Incredible shrinking countries

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Declining populations Incredible shrinking countries Jan 5th 2006 From The Economist print edition Rich countries' populations are beginning to shrink.

1 Declining populations Incredible shrinking countries Jan 5th 2006 From The Economist print edition Rich countries' populations are beginning to shrink. That's not necessarily bad news DURING the second half of the 20th century, the global population explosion was the big demographic bogey. Robert McNamara, president of the World Bank in the 1970s, compared the threat of unmanageable population pressures with the danger of nuclear war. Now that worry has evaporated, and this century is spooking itself with the opposite fear: the onset of demographic decline. The shrinkage of Russia and eastern Europe is familiar, though not perhaps the scale of it: Russia's population is expected to fall by 22% between 2005 and 2050, Ukraine's by a staggering 43%. Now the phenomenon is creeping into the rich world: Japan (see article) has started to shrink and others, such as Italy and Germany, will soon follow. Even China's population will be declining by the early 2030s, according to the UN, which projects that by 2050 populations will be lower than they are today in 50 countries. Demographic decline worries people because it is believed to go hand in hand with economic decline. At the extremes it may well be the result of economic factors: pessimism may depress the birth rate and push up rates of suicide and alcoholism. But, in the main, demographic decline is the consequence of the low fertility that generally goes with growing prosperity. In Japan, for instance, birth rates fell below the replacement rate of 2.1 children per woman in the mid-1970s and have been particularly low in the past 15 years. But if demographic decline is not generally a consequence of economic decline, surely it must be a cause? In a crude sense, yes. As populations shrink, GDP growth will slow. Some economies may even start to shrink, too. The result will be a loss of economic influence. Governments hate the idea of a shrinking population because the absolute size of GDP matters for great-power status. The bigger the economy, the bigger the military, the greater

2 the geopolitical clout: annual GDP estimates were first introduced in America in the 1940s as part of its war effort. Companies worry, too: they do not like the idea of their domestic markets shrinking. People should not mind, though. What matters for economic welfare is GDP per person. The crucial question is therefore what the effect of demographic decline is on the growth of GDP per person. The bad news is that this looks likely to slow because working-age populations will decline more rapidly than overall populations. Yet this need not happen. Productivity growth may keep up growth in GDP per person: as labour becomes scarcer, and pressure to introduce new technologies to boost workers' efficiency increases, so the productivity of labour may rise faster. Anyway, retirement ages can be lifted to increase the supply of labour even when the population is declining. People love to worry maybe it's a symptom of ageing populations but the gloom surrounding population declines misses the main point. The new demographics that are causing populations to age and to shrink are something to celebrate. Humanity was once caught in the trap of high fertility and high mortality. Now it has escaped into the freedom of low fertility and low mortality. Women's control over the number of children they have is an unqualified good as is the average person's enjoyment, in rich countries, of ten more years of life than they had in Politicians may fear the decline of their nations' economic prowess, but people should celebrate the new demographics as heralding a golden age. A smaller world Mar 13th 2002 From The Economist Global Agenda Demographers are rethinking their forecasts of population growth because of an unexpected fall in the fertility rates of many developing countries. As experts discuss changing trends at a United Nations conference in New York, some experts are beginning to speculate about the eventual decline of the global population Reuters Fewer mouths to feed eventually PREDICTING the future is always difficult and predicting population trends is particularly fraught. Following Thomas Malthus s reflections on population in 1798, the 2

3 world had nightmarish visions of population explosions and starving crowds. Although his apocalyptic theories have long been disproven, too-rapid population growth has nevertheless crippled the economic prospects of many developing countries and left hundreds of millions mired in poverty. The pace of growth has been truly startling. World population has soared from 2.5 billion in 1950 to over 6 billion today making it something of a miracle that Malthus s predictions of mass starvation have not come true. Even more rapid advances in technology have helped stave off Armageddon. But growth is continuing at an alarming rate. The United Nations population division projects that world population will balloon to 9.3 billion within the next 50 years. But have the experts got it wrong again? At a UN meeting in New York this week, the organisation s own population experts are conferring with other leading demographers to decide whether the current projections need to be revised downwards. There is no doubt that world population will substantially increase over the next few decades, but there are now signs that it may do so at a slower rate than predicted. And one participant at the conference, believes that the world s population might even start to decline in about a hundred years. We may some day pass our present level on the way down again, says John Caldwell, a professor at the Australian National University. The key to population forecasts, and to the revisions now being contemplated, is fertility rates. Until recently, population gurus thought that the world s average fertility rate, which has been declining, would eventually stabilise at 2.1 children per woman. This is roughly the replacement rate, and would mean that world population would also plateau once the rate was achieved. But in the past decade, it has become increasingly clear that countries whose reproductive zeal had fallen below the 2.1 magic number were not isolated cases. As far back as 1997, the UN population division decided it would be wise to assume that most industrialised countries would land on a fertility plateau of 1.85 children per woman before 2050 and revised their population projections accordingly. Now population experts are wondering whether they should do the same for many countries in the developing world, where the bulk of population growth occurs. In countries whose fertility rate currently stands somewhere between 2.1 and 5, the number of children per woman has been declining more rapidly than anticipated. Tunisian women, for example, have gone from bearing an average of over 7 children in the early 1960s to only 2.3 in the late 1990s. In Brazil, the rate has slumped from 6.15 to 2.27 in the past 45 years. For most countries, the decline in fertility rates has been accelerating over the past 20 years, and population experts now think that they will approach the equilibrium rate much sooner than expected. Indeed, demographers are starting to doubt whether the fertility rate for these countries will stabilise at 2.1 or carry on falling. So this week s UN conference is considering whether to extend the 1.85 rate used for industrial world projections to this much larger group of developing countries. What may initially seem like hair-splitting could, of course, have a significant impact. The 74 countries whose rates the experts are revising made up 43% of the world s population in The group includes heavily populated countries such as India, Indonesia and Brazil where even small changes in the fertility rate translate into sizeable population changes in a relatively short time. According to the UN population division, the change being contemplated this week would mean that in 50 years, there would be 85m fewer Indians than currently projected: and close to 690m fewer by

A big factor in these unexpected declines in fertility rates is the realisation that fertility may not be as closely related to socio-economic factors as was previously thought.

4 A big factor in these unexpected declines in fertility rates is the realisation that fertility may not be as closely related to socio-economic factors as was previously thought. Urbanisation, as well as better education and a higher social status for women may not be preconditions for declining fertility. Larry Heligman, assistant director for the UN population division, points to Ghana, whose fertility rate has declined from 7 in the 1970s to 4.2 today, in spite of limited progress on other fronts. Uneducated women in rural areas, provided they have access to family planning, increasingly choose to have fewer children. The debate over the relative importance of family planning and socio-economic factors is still raging, though. Whatever their background, if women have access to contraception they can limit unwanted pregnancies. But educated, urban women still tend to want fewer children than their rural and less-educated sisters. Family-planning policy is essential in lowering fertility rates, but without appropriate efforts to improve health services and the status of women, the decline is likely to be limited. If mothers expect that some of their children are likely to die before the age of five, most will keep on having them. In poor countries, extra children is the only assurance most parents have that they will not starve in old age. So unless the world s poorest countries become richer, declines in fertility may stop. What are the implications of slower population growth? Fewer mouths to feed are good news for poor countries, which are struggling to feed the number of people they already have. Although the picture is not as bleak as in the late 1960s when 45% of children under five suffered from malnutrition close to one child in three, or 167m children, were still malnourished in the late 1990s. In sub-saharan Africa, both the proportion and the absolute number of malnourished children are still on the rise. According to Mark Rosegrant of the International Food Policy Research Institute, a think-tank based in Washington, DC, there will still be over 130m malnourished children in 2020, based on current UN population projections. Although bad agricultural and trade policies, as well as problems of food distribution, have a lot to do with world hunger, rapidly growing populations only make the problem worse. For example, if the UN's lowest forecast of population growth turns out to be right, rather than the medium-range figure which it still 4

5 believes is most likely, that would mean 30m fewer malnourished children in 20 years, says Mr Roesgrant. Does slower population growth also mean less poverty? Not automatically. According to Tom Merrick, population consultant at the World Bank, declining fertility creates a window of opportunity, during which countries have a chance to improve physical, as well as health and education infrastructure, and to create better job prospects. In Taiwan and South Korea, lower fertility rates translated into a better-educated workforce having access to better employment and enjoying rising living standards. But depending on the speed of the fertility transition, the window could be as short as two decades. If countries miss the boat, however, and their economies do not grow quickly enough, or their workforce does not become better educated, their millions of working-age inhabitants will go from caring for children to supporting a growing number of older people, with no more resources to do so. This hardly provides a recipe for economic success. According to Mr Merrick, countries such as India and Bangladesh, where fertility rates have been declining steadily, may nonetheless be facing this gloomy prospect. In other words, declining fertility rates may be a necessary condition for economic improvement: but not a sufficient one. Sensible economic policies, responsible government and access to world markets are, in the short and medium term, probably just as important. Making the most of the opportunities offered by falling fertility is a challenge for rich and poor countries alike. 5

C OVER STORY OVERPOPULATION: MYTHS AND REALITY. Text: Olga Irisova

C OVER STORY OVERPOPULATION: MYTHS AND REALITY Text: Olga Irisova 1/11 W OR LD EC ONOMIC JOURNAL #11 2013 OVER THE PAST 54 YEARS, THE EARTH S POPULATION HAS MORE THAN DOUBLED, AND ACCORDING TO A RECENT