    EYEWITNESS   

New Delhi. They are every marketing company’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 forecast in the study released on Thursday that the spending power of middle class consumers — anyone consuming between $2 and $20 a day — would increase by eight times in the next 20 years.

“The Rise of Asia’s Middle Class” 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.

They are more likely to be educated, live in urban areas and have fewer children and more progressive values. But they are also prone to over-eating and under-exercising and are keen buyers of cars and household electronics.

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

Not surprisingly, the biggest increase in middle-class Asians, who are estimated to number 1.9 billion now, will be observed in the two Asian giants with the largest populations, China and India.

China has so far been much more successful in elevating poor people, with 817 million, or 63 percent of its population, in the higher category in 2008, reflecting its much larger economy.

India’s middle classes numbered 274 million in the same year, just a quarter of its vast 1.1-billion-strong population, according to data cited by the ADB.

Both countries will have more than a billion people in the higher income group by 2030, though China’s population is expected to be significantly wealthier, other statistics showed.

“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 study.

Rising incomes in Asia are expected to be the main motor for the global economy as Asian consumers buy more refrigerators, cars, cellphones and holidays.

Consumers in the West are in the process of reducing their personal debt and saving more after their borrowing-fueled binge of the past decade, meaning their impact on growth has been reduced.

In contrast, Asian consumer spending was clocked at $4.3 trillion in 2008 and is forecast to grow to $32 trillion in 2030 to reach 43 percent of the world’s total, the ADB said.

“As the region emerges relatively stronger than other parts of the world from the last two years of economic turmoil, it appears set to assume a much bigger role in the global economic structure and recovery,” Lee added.

The social and environment implications of such an explosion of consumerism are significant, however.

Climate change, environmental degradation, competition for water resources and land 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 underlined, 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.

There is also a risk that major economic disruption — another financial crisis, wars or large natural disasters — can reverse the movement of people into higher income categories, it added.

But the trend is clearly positive, with increasing personal wealth creating a virtuous circle of enterprise.

The report cited numerous examples of how companies were increasingly innovating to produce low-cost items for the Asian middle classes, something it dubbed “frugal innovation” exemplified by India’s Tata Nano, the world’s cheapest automobile.
 

Agence France-Presse