Geographies in Depth

The rise of Asia’s middle class

Kishore Mahbubani
Distinguished Fellow, Asia Research Institute, National University of Singapore
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The explosion of Asia’s middle class is stunning. The size of this group currently stands at 500 million and will mushroom to 1.75 billion by 2020 – more than a threefold increase in just seven years.

The world has never seen anything like this before. And it’s little wonder that people all across Asia expect a bright future for their children – according to Pew data, a massive 82% of Chinese respondents expect today’s children to grow up to be better off financially than their parents.

The reason for this is that these Asian societies have begun to implement important reforms: free-market economics; mastery of science and technology; a culture of pragmatism; meritocracy; a culture of peace; the rule of law; plus, of course, education.

We are seeing a tremendous rise in living standards across Asia, with poverty disappearing everywhere you look. In China, for example, since initiating market reforms, more than 600 million people have been rescued from absolute poverty. We see a far greater improvement in living standards within the region than we have seen in centuries. And, through all this, there will be many benefits.

One positive outcome of these changes, for example, is the reduction of conflict within the region. Asia has yet to achieve the Western European gold standard of a zero prospect of war between neighbouring states, but, because of the expansion of the middle class – a population that traditionally reduces the prospect of war – that’s something the region is moving towards.

It’s not all good news, though. The biggest challenge is what this means for the environment: if Asia’s expanding middle-class citizens all aspire to Western living standards through the Western model, the strain placed on the global environment could prove disastrous. Electric power consumption in the US was a staggering 13,395 kWh per capita in 2010; but by contrast, in China and India it was just 2,944 and 626 kWh per capita, respectively.

China and India each have three times the population of the US but a fraction of the per-capita electricity consumption. As Asia’s middle class grows, the hope is that these societies will become ever more responsible in their impact on the environment.

Asia’s leaders recognize they have to find solutions to these issues, so it’s important for developed countries to offer good examples. This is a big challenge for long-term policy developers – if you want the likes of China to emerge as a responsible stakeholder, and one that pays attention to the global environment, you have to show the way through deeds, not words.

One way in which Asia’s middle class can contribute is through the incredible amount of brainpower it can add to the realm of science and technology. Japan’s level of energy efficiency is 10 times higher than China’s, so if lessons can be learned by the latter, and the growing middle class there can contribute to areas such as the study of green tech, it may be possible to create greater economic growth while reducing resource use.

The rise of the middle class, especially in Asia, is one to be embraced. People across the region can see their lives improving by the decade, and Asian societies are experiencing a level of peace and prosperity that they haven’t enjoyed for centuries. If challenges like the environmental question can be addressed, there’s no reason it shouldn’t continue.

This is an extract from the Outlook on the Global Agenda 2014, published this week.

Read a blog on the top 10 trends facing the world in 2014.

Author: Kishore Mahbubani is the Dean of Lee Kuan Yew School of Public Policy at the National University of Singapore, and a Member of the Global Agenda Council on China.

Image: A man looks out of a window in an apartment building in South Korea REUTERS/Lee Jae-Won.

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Related topics:
Geographies in DepthFinancial and Monetary SystemsEconomic Growth
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