65 Mercer L. Rev. 733 (2013-2014)
Emerging Market Challenges: Moving beyond Trade to Promote the Middle Class and Avoid the Middle-Income Trap

handle is hein.journals/mercer65 and id is 759 raw text is: Emerging Market Challenges:
Moving Beyond Trade to Promote
the Middle Class and Avoid the
Middle-Income Trap
by Penelope B. Prime*
I. INTRODUCTION
The rise of the middle class around the world is seen by many as the
next frontier in business opportunities. In fact, the concept of emerging
markets is closely associated with the likelihood of a rapid rise in
middle-class incomes; in other words, a large internal market potential
or an increasing purchasing power among consumers.' One report by
McKinsey & Company2 estimated that annual private spending in
emerging markets will reach $30 trillion by 2025.' It has been
estimated that global consumers and proportional spending will increase
from 1.8 billion people spending $21 trillion in 2009 to 4.9 billion people
spending $56 trillion by 2030.'
Another trend, however, raises the prospect that these opportunities
will be tempered, at least in certain markets. The so-called middle-
income trap, also referred to as growth slowdowns, is increasingly cited
* Director of the China Research Center & Professor of International Business,
Institute of International Business, J. Mack Robinson College of Business, Georgia State
University. University of Denver (B.A, 1976); University of Michigan (MA, 1980);
University of Michigan (Ph.D., 1987). The Author would like to thank Drew Matthews for
his research assistance.
1. S. TAMER CAVUSGIL ET AL., DOING BUSINESS IN EMERGING MARKETS (2d ed. 2013).
2. Yuval Atsmon et al., Winning the $30 Trillion Decathlon: How to Succeed in
Emerging Markets, McKINsEY Q., Aug. 2012, at 1.
3. Id.
4. Homi Kharas, The Emerging Middle Class in Developing Countries, BROOKINGS
INSTITUTION,http*//www.brooking.edu/research/paper/2010/01/global-consumers-khraras.

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