• 
• 

Published on April 17, 2008

Developing a dislike for debt

The definition of financial success in developed markets is: "I have no debt." This was especially the case in the US and the UK and also in Australia, the Netherlands and Canada.

Synovate senior vice president Claire Braverman said the definition of success in these markets was less about what people could afford and more about how they paid for it.

"Debt is public enemy No 1 in the US at the moment," she said. "The sub-prime crisis has brought debt into sharp focus, and people would clearly feel much more financially successful if they were rid of it. The US situation has flow-on effects for the rest of the world, too, as most economies are intrinsically linked to the US market.

"There is another reason for this focus on debt in developed markets versus emerging ones, though. It is partly an attitude towards money, not wanting to take on debt in the first place. Equally, it is about access to debt. Despite the current environment, debt is a relatively easy thing to sign up for in developed markets. In many emerging markets, for many consumers, it's not even an option."

Does money make the world go 'round?

Consumers in emerging markets are far more likely to attribute financial success to good luck rather than good management and are also more likely to think about money and how to get it. A series of agree/disagree questions explored how people felt about money and its relative importance in their lives.

So who's the most obsessed with money?

Eighty-three percent of Indonesians surveyed agreed with the statement: "I think about money - and how to get more of it - regularly." They were followed by 76 per cent in both India and Malaysia.

Mike Sherman, executive director of consumer insights for Synovate in Asia, attributes this more to need than culture.

"There is a bit of 'You want what you don't have' in this result, but it's far more of a need issue. It's not the same as obsessing over something you don't really need, like a gadget. Money is life and death, and despite ever-growing affluence, many people in these markets are still engaged in a daily struggle to get it," he said.

"What is possibly more to do with culture is the 72 per cent of Indians who agreed that financial success is due to good luck, not good management, miles ahead of the next-highest agreement level of 44 per cent in Bulgaria and Malaysia. In India, luck and fortune play a great role in people's lives in general. "On the other hand, only 12 per cent of respondents in Australia, 14 per cent in Canada and 16 per cent in the US agreed. These cultures are heavily geared around reward linked to hard work."

Money equalled problems in the minds of 57 per cent of emerging-market respondents. Their developed-market counterparts did not agree; only 31 per cent of them saw a link between more money and greater problems in life.

The Nation