Report: Growing Middle Class Expected to Boost Global Economy

The world’s middle-class population will triple in the next 20 years, bringing with it unprecedented buying power that will be a boon to the global economy, but also an appetite for food, water and energy resources that could cause a real strain on the environment.

That and many more scenarios are part of the “Global Trends 2030: Alternative Worlds” report released by the National Intelligence Council. The report analyzes current trends and how those project into future events over the next 20 years.

The most optimistic forecast is that the world’s middle class will grow from its current level of 1 billion people to 3 billion by 2030. Most of that growth will happen in China and India, with promising gains also expected in Vietnam, Colombia, Turkey, Nigeria and Egypt.

“For the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world,” the report concluded.

World Economy Should Surge

The surge in the middle class would be a godsend for the global economy as spending power increases and demand for manufactured goods like cars, refrigerators, cellphones, computers and television sets increases accordingly.

The positive economic news could be tempered by the fact that the world’s population is expected to grow to 8.3 billion by 2030, which could make it difficult to meet the basic needs in some areas of the world. Global warming, rising seas, droughts and severe weather patterns could have a significant impact on the food supply. There could be even bigger concerns over water and energy shortages.

“Demand for food, water and energy will grow by approximately 35, 40 and 50 percent respectively owing to an increase in the global population and the consumption patterns of an expanding middle class,” the report said. “Water management will become critical to long-term food security. Many countries probably won’t have the wherewithal to avoid food and water shortages without massive help from outside.”

China is expected to pass the United States as the world’s largest economy, but is not expected to supplant America as the dominant global power.

U.S. Still a Power

The report cites the U.S. economic output, military spending, emerging energy independence and its ability to build coalitions worldwide as reasons America will keep its position as a global power.

“No other power would be likely to achieve the same panoply of power in this time frame under any plausible scenario,” the NIC report said. “An economically restored U.S. would be a ‘plus’ in terms of the capability of the international system to deal with major global crises during this long transitional period.”

China, on the other hand, could face internal political problems if its emerging middle class demands more freedoms.

The report said that Islamic terrorism will follow the historic pattern of other terrorism movements and gradually fade away. However, there is reason to be concerned about new technologies aiding terrorists and criminals in obtaining drone aircraft and biological toxins.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at bfay@debt.org.

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    Sources:

    1. Finn, P. (2012, December 10). Report sees middle class growing, Islamist terrorism subsiding by 2030. The Washington Post. Retrieved from http://www.washingtonpost.com/world/national-security/report-sees-middle-class-growing-islamist-terrorism-subsiding-by-2030/2012/12/10/a4f7137c-42d5-11e2-8061-253bccfc7532_story.html
    2. Dilanian, K. (2012, December 10). Study predicts rise of a global middle class. Los Angeles Times. Retrieved from http://www.latimes.com/business/la-fi-intelligence-economy-china-20121211,0,301340.story
    3. Pezzini, M. An Emerging Middle Class. (2012). Organisation for Economic Cooperation and Development. Retrieved from http://www.oecdobserver.org/news/fullstory.php/aid/3681/An_emerging_middle_class.html