Coronavirus has interrupted the supposedly inexorable rise of the middle classes. Once a trend on which the hopes of governments and purveyors of everything from shampoo to financial services were predicated, middle-class growth has been partially furloughed. In its place: rising poverty.
According to the World Bank, the pandemic will tip up to 60m people into extreme poverty — that is, living on less than $1.90 a day. That will undo the progress made in the past five years. Slashed remittances — a big source of income for countries from the Philippines to India — and lost jobs weigh disproportionately on the poor. Depending on the severity of the impact on consumption, the Asian Development Bank sees its developing country members’ poor rising by between 90m and 400m. With nearly one person in five, or 734m people, already living on $3.20 or less a day, that is a big reversal for a continent spearheading the elevation towards better lifestyles.
China, whose shoppers account for a third of luxury goods sales and whose students pony up a good chunk of UK universities’ financing, was at the forefront of that trajectory. Since it began opening in 1978 about 850m have been lifted out of poverty, according to the World Bank. Premier Li Keqiang last month spoiled that narrative, admitting two-fifths of the population make less than $140 a month.