The concept of the middle class is breaking the archaic formula of "the rich get richer, the poor get poorer." What is the middle class, how much does it earn in Uzbekistan, who can be its representative, and how can businesses and the state create offerings for it — in a column by real estate analyst Denis Sokolov.

 

The middle class is a crucial element of economic growth. Therefore, it is discussed at conferences and dedicated research. The growth of the middle class is a guarantee of a country's prosperity.

Developing markets at the beginning of their journey are characterized by an archaic social structure, where there are a few rich and a large number of poor. Social development in such societies is described by the well-known formula: "the rich get richer, the poor get poorer," repeatedly presented in classical literature—from Omar Khayyam to Robert Burns. In this paradigm, there is no room for development—the poor will never become rich.

"Do not envy those who are strong and rich,

for sunset always follows dawn.

With this short life, equal to a breath,

Treat it as if it were lent to you."

Omar Khayyam

The concept of the middle class, at least partially, helps to solve the social problem of insurmountable inequality. A person may not jump from poverty to wealth, but the path from the lower to the upper boundary of the middle class is not only open to everyone—it is fully provided for by the very essence of the middle class.

The middle class is not a closed and preserved society, but a constant movement. The Organisation for Economic Co-operation and Development (OECD) in its 2010 document "The Rise of the Middle Class in Developing Countries" defines the income level for the middle class in developing countries in the range of $10-100 per household per day.

The Asian Development Bank identifies four subgroups within the middle class: transitional, lower-middle, upper-middle, and high.

Today, the average salary in Uzbekistan is about 5 million soums per month, and the average household size is five people.

I could not find any research on the middle class in the country, and as a preliminary model, subject to further refinement, I would propose the following gradation for the urban population:

Transitional — 5-10 million soums

Lower-middle — 10-15 million soums

Upper-middle — 15-30 million soums

High — 30-50 million soums.

Refining the boundaries and calculating the size of the middle class is a crucial analytical task that, I have no doubt, will be accomplished in the near future.

The middle class is not only about income but also about values. By becoming part of the middle class, a family begins its journey towards growth in both wealth and human capital. As they move up the social ladder, they gain access to education, healthcare services, travel, cultural development, and pension provision. This is called vertical mobility.

A young person from a less affluent family who is studying at university belongs to the middle class not by household income criteria, but because their own income is expected to increase in the foreseeable future.

In other words, the most important criterion for the middle class in Central Asia, I would identify, is the presence of prospects for improving household well-being. This can be any social elevator: education, career, civil service, or, ultimately, marriage.

From a consumer behavior perspective, this means that a person has something worth investing their effort and time in. This could be studying, working, or socializing. For the middle class, time becomes a valuable resource.

Therefore, modern formats of concentrated urban culture are oriented towards the middle class: shopping malls where one can buy everything at once, public spaces where representatives of all social strata can meet, fast-casual restaurants that combine the convenience of fast food with the prestige and full meals of quality cuisine. Supermarkets also fall into this category.

Having climbed the middle-class ladder, a person is no longer willing to spend time searching for cheap goods in the market; their time is worth more than the sellers' time, so their behavior changes. However, a characteristic of the middle class is constant evolution, and as they move up the ladder, the consumer may return to the market, but in a different capacity—not to find the cheapest goods, but for pleasure and the opportunity to find something unusual.

Large businesses and city authorities must prepare in advance for this shift in vector and adapt formats not just for an abstract middle class, but to more finely tune into the needs of the target audience. In Tashkent, there are already such examples: for instance, the eco-bazaar formally remains an ordinary market, but it is already oriented towards a completely different target audience. Or Tashkent City Mall, which has attracted international brands that professionally cater to the needs of the middle class.

Even today, we see a diverse crowd in the markets of Tashkent. Market trade will always thrive in this city because it is an important part of urban culture and traditions. It is important that, while transforming, it retains its color and democratic nature.


Source: Gazeta.uz