Alazar Kebede 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.
