1. Poverty, the ‘New Middle Classes’ and Sustainable Development Peter Kingstone Professor and Co-Director, International Development Institute King’s College London Presentation for the “Common Challenges, Multiple Perspectives: Middle Income Countries Experts’ Consultation “ UNDP, Seoul, Korea, May 13-15, 2013

2. Where do the world’s poor live: % of world poverty ($1.25), 2008

3. Why the Change: Large fall in the number of low-income countries Number of LICs and MICs

4. But global poverty didn’t fall much outside China... Number of Poor (millions)

5. The other big story: the ‘new’ but not so well-off middle classes

6. Share of informal employment in total non-agricultural employment Source: OECD, 2009 Country1990-19941995-19992000-20072009 Egypt55.245.9 South Africa50.6 Argentina47.553.3 Brazil60 51.1 Mexico55.559.450.1 India73.783.4 Indonesia77.9 Thailand51.451.5 Turkey30.933.2 Romania5.422

7. Health Care costs fall heavily on households Per CapitaTotal HealthPublic ShareOut of Pocket Health ExpendExpend GDPTotal HealthShareTotal ExpendHealth Expend Lower Middle814%42%53% Income Upper Middle4886%55%31% Income High Income OECD4,6181161%14% Source: Maria-Luisa Escobar, Charles Griffin, R. Shaw ( 2010)

8. Taxes: A key element in the fight against poverty

9. Fiscal Health in the emerging economies is tightly linked to commodity export revenues

10. What happens if commodity prices fall? Estimated Impact on Total Revenues as a Result of a 25% Decline in Real Commodity Prices Source: “Rethinking Reforms: How Latin America and the Caribbean Can Escape Suppressed World Growth.” IDB, 2013