KARACHI: ‘Emerging affluent’ Indians and Pakistanis are more optimistic about their future salaries as compared to their Chinese counterparts, with almost half of the socially mobile in India (46 per cent) and Pakistan (48pc) predicting an earnings increase of 50pc or more in the next five year compared to 29pc in China, the ‘Climbing the Prosperity Ladder — The rise of the socially mobile in Asia, Africa and the Middle East’ study notes.

The term ‘emerging affluent’ defines a group of people in fast-growing economies in Asia, Africa and the Middle East who are accumulating wealth and rapidly improving their personal wellbeing.

According to the study, China, India, and Pakistan — highlighted as ‘fast trackers’ — also provide abundant growth opportunities to the upwardly mobile. Interestingly, the levels of optimism of emerging affluent with these three countries when compared to their parents were higher than the reality.

Of those surveyed, 79pc in Pakistan believed they were doing better than their parents in terms of finances when in fact only 64pc were better off than the earlier generation. Similar responses were shared by participants in India (80pc as opposed to the objective 67pc) and China (84pc versus 67pc).

Funded by the Standard Chartered Bank, the study looks at 11,000 ‘emerging affluent’ consumers in China, Hong Kong, India, Indonesia, Kenya, Malaysia, Nigeria, Pakistan, Singa­pore, South Korea and the United Arab Emirates. The study was shared with local media on Monday.

Responding to a question regarding Pakistani consumers and their behaviour towards digital financial products, SCB’s Head of Retail Banking Syed Muj­taba Abbas said there was room for improvement when it came to enabling consumer access to fintech services.

The study notes that the emerging affluent are ‘creating their own prosperity by achieving more in their education, careers and businesses than their parents did’, with access to digital technology allowing for improved money management and financial wellbeing.

Nearly 64pc of the surveyed are experiencing upward social mobility, with 11pc in the group labelled as ‘supercharged’ when compared with the previous generation and peers. The study defines supercharged as individuals demonstrating ‘extreme positive mobility by advancing their position further and faster than the rest of the socially mobile’, resulting in a very significant gap between their parents’ situation and their own, and a strong increase in earnings.

Interestingly, the study also notes that though the emerging affluent feel they have impressive investment habits, however their products use shows there is a gap between their perception and the reality.

For the emerging affluent in all eleven markets surveyed for the study, children’s education was a top priority, followed by investment in property, and the ability to provide long-term security as opposed to short-term luxuries. Buying a first home and setting up a business are both the top saving priority for 7pc of the emerging affluent.

To meet their financial targets, the participants strategised by investing in financial products (56pc), career progression (43pc), starting a business (27pc), having a side hustle (24pc), part-time job (18pc) and relying on gig economy (12pc). A meagre 3pc expected a windfall in the shape of inheritance.

The study concludes that digital banking and wealth management tools can help the emerging affluent set and track their goals.

Published in Dawn, October 30th, 2018