Ruchir Sharma
The middle class has indeed been at the vanguard of protests since the French Revolution.
By Ruchir Sharma
Still-smoldering protests from Egypt to Brazil have set off a race among scholars and journalists to identify the roots of this summer of discontent in the emerging world. Each major theory starts at the bottom, with the protesters on the street, and notes a common thread: young, Twitter-savvy members of a rising middle class. In this telling, the protests represent the perils of success, as growing wealth creates a class of people who have the time and financial wherewithal to demand from their leaders even more prosperity, and political freedom as well.
This is a plausible story, often well told. Yet it is a bit too familiar to be fully persuasive. The middle class has indeed been at the vanguard of protests since the French Revolution. It has played an important role in Turkey, Brazil and Egypt since May and in earlier outbreaks of unrest in a half-dozen other emerging countries since 2011. But bourgeois rage can only explain so much. The middle class has been rising for many decades; in the last 10 years, rapid economic growth has spread with rare uniformity across most nations in the emerging world. So why are protests erupting now, and in only a scattered selection of emerging countries?
The middle class was not rising particularly fast in the countries recently hit by protests. According to data from the Brookings Institution, in 20 of the largest emerging nations, the middle class has grown over the last 15 years by an average of 18 percentage points to comprise a bit more than half the population. Brookings defines “middle class” individuals as those who can spend $10 to $100 a day, which should capture all the people who are newly ready to mobilise in protest. However, since 2010, protests have broken out in countries where the Brookings data identify the middle class as growing most rapidly, such as Russia, and least rapidly, such as India. The biggest protests have struck in countries where growth of the middle class is near the average: Egypt (14 percent), Brazil (19 percent), Turkey (22 percent).
There is also no clear link between the protests and dashed middle-class fortunes. Since 2008, the average growth rate in emerging nations has slowed to 4 percent from 8 percent, so virtually every new middle class has cause for disappointment. Some protest-stricken nations have seen particularly severe slowdowns, including Brazil recently and Russia before it.
Now, with Islamists challenging the military “coup,” the middle class feels caught in the same conflict that has long haunted Egypt.
In Brazil, the Workers’ Party has been in power for 10 years, and under President Dilma Rousseff follows the statist approach to development set by her predecessor, even as falling commodity prices depress growth in a commodity-dependent economy. Similarly, in Russia, protests erupted in 2011 and 2012 against Vladimir Putin and his party, motivated in part by the failure to diversify its oil-focused economy after 13 years in power. In Turkey, the issue is the overconfidence of a ruling party that is pushing the same model that has produced strong growth for the last 10 years. In South Africa, the mine strikes that first flared in 2010 remain a simmering threat to the 20- year reign of the African National Congress. In India, protests against corruption and mishandled rape cases have given voice to deep frustrations with the nine-year rule of the Congress-led coalition government.
The potential for these protests to reignite depends, at least in part, on whether people have the power to change old regimes. In genuine multiparty democracies such as India and Brazil, upcoming elections provide that opportunity. But in countries such as Russia and South Africa, where there is no clear alternative to the ruling regime, the risk of protests recurring is much greater.
If protests have been erupting primarily against older regimes, the reverse is also true: New regimes are getting a free pass from the rising middle class.
In Mexico, the Philippines, Nigeria and even Pakistan, relatively fresh leaders are using their political capital to push needed reforms. In these countries, the young, the educated, the newly prosperous have no reason to tweet their friends and hit the streets. For now, they are content to watch politics unfold on TV.
WP-BLOOMBERG
The middle class has indeed been at the vanguard of protests since the French Revolution.
By Ruchir Sharma
Still-smoldering protests from Egypt to Brazil have set off a race among scholars and journalists to identify the roots of this summer of discontent in the emerging world. Each major theory starts at the bottom, with the protesters on the street, and notes a common thread: young, Twitter-savvy members of a rising middle class. In this telling, the protests represent the perils of success, as growing wealth creates a class of people who have the time and financial wherewithal to demand from their leaders even more prosperity, and political freedom as well.
This is a plausible story, often well told. Yet it is a bit too familiar to be fully persuasive. The middle class has indeed been at the vanguard of protests since the French Revolution. It has played an important role in Turkey, Brazil and Egypt since May and in earlier outbreaks of unrest in a half-dozen other emerging countries since 2011. But bourgeois rage can only explain so much. The middle class has been rising for many decades; in the last 10 years, rapid economic growth has spread with rare uniformity across most nations in the emerging world. So why are protests erupting now, and in only a scattered selection of emerging countries?
The middle class was not rising particularly fast in the countries recently hit by protests. According to data from the Brookings Institution, in 20 of the largest emerging nations, the middle class has grown over the last 15 years by an average of 18 percentage points to comprise a bit more than half the population. Brookings defines “middle class” individuals as those who can spend $10 to $100 a day, which should capture all the people who are newly ready to mobilise in protest. However, since 2010, protests have broken out in countries where the Brookings data identify the middle class as growing most rapidly, such as Russia, and least rapidly, such as India. The biggest protests have struck in countries where growth of the middle class is near the average: Egypt (14 percent), Brazil (19 percent), Turkey (22 percent).
There is also no clear link between the protests and dashed middle-class fortunes. Since 2008, the average growth rate in emerging nations has slowed to 4 percent from 8 percent, so virtually every new middle class has cause for disappointment. Some protest-stricken nations have seen particularly severe slowdowns, including Brazil recently and Russia before it.
Now, with Islamists challenging the military “coup,” the middle class feels caught in the same conflict that has long haunted Egypt.
In Brazil, the Workers’ Party has been in power for 10 years, and under President Dilma Rousseff follows the statist approach to development set by her predecessor, even as falling commodity prices depress growth in a commodity-dependent economy. Similarly, in Russia, protests erupted in 2011 and 2012 against Vladimir Putin and his party, motivated in part by the failure to diversify its oil-focused economy after 13 years in power. In Turkey, the issue is the overconfidence of a ruling party that is pushing the same model that has produced strong growth for the last 10 years. In South Africa, the mine strikes that first flared in 2010 remain a simmering threat to the 20- year reign of the African National Congress. In India, protests against corruption and mishandled rape cases have given voice to deep frustrations with the nine-year rule of the Congress-led coalition government.
The potential for these protests to reignite depends, at least in part, on whether people have the power to change old regimes. In genuine multiparty democracies such as India and Brazil, upcoming elections provide that opportunity. But in countries such as Russia and South Africa, where there is no clear alternative to the ruling regime, the risk of protests recurring is much greater.
If protests have been erupting primarily against older regimes, the reverse is also true: New regimes are getting a free pass from the rising middle class.
In Mexico, the Philippines, Nigeria and even Pakistan, relatively fresh leaders are using their political capital to push needed reforms. In these countries, the young, the educated, the newly prosperous have no reason to tweet their friends and hit the streets. For now, they are content to watch politics unfold on TV.
WP-BLOOMBERG
