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Saving the middle class

March 24, 2013

NATIONS with large middle-class populations find it easier to sustain good, democratic governance. Pakistan is now more urbanised with a larger middle class than that of its neighbouring countries.

In the aftermath of the great recession, most of Pakistan’s middle class -- especially the ‘non-professional middle class’ who have finished high school but did not attend college -- are worse off than they were before. The biggest costs and heaviest damage of the recession have been inflicted on the people who we used to describe as being the “backbone of Pakistan”.

Pakistan’s strength as a democracy and a capitalist country has always been based on a strong, prosperous middle class. The middle class forms an alliance with lower classes in order to demand an exclusive political system. It produces decisive voters in democracy.

The Pakistan of today is a far less friendly place for the middle class than most Pakistanis might imagine.

What does the middle class want? They want education. The average years of schooling age (15-19) has not changed since 1990. They want jobs. Unemployment is rising 10 per cent per annum. Skilled people are migrating to other places. They need space both physically and intellectually. They need to protect their savings.

I suggest significant national investments in innovation, education and job training — from government investments in start-up companies, to bigger tax breaks for research and development, to using “career academies” to better connect high school students with the adult world of work, with an emphasis on vocational training and apprenticeships for students who prefer not to go on to a four-year college degree programme.

In spite of the recent growth in Pakistan’s middle class, it is still not strong enough to seize power. However, with the recent growth of an independent mass media and greater political activism, the Pakistani middle class has begun to exert more influence on how the nation is governed. There is still hope for the middle class in Pakistan.

Although the recession has been brutal; however, people who will have the most success in the economy of tomorrow are the ones who know how to grow, adapt and evolve.

If the venues of channelling middle class human capital and savings are not provided, then tendency towards consumption expenditures puts the sustainability of growth in danger.The future of Pakistan clearly belongs to its urban middle class. The behaviour of the members of this rising urban middle class will largely determine if and when Pakistan grows out of the current crises to face the future with greater confidence. Perhaps, the best way to save the middle class is for individual members to find ways to save themselves.