The threat to the Burgeoning Bourgeoisie

In the last edition of the economist there was an article, the ‘burgeoning bourgeoisie’ that said ‘for the first time in history more than half the world is middle class’. It also highlighted that while the increase India and China has been, as expected; massive the middle class has increased dramatically across all emerging markets. There are for example 80 million more middle class Sub Saharan Africans today than in 1990.

This growth in prosperity is something I have been working for throughout my career, but it is fragile and millions of lives now rest on the decisions that will be taken in the developed world over the coming months. The banking crisis has left millions of the world’s population in real peril and the longer the crisis continues the more of this new middle class will slip back into poverty.

From G7 to G20 - The Financial Crisis

The G7 finance ministers meeting on the 13th passed almost un-noticed there were the requisite statements on coordinating the response to the financial crisis, resisting the pull of protectionism, and the importance of free trade, but no progress on an international trade deal, or a global response to the crisis.

The real priority is to shore up the banking system. Governments should take action together to remove toxic assets from banks’ balance sheets through insurance schemes, and reopen the flow of credit. Im surprised that Governments are mainly taking advice from bankers in this restructuring, when input should come from as wide as possible, including other sectors of the economy.

Attention is now focused on the G20 meeting in London in April, with many hoping that it will become the starting point for recovery, for a new global financial and governance structure.

Trade Talks and the Financial Crisis

The current state of the world economy and the financial crisis makes the successful conclusion of the Doha Round of trade talks all the more unlikely.

The Heads of the G8 Countries are making all the right noises about resisting the draw of protectionism in a retracting market situation and with increasing unemployment at home, but for all this, the result is the same; the Round is not likely to be completed in the present climate and almost certainly not within the year.

While I congratulate Pascal Lamy for his continuous and seemingly untiring efforts to keep moving forward with the Round, I do not believe that either the upcoming G8 or G20 meetings will hasten the conclusion of the Doha talks.

Slumdog Millionaires….

While in Bombay last Month my wife and I along with some colleagues from the UK and Canada, saw Slumdog Millionaire, I thought it was an exceptional film, Danny Boyle should be extremely proud, particularly of the way he captured the image of India. I know the author personally, we met while he worked at the Indian High Commission in the UK, I had the pleasure of reading an early version of the book, it’s a great and inspirational story.

I was however disturbed to read, the allegations lodged against the films makers that the children who starred in the film were paid almost nothing and are still living in the same conditions as when they were discovered by the casting scouts.

I hope these allegations are not true, and that some of the films profits will reach the people who live in the slums, particularly the kids who starred in the film, as Danny Boyle has since said. There is a potential millionaire, born every day in all the Slums of India.