Wednesday, April 20th 2011 - 02:49 UTC

Latin America rapidly becoming a middle-class continent, according to ECLAC

Latin America’s middle class increased by 56 million since 1999 with a direct consequence on consumption patterns and demand for government policies, according to a report in the latest edition of the United Nations Economic Commission for Latin American and the Caribbean, ECLAC Review.

As good middle class they love shopping malls

“This represents a formidable increase of the consumers’ market”, according to the ECLAC newsletter featuring expert analysis on issues such as changes observed in the middle classes in recent years, and the “China effect” on the region's exports.

The greatest expansion of the middle class, --described as people earning at least four times the poverty line--, took place in Brazil where 38 million climbed to that condition in the last ten years, totalling 61 million middle class Brazilians.

In contrast Argentina’s middle class has experienced a decline from 56% to 52% of the total population. Guerrilla-torn Colombia has gone through a similar process. In the rest of the region there was an overall advance which in some cases has meant that some families averaged 15.000 US dollars annually.

“The expansion of the middle class has not been a phenomenon restricted to Latin American but rather is a global tendency”, says the ECLAC report. An estimated 1.3 billion world population can be categorized as such, mainly because of advances in China and India.

The advance of this income group which is expanding at a rate of 70 million people annually will help consolidate a universe of 2 billion middle class by 2030, equivalent to 30% of global population.

But the advance of the middle class also has an impact in education which is devalued as a potent instrument of the social ladder. In effect “even when access opportunities to higher education have improved, at the same time there has been a relative devaluation of job and income opportunities for those who manage to complete secondary education”, underlines the ECLAC report.

The ECLAC review also includes articles on financial systems and investment financing systems in the region, factors affecting wage inequality, MERCOSUR as an export platform for the automotive industry, a new concept about social stratification and two studies on Brazil: one on the country's sugar sector and alcohol, and another on the effects of fiscal policy.

In the “China effect” on commodity prices and the value of Latin American exports, Professor Rhys Jenkins from the UK University of East Anglia, estimates the contribution of the rise in Chinese demand to the price increase of the 15 main commodities exported from this region.

Professor Rhys concludes that depending on the estimate used Latin America has earned between 42 and 75 billion dollars as a result during the period reviewed, 2002 to 2008.

Finally, the article ‘Variability and consistency in commodity prices in Latin America’, the ECLAC economists Omar Bello, Fernando Cantú and Rodrigo Heresi research commodity price patterns in relation to external shocks. They conclude that, over the past 50 years, prices have displayed considerable variability, and that the shocks that affect them tend to be highly consistent.

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1 geo (#) Apr 20th, 2011 - 09:18 am Report abuse
I never love middle class. becouse that ...
to buy high and low class is very more easier .
2 GeoffWard (#) Apr 20th, 2011 - 11:29 am Report abuse
Lets hope that when the lithium, copper and oil run out, the middle classes are sufficiently resilient to stay 'middle'.
3 Forgetit87 (#) Apr 20th, 2011 - 08:12 pm Report abuse
Since the majority of Latin American countries grow by means of domestic demand - investment and consumption - not exports, they probably are “sufficiently resilient.”

“Changes in terms of trade over the past decade have had significant benefits for some Latin American countries, like Venezuela, Chile, and Bolivia. However, the impact of changing terms of trade for most of the economies in the region, including larger ones such as Brazil, Mexico, and, to some extent, Argentina, was not very significant because increasing import prices partly offset the higher income from metals and agricultural commodities.”,the-growing-importance-of-china-brazil-trade.aspx
4 GeoffWard (#) Apr 20th, 2011 - 10:13 pm Report abuse
We are seeing, throughout Africa, the stripping out of the land's products and the total failure to translate the income into developments that create 'The Middle Class'.
When the land's products are gone, whither the non-emergent African middle class?

When South America's products are gone, there should be enough US, German and Chinese manfacturing companies 'controlling' the SA nation's economies to enable middle classes still to exist.

But the SA nations' over-inflated state administrations and governances will so full of pension-claiming administrators that the middle class will be forever the burden that the employees of foreign owned private industry has to bear.

We see it elsewhere; it will be no different here.
5 Forgetit87 (#) Apr 20th, 2011 - 11:14 pm Report abuse

Have you read what I said? South America's growth is spurred by domestic consumption. This is the main argument of the report I posted above. As for the “US, German and Chinese manfacturing” you fantasize about, IF they're entering South American markets, they're doing so, more often than not, by buying pre-existing businesses. As such, by themselves they do not enable income growth. If anything, they reduce it by remitting profits to their headquarters in foreign countries instead of re-investing them in the country the money was earned, as would happen if businesses remained domestically owned.

You have far less knowledge of the region you discuss than you believe. What you have is a perception, often with no basis on reality, fabricated by consuming too much from too few media outlets. I can trace your all too whiny attitude back to JN, Arnaldo Jabor, and other professional misinformers.
6 ManRod (#) Apr 20th, 2011 - 11:15 pm Report abuse
Geoff, there are still alot of AFP Private Pension states in SA, so not all state budgets are overinflated. I see some tendence in general to get away from the state caring status in the region, Venezuela by no means is representative for the continent (anymore). Evo Morales is struggling, Uruguay and Paraguay are getting more and more market oriented, even having “left” governments and Keiko is for sure going to win the run for elections in Peru, so no change of structure there. Rouseff in Brasil gets into Lulas steps, Brazil wants to conquer world markets. Chile with Piñera, no comments necessary. And finally the only “stable” left government: Ecuador and Correa. And this only because he has never made the impression to be a puppet of Chavez, like all the other cases.
7 Forgetit87 (#) Apr 20th, 2011 - 11:29 pm Report abuse
I see precisely the inverse - that the state role over the economy is growing throughout the region. Given the failure of the neoliberal regimes in the 90s, that's an excellent change. In Brazil Rousseff is “getting into Lula's steps” by increasing state management of the economy, not by surrendering more to the markets. That's a good thing. History has shown that in Brazil the state works far better than the market (just compare the 70s, the golden age of Brazilian state capitalism, with the 90s). I don't know much about the other countries. But to say that Bolivia is struggling is incorrect. Bolivia was the country that grew the most in the western hemisphere in 2009. As Peru, I pity its population if they get to elect Fujimori, the daughter of a corrupt, violent dictator-wannabe to office. With her, the recent trends within Peruvian economy - high growth but also high unemployment and growing inequality - is sure to continue unabated in that country for the next years.
8 Fido Dido (#) Apr 20th, 2011 - 11:52 pm Report abuse
first of all, debating with #2 is total waste.

People in Peru are being brainwashed over and over about Mr. Humala. He was the one under President Fujimore who got rid of the terrorists. Mr. Humala knows damn well where the danger lays if they don't spread the wealth (not the Barack Obozo way) better when the peruvian economy is booming and he knows damn well how to defeat the narco terrorism that grew faster under neo liberal Alan Garcia who kept his eyes closed. If Keiko wins, the policies of Garcia will continue where only Peruvians in Lima will feel the boom. If Humala wins, first their will be panic (similar what happened in Brazil under Lula) and then will boom further for the peruvian people in whole Peru. It's time that Peru takes more control over it's valuable recourses that is now being looted.
9 GeoffWard (#) Apr 21st, 2011 - 01:54 am Report abuse
Sao Paulo A, B, C, D, E, Foxconn!
Foxconn City, SP, Brasil. The domestic electronic capital of the continent:
Reduced salaries,'chinese' Foxconn working conditions, remittances returned to the Far East, indigenous industry destroyed, ?70% accumulated tax on gross wages, Robin Hood redistributed taxation to expand the Bolsa, credit bubble, demographic pension explosion, boom/bust/boom/bust/bust/bust

And all the while, the rich get richer, and the power and money stays in the same old families.

Oh, Dilma! for an end to corruption. If you can't get a grip on the cankers in government & admin, who can?
10 Think (#) Apr 21st, 2011 - 04:22 am Report abuse
(9) GeoffWard

You say:
”For if you and your ilk, the 'intelligent' and educated, are prepared to seek advancement through corruption, then you, your ilk, and this country have no claim to the word 'civilised'.”

I say:
You are talking!
You that advocate the ”TAKING OUT” of every progressive government in South America that is trying to change the corruption status quo?

We know all too well what “YOUR ILK” means with the worlds: ”TAKE OUT”
Dilma and Mujica bear the scars on their bodies………..
Names like Goulart and Allende have been in the news recently………..

Just one example to illustrate your complete lack of real information about South American Affairs and how opinionated your comments are:

The other day you “teasingly” commented about the Malvinas minefields…..:

Argentina has offered, several times, during the last 29 years to send demining teams and remove every single mine.

The United Kingdom (and the Islands hardliners) have refused the offer every time.

The minefields are still there in contravention of the UN Demining treaty that GB has signed.
Not because they are difficult to remove, but because they are a magnificent propaganda tool to get emotional old Anglo Turnips like you to react as expected,…… without thinking.
11 stick up your junta (#) Apr 21st, 2011 - 07:05 am Report abuse
@ think

Not because they are difficult to remove, but because they are a magnificent propaganda tool to get emotional old Anglo Turnips like you to react as expected,…… without thinking.

Nor you

Maybe we kept the mines a bit longer like chile,to keep burglars out

Chile will announce this week that the extreme south of the country, in areas next to the border with Argentina, is free of antipersonnel mines. Chilean authorities consider this a major step to comply with the 2016 Ottawa convention timetable

According to the report released to the press, Chilean Armed Forces special teams located and destroyed 3.462 anti personnel mines and 1.844 anti-tank mines in the Bahía Azul three areas to the north of Tierra del Fuego. This has been accomplished between December 2006 and June 2010.

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