The newly emerged middle class are trailblazers in their own nations and represent, on a massive scale, agents of global economic transformation. Their effect on the global economy is already starkly apparent in the seismic shift in global economic gravity over the past few decades.
Due to a myriad of factors, greater trade and investment flows, urbanization, expanding labor forces, rising wages, infrastructure spending, rising life expectancies, political stability, prudent macroeconomic management and, of course, the emerging middle classes of many developing nations, the world has been turned upside down. As recently as 1980, the world economy beat to the tune of the United States in particular and the developed economies in general. The West towered over the Rest.
But, currently the tables have turned. According to the International Monetary Fund, where the developing nations accounted for roughly one-third of world GDP in 1980, this cohort now accounts for over 55% of the global total, with China, the world’s second largest economy, leading the way. By pumping millions of new workers into the global labor force over the past three decades, China and other developing nations have dealt both a supply-side shock (more workers) and demand-side shock (more consumers) to the world economy.
Much of the economic narrative over the past few years has been focused on the former, notably in many developed nations, the United States included, where the common refrain is that the rising supply of workers in the developing nations has undermined the jobs and incomes of workers in the West. To a degree, this is true, although many empirical studies suggest that more United States jobs have been lost to automation and technological advances than to low-cost labor in Mexico or China. The more salient point is that the millions of workers in the emerging markets are also consumers, with more disposable income than their parents or grandparents ever had.
While the spending power of the West has been diminished by the United States-led financial crisis and ensuing austerity in Euro zone area of the European Union, the purchasing power among developing consumers is on a secular upswing. Where in the past factory workers in Asia would trudge off to work on Saturday morning, today they are more likely to head for the local shopping malls for a day of socialising and shopping.
Any first-time visitor to the emerging cities of Shanghai, Dubai, Mumbai, Ho Chi Minh City, Istanbul and Sao Paulo is struck by the vigor and vitality of the local consumer, out in force and shopping in an air-conditioned mall that might be mistaken for a mall in suburban America. The size and scale of these urban buyers and their pent-up demand for electronic goods, appliances, automobiles, skin-care products, clothing and other goods are increasingly setting global trends. Emerging market consumers are leading in global fashion and driving global sales in a number of industries.
Indeed, in a seminal shift, global consumption is tilting toward the developing nations and away from the United States and the West. According to both the recent UNDP and IMF documents, the gap in global personal consumption is narrowing in favor of the developing nations. Where the spread was roughly 80:20 in favor of the developed nations in 1980, the spread has now narrowed to roughly 60:40. And the will have little doubt that in the not-too-distant future, the lines will cross, with the newly emerging middle class poised to take the global baton of consumption from consumers in the West.
And as the emerging market middle classes consume more, world trade flows are being altered. According to the IMF, a shift in world imports is well under way, with the developing nations’ share of world imports reaching a record 56% last year, totalling a record $10.5 trillion. Again, in just a matter of years, the lines are set to cross and imports from the developing nations, led by rising purchases of goods and services from the middle class are set to easily supersede those of the developed nations.
The aftershocks from the rise of the middle class in the developing nations are evident in various guises. Their pent-up demand for electronic goods, appliances, automobiles, skincare products, clothing and other goods has reached the point where emerging market consumers are now dictating the global revenues and profitability of these industries and others.
In addition, as the new global consuming class adopts and acquires Western lifestyles, moves from the village to the city, works in air-conditioned offices, drives to work, consumes more protein, there will be greater demand and higher prices for energy, water, agricultural goods and other natural resources. Put in another way, the monopoly the West has long enjoyed in devouring the world’s natural resources is over.
For much of the post-Cold War era, the equation was rather simple. The developing nations produced commodities and the West consumed them. Those days however, are past. Millions of the new middle class consumers are pressuring the global commodity infrastructure. There is a dramatic shift in underlying demand for global energy, with the developing nations clearly now the global drivers of energy demand and prices.
According to the IMF, the same holds true for the global consumption of meat, fruits and vegetables, with the developing nations, driven by a more affluent emerging market consumer, already out-consuming the developed nations. Pick virtually any commodity and the story is basically the same. Copper, silver, iron ore, meat, corn, wheat, soybeans, the future price of these commodities and others will increasingly reflect the rising per capita incomes and attendant jump in consumption among consumers in the developing nations. In the end, the world has changed. In the years ahead, the global economy will increasingly beat to the tune of millions of other middle-class consumers.
Emerging market consumers and global economic transformation
Against Gravity
Eight young photographers gathered their pieces at the Goethe-Institute Addis Ababa completing their six month mentorship program by established artist Michael Tsegaye. Focusing on the Identity, change and personal elements the emerging photographers produced a lot of creative work during thie program.
“The mentorship inspired me to do more,” said Michael. “Watching them supporting each other and ending up being friends surprised me.”
The Institute which received 30 applicants for the program picked 12 young artists to attend the mentorship but four dropped out. The eight emerging photographers, Abdi Bekele, Addis Aemero, Bemnet Fekadu, Brook Getachew, Firehiwot Gebrealu, Meseret Argaw, Obsa Zerihun, and Solomon Nigus, all completed the project and have new material to work with.
Trainees wen’t through group and individual education on practical and theoretical processes.
CPE is a program for training, discussion, collaboration and conversation for emerging Ethiopian photographers that was recently founded by Maheder Haileselassie, a photographer. The program is jointly organized by the British Council, Goethe-Institute and Ice Addis, funded by the European Commission.
Organized by Center for Photography in Ethiopia (CPE) the mentorship program was launched on September 25 and will continue for one more month.
The Art of Wine
A Wine tasting festival consisting of five courses will be launched at the Radisson Blu, Addis Ababa next month. Organized by the French Embassy the special occasion will be led by experts from France. The course is expected to deepen people’s appreciation both for wine and the wine makers, according to the organizers.
Registration is open and costs 1000 birr per class.
Lachu the country dentist
Years back a friend of mine (a diaspora guy) had to travel to Lalibela, a tourist site in Amhara, to visit the famous rock-hewn churches. It was here he happened to bear witness of an occurrence. This happening was captured by him from the verandah of his two-story hotel. It was this way he recounted the incident to us, his friends.
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I was watching the scene of Lalibela Town from the verandah of my hotel the very day I arrived. People were moving here and there. Bajajs, the three-legged cabs were roaring monotonously across the roads. I could also observe while carts, pulled by horses, were rumbling sluggishly on cobble-stoned and broken asphalt roads which were dotted with potholes.
Down there, beneath the verandah, at the back yard of the hotel compound, I could see people strolling around. Some of them seemed to be workers of the hotel. There were other peple standing around as well. One of these people was a grownup man. He was standing alone in the middle of the compound with his face turned towards the hotel building. He was wearing a big overcoat with white color changed in to a kind of gray. I could also see his coat spotted with droplets of blood. The guy looked like a butcher. It was so simple to assume that. He was holding a pair of pincers with his right hand.
Suddenly I heard sounds of voices and commotion which were followed by another sounds of footsteps of some people who approached the man carrying a stretcher. It is a kind of stretcher used to carry construction materials like sand, cement, pebbles… Two young ladies who held the stretcher from either side put it cautiously on the ground in front of the big man. The surprising thing was that a little girl was laying on the stretcher. She was crying and mumbling words, wriggling and squirming on the stretcher.
“Emaye! … I don’t need it! Ehhhh …!” Her flaxen hair spread out on the stretcher.
“Do tie her limbs up! Why are you staring at me like that? Do I look like a monkey?! Come on! Tie her up! Hurry up!” He commanded in a loud voice.
One of the ladies untied her waist-band and passed it over to the other lady who tied up fast the limbs of the little girl with. I thought the lady who untied her waist-band could be the mother of the crying girl.
“Emaye!… I don’t need it! Oh… emayiyeeee!”
The big shot bowed down and forcefully opened the mouth of the little kid wide enough to insert that blood-stained pair of pincers. I took an interest in his work and glued my eyes watching what he was doing. The two ladies were holding the head of the little girl firmly so that she could not wiggle and disturb the work of the big man… Now the little girl stopped crying. It looked as if she dozed off. She closed her eyes which were soaked with tears.
The big guy kneeled and started searching for something in his breast pocket. He produced a piece of wooden slab which he inserted in to the mouth of the little girl. I thought he was going to use the slab to keep open the mouth of the little girl. He continued searching and pocking in to the mouth of the kid. He then twisted the pair of pincers sideways trying to grope for something. Then, he bit his lower lips tightly and pulled out a tooth (milk-tooth) of the little girl. The tooth soaked with blood! The poor kid was wriggling and crying. The big shot looked at the pair of pincers which was soiled with fresh blood.
Immediately after, I could see blood gushing out of the mouth of the poor kid. As she was tied fast like a helpless animal, she could not do anything to her capacity to protect herself from the ferocious pair of blood-doused pincers. The only thing she could do was cry and cry.
A couple of minutes later, the guy put up his pair of pincers that clinched the small milk-tooth. He showed it boisterously to the people surrounding him. It seemed he regarded himself as a vet technician who operated on a lion. Then, he shrouded the milk-tooth with a scrap of paper and handed it over to the lady by instructing her to throw it on the roof of her house so that birds could pick it up. This way it is believed commonly that the missing milk-tooth will soon be replaced by a new and strong one. Then, the man cleaned his blood-stained pair of pincers using the inner part of his overcoat. He produced a dirty piece of cloth from his pocket and wiped his hand and face.
“Now you can carry her away. Give her hot beverages… like oat. Don’t forget to let her gurgle her mouth with arakie every morning (home-made strong alcoholic beverage),” so saying, he called the next kid to perform his rustic dental surgery.
I could not believe my eyes. It was too tough for me to see such atrocity. What I could do on the dot was crying, calling over the guy down there to stop doing this cruelty and go away.
No sooner had I done that than walking to a police station which was not very far from the hotel. I reported the incident to the chief police officer. The aged police officer looked at me in a strange manner and said that the tooth pulling activity was practiced by an individual named Lachu.
“What you saw is the work of Lachu. He is our country dentist. He pulls out milk-teeth of little boys and girls in this area.” The chief police officer did not show any concern about the incident I told him about.
“Are you telling me such rustic dental treatment is practiced in this town?” I was surprised by the police man.
“That’s what I am telling you, city boy!”
Then, he summoned a young police officer and commanded him to accompany me back to the hotel where the incident occurred. Up on our arrival, we saw that Lachu was not in the area. Workers of the hotel confirmed what the police chief had told me that the country dentist walked from door to door giving similar dental treatments. To my surprise the young police man who accompanied me to the hotel shrugged his shoulder in a careless manner and left as if nothing had happened. But what I have been thinking of is what he would have done had he met Lachu then.
The other day I happened to visit a lady acquaintance in the same town. I narrated to her the incident occurred at the hotel thinking that she would prevent her kids from having such rustic dental treatment. But to my surprise she told me that she had her little daughter’s milk-tooth pulled out by the same guy the previous week.
“Are you telling me that you allowed that stupid guy to grope the mouth of your little daughter with his blood-stained dirty pair of pincers?” I burst out furiously.
She nodded her head silently approving
Haile-Gebriel Endeshaw
