Expected demographic developments will change world

Expected demographic developments will change world


Shahid Javed Burki June 14, 2021
The writer is a former caretaker finance minister and served as vice-president at the World Bank

Profound demographic changes are occurring in many parts of the world that would have a number of unexpected consequences. Demographers now predict that by the latter part of the 21st century, the global population will enter a period of sustained decline for the first time in history. According to one analysis, “The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatened to upend societies and how they are organised — around the notion that a surplus of young people will drive economies and help pay for the old. It may also require a recapitalisation of family and nation. Imagine entire regions where everyone is 70 years or older. Imaging governments laying out huge bonuses for immigrants and mothers with lots of children. Imagine a gig economy filled with grandparents and Super Bowl adds promoting procreation.”

The 20th century presented a very different challenge. The global population saw its greatest increase in known history, from 1.6 billion in 1900 to 8 billion in 2000 as life expectancies increased and infant mortality rates declined. In some countries — representing about a third of the population — those growth dynamics are still in play. By the end of the 21st century Nigeria could surpass China in terms of the size of its population. Even in countries long associated with rapid population growth, such as India and Mexico, birthrates are falling towards or are already below the replacement rate of 2.1 children per woman.

The youth are needed to lend a push to the economy by innovating and taking more risks than older people. Immigration can and does help. For reasons of preserving cultural homogeneity, nations in Europe have been inclined to accommodate the growing age-gap. They have been reluctant to bring in young people by admitting immigrants from the nations where the population was young. Africa — parts of which Europe had colonised and basically plundered — was the most obvious source of immigration. However, Europe resisted this for a while until the time that the German government headed by Chancellor Angela Merkel admitted more than a million Syrians who were fleeing the civil war in their country. Their arrival has already significantly affected the German demographic situation, its economy, and politics. The trend is continuing. According to an international team of scientists that published its findings in the highly respected British journal, The Lancet, 183 countries and territories — out of 195 — will have fertility rates below the replacement level by 2100.

The Lancet demographic model shows an especially sharp decline for China with its population expected to fall from 1.41 billion in 2020 to about 730 million in 2100. In about four decades, China’s population could decline by almost one-half its present size. If that does occur, the population pyramid would get inverted. Instead of a base of young workers supporting a narrower band of retirees, China would have as many 85-year-olds as 18-year-olds.

Some newly developed countries such as South Korea had tried a combination of incentives to persuade parents to have more children. The government spent more than $180 billion over the past 15 years, encouraging women to have more children but achieved few positive results. The number of 18-year-olds has fallen from 900,000 to 500,000 in 2020 and the decline is continuing. The South Korean experience has been repeated in a number of European countries, in particular in Italy. In a speech in earlier in May at a conference of the developing demographic situation in Italy, Pope Francis said, “The demographic winter was still cold and dark.”

International migration is one solution if the countries with rapidly declining populations are able to adjust to the challenges posed by a large number of foreigners moving in from different cultures and with different skin colours. This will happen with the movement of people from the countries that have surplus labour to those that have serious worker shortages. Pakistan belongs to the first category of nations; the Middle East, Europe, North America and China belong to the second. With the exception of China, Pakistanis have moved to countries where workers are needed. Oil exporting countries of the Middle East need workers of all kinds of skills: those that can provide physical labour to those who are highly skilled. Europe has rapidly aging populations. As revealed by the most recent population census conducted in 2020, the United States has also joined the countries with downward pointing demographic trends.

Large-scale immigration can have almost immediate positive consequences. The research done at the Organization of Economic Cooperation and Development (OECD) often called the rich nations’ club, has shown that the arrival of one million young refugees from the Middle East added 0.3% to the country’s GDP growth; this will increase further to 0.5% a year addition in the next decade. However, those wedded to cultural purity are not prepared to pay what they see as the price of letting in more foreigners. Already a right-wing political party, the AfD, has become a major political force in Germany. Perhaps the most telling impact of immigration of people with different skin colours and often of different religious persuasion is on the political system in the US. Donald Trump’s unexpected rise in the 2016 presidential contest was based on his antipathy towards non-white people and those who were the followers of Islam. One of his first act in office was to restrict the entry into the US of people from countries with Muslim majorities.

The last census in the US was conducted on April 1, 2020, when it found the country’s population was 331.5 million, an increase of only 7.4% in the 10-year period between 2010 and 2020. This was the second slowest rate of increase since the government began taking a census in 1790. The slowest growth rate was in the 1930s, the years of the Great Depression. The slow down this time around is part of a longer-term trend, related to the aging of the country’s White population, decreased fertility rates and slow-down in immigration. Going forward, older populations, especially those over the age of 65 will continue to see far higher rates of increase than young ones. The number of those over 65 has increased by 35%. Slowdown in immigration has also played a role. Since 2010, immigration has declined, mostly because of the hostility of the Trump administration to admitting newcomers, especially people of colour. A Pew Research Center analysis shows that over half of the population increase between 1965 and 2015 was due to immigration which added 72 million people. Fertility rate decline was also an important reason for the long-term trend. It was 1.73 well below the 2.1 considered to be the replacement rate.

Over the nation’s history growth ebbed and surged during wars, economic downturns and immigration waves. But the overall arc has been in the direction of slowdown. It can only be reversed by admitting foreigners into the country. There are many indications that the administration headed by Joe Biden recognises the importance of immigration to keep his country economically and socially vibrant.

 

Published in The Express Tribune, June 14th, 2021.

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