Document summary
This primer from Bank of America Merrill Lynch views the solution to stagnant world growth lies in uplifting the ‘Bottom Billions,’ those 4.5bn people at the base of the economic pyramid. They earn only US$1-10/day but have US$5tn in purchasing power and US$7.4tn in wealth. Bottom Billions are young, educated with considerable disposable income and interconnected via the Internet. Many are poised to join the middle class by 2030.
There are also opportunities around the US$5-7tn/year in investments needed to realize the UN’s Sustainable Development Goals. However, despite the prospect surrounding the ‘Bottom Billions,’ in 2015 14% of people still lived in extreme poverty, many are chronically hungry, illiterate, and lacked access to proper sanitation. The Bottom Billions also lie at the heart of the world’s top risks, and the 2016 economic growth outlook for EMs is weak.
This primer from Bank of America Merrill notes that governments, businesses, and stakeholders need to act together to tackle growing inequality, social unrest and instability, which is reaching the highs of 1980. As the Bottom Billions move up the economic ladder, middle-class spending would increase tremendously. They have highlighted four entry points for investors looking to play the theme: Consumer, Information & Communication Technologies (ICT), Financials and Healthcare.