Bilhões de burgueses

A nova “Economist” traz encartado um especial sobre “As novas classes médias nos mercados emergentes”, título geral dos mais de dez textos, com pesquisa especial Pew, um perfil de consumo, a aposta de que elas vão reagir à crise etc.

A longa introdução de John Parker traz a foto e descreve a cena de uma multidão diante da loja das Casas Bahias na favela de Paraisópolis, em São Paulo. “Esta é a nova classe média dos emergentes indo às compras.” O texto saúda num dos enunciados, à maneira de Lula, que “pela primeira vez na história mais de metade do mundo é classe média, graças ao crescimento nos emergentes”.

No editorial “Mais dois bilhões de burgueses”, em que cita Karl Marx, a “Economist” avalia que “a ascensão da nova classe média mudou o mundo”, mas: “E se eles mergulharem de volta na pobreza?”. Alerta para o efeito de um “crash” sobre “o progresso feito recentemente em direção à democracia e à estabilidade política”. Texto de Nélson de Sá, coluna Toda Mídia – Folha SP.

The new middle classes in emerging markets

Burgeoning bourgeoisie

Feb 12th 2009
From The Economist print edition

For the first time in history more than half the world is middle-class—thanks to rapid growth in emerging countries. John Parker (interviewed here) reports

foto Financial Times

THE crowd surges back and forth, hands above heads, mobile-phone cameras snapping one of Brazil’s best-known samba bands. It could be almost anywhere in Latin America’s largest city on a Saturday night. But this is Paraisopolis, one of São Paulo’s notorious crime-infested favelas (slums). Casas Bahia, the country’s largest retailer, is celebrating the opening there of its first ever store in a favela (pictured above). It is selling television sets and refrigerators in a place that, at first glance, has no running water or electricity.

Among the shacks, though, rise three-storey brick structures with satellite dishes on their tin roofs. In the new shop, Brazilians without bank accounts—plumbers, salesmen, maids—flock to buy on instalment credit. In a country with no credit histories, the system is cumbersome: the staff interview customers about their qualifications and get them to sign stacks of promissory notes, like post-dated cheques, before allowing them to take their purchases home. But it works, more or less. According to Maria, a cleaner, “Everything I have comes from Casas Bahia. Things are very expensive but the means of payment are better for people like us, without any money.” This is the emerging markets’ new middle class out shopping.

Eduardo Giannetti da Fonseca, one of Brazil’s most distinguished economists, describes members of the middle class as “people who are not resigned to a life of poverty, who are prepared to make sacrifices to create a better life for themselves but who have not started with life’s material problems solved because they have material assets to make their lives easy.” That covers a broad range of ambitions, as two other examples will show.

Back in 1992 Lu Jian was a dissatisfied mid-level bureaucrat at China’s department of transport and communications who became surplus to requirements. Taking advantage of government measures that encouraged such officials to go into business, he went off for a stint at China’s first commodity-futures trading company. Soon afterwards he found himself designing the country’s first ski resort, near the northern city of Harbin. Now, as chairman of the Nanshan Ski Village, in the desert hills near Beijing, he presides over the capital’s main winter-sports recreation ground.

This season 3m Chinese will take up a sport that was unavailable in the country only 15 years ago. China has around 300 ski runs, including some in the subtropical south where skiing is done indoors. Even in freezing Nanshan, snow is manufactured from wells deep underground. “When the Chinese first got rich,” says Mr Lu, “they wanted to go to Thailand and South Korea. Now they want to go skiing.” Every weekend the resort is packed with IT executives, bankers and media glitterati. This is the emerging markets’ new middle class at play.

In December 2008, a week after the terrorist attacks in Mumbai, thousands of young, English-speaking professionals gathered in Mumbai, New Delhi, Bangalore and Hyderabad. They were demanding a new security law and a ban on criminals holding parliamentary seats, as well as urging people to vote. India’s professional classes have long been considered indifferent to politics and less inclined to vote than the poor. Yet suddenly social-networking sites were full of memorials to the victims and proposals for further action: vote, don’t vote, withhold taxes, join a new party. “Those laid-back, lethargic, indolent middle classes—they’ve been galvanised,” says a former advertising executive.” This is the emerging markets’ middle class engaged in politics.

So much to do

“We expect a lot from the middle classes,” say Abhijit Banerjee and Esther Duflo, of the Poverty Action Laboratory at the Massachusetts Institute of Technology. Following the historical examples of Britain and America, they are expected to be the dominant force in establishing or consolidating democracy. As a group, they are meant to be the backbone of the market economy. And now the world looks to them to save it from depression. With the global economy facing the biggest slump since the 1930s, the World Bank says that “a new engine of private demand growth will be needed, and we see a likely candidate in the still largely untapped consumption potential of the rapidly expanding middle classes in the large emerging-market countries.”

This special report will assess these expectations. It will argue that many of them are broadly justified; that there is indeed something special about the contribution the middle classes make to economic development that goes beyond providing a market for Western consumer goods. The middle classes can, and sometimes do, play an important role in creating and sustaining democracy, though on their own they are not sufficient to create it, nor do they make it inevitable. On balance, the report is optimistic about the prospects of countries where the middle classes are growing. But they are not a homogeneous group, so their impact varies. A middle class that has grown largely to tend to the state will behave differently from one that is based on the private sector.

The one-third rule

But who, as a patrician British prime minister, Harold Macmillan, once loftily asked, are these middle classes? Their members are neither rich nor poor but somewhere in-between. In countries long divided between lord and peasant, that has large consequences. “Middle-class” describes an income category but also a set of attitudes. In the words of Shashi Tharoor, an Indian commentator, it is a category “more sociological than logical”.

An essential characteristic is the possession of a reasonable amount of discretionary income. Middle-class people do not live from hand to mouth, job to job, season to season, as the poor do. Diana Farrell, who is now a member of America’s National Economic Council but until recently worked for McKinsey, a consultancy that has spent a lot of time studying the middle classes, reckons they begin at roughly the point where people have a third of their income left for discretionary spending after providing for basic food and shelter. This allows them not just to buy things like fridges or cars but to improve their health care or plan for their children’s education.

Usually, an income of that size requires regular, formal employment, with a salary and some benefits, that is, a steady job—another key middle-class characteristic. The income needed to have a third of it left over after meeting basic needs also varies from place to place. In China, for example, $3,000 a year may be enough in Chongqing or Chengdu, big cities in the west, but not in Beijing or Shanghai. So defining the middle class in absolute terms is hard (see article).

In practice, emerging markets may be said to have two middle classes. One consists of those who are middle class by any standard—ie, with an income between the average Brazilian and Italian. This group has the makings of a global class whose members have as much in common with each other as with the poor in their own countries. It is growing fast, but still makes up only a tenth of the developing world. You could call it the global middle class.

The other, more numerous, group consists of those who are middle-class by the standards of the developing world but not the rich one. Some time in the past year or two, for the first time in history, they became a majority of the developing world’s population: their share of the total rose from one-third in 1990 to 49% in 2005. Call it the developing middle class.

Using a somewhat different definition—those earning $10-100 a day, including in rich countries—an Indian economist, Surjit Bhalla, also found that the middle class’s share of the whole world’s population rose from one-third to over half (57%) between 1990 and 2006. He argues that this is the third middle-class surge since 1800. The first occurred in the 19th century with the creation of the first mass middle class in western Europe (see chart 1). The second, mainly in Western countries, occurred during the baby boom (1950-1980). The current, third one is happening almost entirely in emerging countries. According to Mr Bhalla’s calculations, the number of middle-class people in Asia has overtaken the number in the West for the first time since 1700 (see chart 2).

In many emerging markets the middle class does not grow incrementally, in line with, say, economic growth. It surges. Chart 3 below shows why. The vertical line represents an income of $10 a day, which is where Mr Bhalla considers the middle class to start. In 1980 there was hardly anyone beyond that line. The lop-sided bell shape represents the distribution of income in a country (in this case, China) with a tail of poor people on the left, a longer tail of rich ones on the right and a bulge of people on average incomes in the middle.

As the economy grows, the bell moves to the right and as it meets the threshold, a great whoosh of people cross into the middle class. In reality, growth may be even faster because the shape of the bell has been changing. According to new research by Martin Ravallion, the director of the World Bank’s development research group, income distribution in developing countries started to shift between 1990 and 2005. The bulge in the middle of the range got bigger, making the bell taller, so the middle class is growing even faster.

At a certain stage it starts to boom. That stage was reached in China some time between 1990 and 2005, during which period the middle-class share of the population soared from 15% to 62%. It is just being reached in India now. In 2005, says the reputable National Council for Applied Economic Research, the middle-class share of the population was only about 5%. By 2015, it forecasts, it will have risen to 20%; by 2025, to over 40%.

Sweet spot

Homi Kharas, of the Brookings Institution, a think-tank in Washington, DC, argues that the point at which the poor start entering the middle class in their millions is the “sweet spot of growth”. It is the moment when poor countries can get the maximum benefit from their cheap labour through international trade, before they price themselves out of world markets for cheap goods or are able to compete with rich countries in making high-value ones. It is also almost always a period of fast urbanisation, when formerly underemployed farmers abandon what Marx called “the idiocy of rural life” for the cities to work in manufacturing, boosting their productivity many times over. Eventually this results in a lessening of income inequalities because the new middle class sits somewhere between the rich elite and the rural poor.

The surge across the poverty line is a period of accelerating growth both for the new middle class and for the country it inhabits. That should continue for a couple of decades. By most estimates, the global middle class will more than double in number between now and 2030. This will have profound social consequences, as happened in previous middle-class surges.

Close to the creation of the world’s first mass middle class in early 19th-century England, Thomas Malthus (the political economist who scared the world with his forecasts of overpopulation and food shortages) wrote that “it is probable that extreme poverty or too great riches may be alike unfavourable [to furthering the progress of mankind]. The middle regions of society seem to be best suited to intellectual improvement.”

Marx, who admired Malthus, was equally astonished by the emergence of the middle class. As he wrote in the “Communist Manifesto”:

Historically it has played a most revolutionary part. The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations…It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals…The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country…All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life-and-death question for all civilised nations…In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes…National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures there arises a world literature. The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation.

By Jim O’Neill – Financial Times

Published: November 27 2008 18:59 | Last updated: November 27 2008 18:59

For much of the past three years, as it became evident that the US housing bubble was bursting, I believed that the old adage “the US catches a cold, the world catches pneumonia” would be laid to rest, helped by the emergence of the so-called Brics – Brazil, Russia, India, China.

Until September and the collapse of Lehman Brothers, the US investment bank, this was still a reasonable model for the evolving world. However, since mid-September maybe the real question has – unfortunately – become: “What happens if the US itself has caught pneumonia?”

At the heart of this is the dramatic tightening of US financial conditions that took place from mid-September until recently. For the over-levered US consumer, coming on top of declining housing values, the era of buoyancy is almost definitely over.

At its 2007 peak, US domestic consumption reached as much as 72 per cent of the country’s overall gross domestic product, which is more than 20 per cent of global GDP. Not bad for a population of some 300m people, out of more than 6bn globally. By the end of 2008, consumption will be back below 70 per cent and will probably be on its way down to something around 65 per cent or less in a few years. How can the world cope?

The answer is that unless Chinese, German and Indian shoppers start spending more freely, it will not.

Aggressive infrastructure-based fiscal expansion in the US from the incoming administration will help the country recover and rebuild but, as with the UK, there has to be a chance that any direct stimulus for the indebted US consumer will be saved, not spent. Indeed, it is no bad thing that domestic private savings will be rebuilt. Among other things it means the US will not need to keep gobbling up the world’s savings.

To avoid global pneumonia, what we need is shopping in Berlin, Frankfurt, Beijing, Shanghai, Delhi and Mumbai. Here is how to do it.

China looks like it does not need too much guidance judging by the media focus on its $586bn (€453bn, £380bn) “stimulus” package. China has to regard export strength, especially low-valued exports, as a thing of the past. This will involve some redeployment of people, which in some regions could be quite challenging. But boosting domestic spending, especially for consumption and investment, is vital.

Such spending should feed through to renewed import growth, so China can help offset the end of import growth in the US. Of course, annual retail sales growth as measured by October’s numbers was a strong 22 per cent but, until consumption represents a bigger share of GDP, the government should seek to increase this further. Noises about the potential development of a proper nationwide social security system are encouraging; this is vital to reduce China’s huge savings rate.

As for India, its demographic dividend makes it arguably the most interesting of the Brics in the next decade. According to the United Nations, by 2020, India’s population could grow by as much as the current size of the US. If Indian policymakers can boost infrastructure spending, the escalating urbanisation that will accompany this could unleash massive consumption. Indian policymakers should stop worrying about the May 2009 election and introduce steps now to allow more foreign capital to help the financial sector fulfil these exciting prospects. Among other things it would diminish fears about India’s external financing challenges also.

It is not just India and China that could help. Germany and its policymakers should take a long, hard look in the mirror. At 85m, Germany’s population is equivalent to more than a quarter of that of the US. It needs to make a contribution to world consumption in a similar ratio, relative to that of the US consumer.

Next year is the 20th anniversary of the fall of the Berlin Wall. German consumption has barely budged since then. Why not celebrate by giving its people a surge in consumer spending? Raise real wages and cut value added tax: Germany owes it to itself and the world after such a long period of adjustment to both unification and European monetary union. It certainly needs to, as the export machine is set to struggle.

Who knows, if Germany “gets it” maybe even Japan might then consider change. Then we would know the world really was being turned upside down.

The writer is chief economist at Goldman Sachs

Xangai (26/03) – A ministra do Turismo, Marta Suplicy, e o secretário de Turismo de Xangai, Dau Chu Ming, estabeleceram, em reunião realizada hoje, a cooperação do órgão de turismo da cidade com o Ministério do Turismo brasileiro no desenvolvimento de um programa para capacitar cozinheiros brasileiros a produzirem os pratos da tradicional culinária chinesa. O encontro foi mais uma atividade da agenda da ministra, em sua visita oficial à China.

“A capacidade brasileira de aumentar sua oferta de restaurantes de culinária chinesa, com qualidade e produção compatíveis com o que se faz hoje nos melhores restaurantes das cidades da China, deve ser mais um importante elemento de diferenciação e aumento de nosso potencial de atração do turista chinês”, avaliou a ministra Marta Suplicy. Segundo ela, o número de visitantes que o Brasil recebe da China vem aumentando a cada ano, assim como é crescente o contingente de turistas chineses que viajam pelo mundo. Em 2007 foram 44 milhões.

“O Brasil disputará uma maior parcela desse mercado oferecendo não somente sua grande variedade de destinos, como também serviços diferenciados e de qualidade. A comida sempre ocupa lugar relevante entre os elementos de decisão para viagens e os chineses demandam uma melhor oferta da sua culinária nos paises que visitam”, acrescentou a ministra.

Durante a reunião, ficou acertado que as áreas técnicas do MTur e da Secretaria de Turismo de Xangai manterão contatos nas próximas semanas para definir a forma como será desenvolvido esse importante programa de qualificação profissional, seja por meio da ida de mestres da culinária chinesa para ministrar cursos no Brasil ou por outras formas que se julgar eficientes. Uma outra ação será o incremento da troca de informações sobre os mercados turísticos dos dois países, que será conduzido pela Embratur e por autoridades de turismo de Xangai.

Ainda nesta quarta-feira a ministra visitou e manteve reunião de trabalho com o Comitê Organizador da Expo Xangai 2010. Marta Suplicy foi recebida pelo vice-presidente do Comitê Organizador da Exposição Mundial de Xangai, Huang Jianzhi, e pelo diretor do Departamento de Participantes Internacionais, Xu Bo, responsáveis pela organização da exposição naquela cidade.

A Expo 2010 faz parte do calendário de Feiras Mundiais (World’s Fair), eventos que ocorrem periodicamente desde o século XIX, e que reúnem expositores de diversos países para exibir novidades em diferentes áreas. Trata-se do terceiro maior evento internacional, em termos econômicos e culturais, sendo precedido apenas pela Copa do Mundo da FIFA e pelos Jogos Olímpicos.

A expectativa do Comitê Organizador é que a exposição conte com a participação de mais de 29 organizações internacionais e 167 países (dentre eles o Brasil, que ainda não definiu o tema de seu estande), atraia cerca de US$ 3 bilhões em recursos e receba em torno de 70 milhões de visitantes.

Para construir o local da exposição o governo de Xangai escolheu uma área de 5.28 Km2 no centro da cidade, onde cerca de oito mil residentes e 272 empresas estavam instalados em condições precárias. O governo local comprou a área e relocou os antigos moradores e empresas para duas áreas residenciais, com melhor estrutura e maior metragem quadrada, oferecendo condições especiais de compra.

Os representantes do Comitê Organizador apresentaram à ministra Marta Suplicy o projeto adotado para o desenvolvimento da rede de transporte terrestre da cidade. Estão em construção mais três novas linhas de metrô, que totalizarão, até 2010, mais 166 km e 110 estações à rede hoje existente, que já conta com 234 estações de metrô. A ministra pôde conhecer também os projetos de capacitação dos diversos setores que estarão envolvidos nos receptivos dos turistas que visitarão a EXPO 2010.

Com o desafio de realizar a Copa do Mundo de Futebol, os programas desenvolvidos em cidades como Beijing e Xangai, que sediarão dois grandes eventos internacionais, são uma referência importante no planejamento brasileiro para 2014. Fonte MinTur.

Despite the global interest in the rise of China, no one is paying much attention to its ideas and who produces them. Yet China has a surprisingly lively intellectual class whose ideas may prove a serious challenge to western liberal hegemony

Mark Leonard is the executive director of the European Council on Foreign Relations. His book What Does China Think? has just been published by 4th Estate

I will never forget my first visit, in 2003, to the Chinese Academy of Social Sciences (CASS) in Beijing. I was welcomed by Wang Luolin, the academy’s vice-president, whose grandfather had translated Marx’s Das Kapital into Chinese, and Huang Ping, a former Red Guard. Sitting in oversized armchairs, we sipped ceremonial tea and introduced ourselves. Wang Luolin nodded politely and smiled, then told me that his academy had 50 research centres covering 260 disciplines with 4,000 full-time researchers.

As he said this, I could feel myself shrink into the seams of my vast chair: Britain’s entire think tank community is numbered in the hundreds, Europe’s in the low thousands; even the think-tank heaven of the US cannot have more than 10,000. But here in China, a single institution—and there are another dozen or so think tanks in Beijing alone—had 4,000 researchers. Admittedly, the people at CASS think that many of the researchers are not up to scratch, but the raw figures were enough.

(mais…)

A cidade de Shanghai está cheia de cartazes, outdoors, painéis luminosos e propaganda.

Em Shanghai, este ano completam a construção de 200 Km de metrô e para 2010 a meta é chegar a 400 km, ou seja mais 200 km de metrô em 2 anos.

Já em São Paulo, a prefeitura tirou toda a publicidade das ruas. Até agora o governo estadual acrescentou nos últimos 13 anos menos de 10 km de metrô. O metrô de São Paulo tem 60 Km.