Surging BRIC middle classes are eclipsing global poverty
By 2022, those living in poverty will be a minority for the first time, as the global middle class – particularly from BRIC (Brazil, Russia, India, China) nations – surges. Does new affluence signal shifting global power?
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That's a sneak preview, he says, of what lies ahead for developing countries – particularly the awakening giants of the middle class: Brazil, Russia, India, China, and South Africa, the so-called BRICS economies.Skip to next paragraph
In Pictures The Rising Global Middle Class
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Far from Rio de Janeiro's beaches and boutiques, Shopping Jardim Guadalupe is emblematic of the global economic boom fueled by Brazil, India, and China. "I want your store in my mall," reads a recent ad for the megacomplex due to open in November. It will be a hub of middle-class aspiration with not just a food court, eight anchor stores, six "megastores," and 250 smaller shops, but also a university, private high school, gym, medical center, movie theaters, and a bowling alley. More than 84 percent of the property has been sold.
Millions have long lived in Rio's poor suburbs, but only recently have they had enough money to attract a mall developer. From 2003 to 2008, 24 million people left poverty in Brazil, where the middle class now accounts for more than half of its roughly 191 million citizens. At home, they enjoy color TVs, refrigerators, washing machines, and vacuum cleaners. Half have a computer; more than a third have Internet access.
Estimates of just how big China's middle class is range widely from a low of 157 million (which would be second only to the US) to more than 800 million. With such a large middle class driving consumption, China has seen an average 15 percent growth in retail sales in recent years and is already the world's largest market for cellphones and cars (in 2009 passenger car sales increased 53 percent). India's middle class is projected by the NCAER to grow by 67 percent in the next five years, to 267 million people, or nearly a quarter of its population.
What's driving this bulge? State policies such as Brazil's increased minimum wage and India's reduced tax rates have boosted incomes. Foreign investment is giving more people salaried jobs, and those in turn are driving demand for everything from mechanics to more fashionable clothes, says economist Homi Kharas of the Brookings Institution in Washington. And more are getting better education.
That presents opportunities both for local entrepreneurs and multinationals – and could change the products available to the West.
Last year, Levi's specifically targeted Asians with its launch of dENiZEN, a new line for the "global citizen" complete with pink T-shirts that say "Chase Your Dream." In a reversal of the usual currents of global markets, dENiZEN will come to the US this summer, where Target will carry a line adapted for Americans.