Sunday, May 11, 2008

Prices and the World Middle Class

Moises Naim, the editor in chief of Foreign Policy magazine, has written a short and thought-provoking article, "Can the World Afford a Middle Class?" An excerpt:

These protesters are the most vociferous manifestations of a global trend: We are all paying more for bread, milk, and chocolate, to name just a few items. The new consumers of the emerging global middle class are driving up food prices everywhere. The food-price index compiled by The Economist since 1845 is now at an all-time high; it increased 30 percent in 2007 alone. Milk prices were up more than 29 percent last year, while wheat and soybeans increased by almost 80 and 90 percent, respectively. Many other grains, like rice and maize, reached record highs. Prices are soaring not because there is less food (in 2007, the world produced more grains than ever before), but because some grains are now being used as fuel and because more people can afford to eat more. The average consumption of meat in China, for example, has more than doubled since the mid-1980s.

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