No middle path?

Economists and sociologists maintain a lively debate on what it means to belong to the middle class. But one aspect is agreed upon: to move up into the middle class is to consume more. And given that in developing countries the criteria set for consumption to enter the middle class are so austere, a new member of this demographic can be someone just recently lifted out of poverty. By a research estimate cited in Foreign Policy magazine, India and China are set to rapidly increase their middle classes: by 2025, China8217;s middle class would be the world8217;s largest, and India8217;s would grow 10-fold from what it is now. The numbers sustaining this demographic shift are huge, in the billions. The consequences are only just beginning to be felt. The higher consumption of financially better enabled people could mean higher commodity prices and greater energy consumption. But this increase in prices 8212; especially of food 8212; would demand of governments greater resourcefulness in assisting their poor populations.

Food and energy prices are already at record highs. This month the UN Food and Agriculture Organisation8217;s 8216;Crop Prospects and Food Situation8217; report forecast increased cereal production in 2008. Nonetheless, it warned, 8220;international prices of most cereals remain at record high levels and some are still on the increase8221;. This increase is significant; in December The Economist food-price index showed that in real terms prices have gone up by 75 per cent since 2005. Two factors make the situation unique. One, besides consumption, biofuels are contributing to a greater demand for crops like maize. Two, because the rise is across the board, strategic crop diversification to meet higher demand is not that easy. Some theorists argue higher returns to farmers could actually help rural communities in poor countries. The Budget next week is expected to offer a new deal to farmers. It will, hopefully, ignite farmers8217; stake in higher productivity and market opportunities. And taking a larger picture, government will have to reckon with the challenge of pulling more and more millions out of poverty in a costlier food environment.

India also needs to worry about a discourse gaining utterance: that the world cannot, environmentally, sustain an increase in consumption in energy. The movement out of acute poverty necessarily implies greater energy consumption. As the world worries, most rightly, about climate change, it must find solutions that humanely factor in poor people8217;s access to a higher consumption lifestyle.