Demographic Trend Time Bombs

Experts have long been saying that demographic trends can have a huge effect on a country. Just look at the effects the baby boom generation has had on the United States. First it resulted in a rash of schools being built and a boom in companies like Toy-R-Us. Later college enrollments went up and home builders boomed and now it is expanding healthcare and retirement communities. But demographics don’t just affect the United States. It is a world-wide phenomenon. And populations don’t just grow… sometimes they contract. For instance, falling fertility due to chemicals is becoming an issue in developed countries. In todays article Greg Madison talks about some other demographic trends that you may not be as familiar with. ~Tim McMahon, editor

Countries Facing Demographic Time Bombs

By Greg Madison

When a big economy hits the shoals, there are options.

You can take a Keynesian approach. You can take a  Friedmanian approach. There are Bernankes, there are Nodas , the Austrian  School, the Chicago School, expansion and contraction – however a government  wants to play it, whatever the ideology, there are options and precedents for  getting the economy going again.

But there are some problems, some threats that can’t be addressed with an easy,  take-your-pick policy. These would be the problems posed by simple  demographics. Some of the world’s biggest economies and most crucial players  are facing true demographic crises which, if left untended, will ultimately  result in their downfall. These countries are facing demographic time bombs.

The Russian  Federation – The sprawling, resource-rich heir to the old Soviet Union is  the largest country on Earth by land area. Russia’s estimated 143.4 million  citizens sparsely dot one-eighth of the Earth’s surface. The country is a major  nuclear power, re-investing it its military and riding a wave of resource  exploitation.

Russian Demographic TrendsBut all the military power and economic growth in the world  won’t help Russia’s fundamental problem. Russia’s population hit its peak of  148.7 million people just before the  breakup of the Soviet Union. Population there has been on a slow, steady  decline ever since.

Death rates, on the other hand, have been rising steadily at  the same time. Demographers call this phenomenon the Russian Cross. Fertility  rates have plunged, while deaths among males under 50 have exploded, in part  due to alcohol and the crumbling healthcare system. It doesn’t take much  imagination to see the eventual outcome. There are signs that Russia has begun  to slow or reverse this ultimately fatal trend, as birth rates increased  slightly in 2009, but the pressures facing the country are tremendous.

The People’s Republic  of China – China’s (in)famous “One Child Policy” was introduced in the late  1970s to address growing social, economic, and environmental problems. The  policy was to last for one generation, and it’s come close to doing just that.

The Chinese government claims that it has prevented 400  million births between 1979 and 2011 – more than the entire population of the  United States. The One Child Policy is perhaps the ultimate example of what  happens when human efforts run headlong into a force of nature. A whole host of  well-publicized, lurid ills has followed.

For millennia, Chinese society has focused on the family;  family size, family stability. A couple who had plentiful children could count  on those children to support them in their old age, generate income for the  family, and ultimately grow and assure the family’s success and prosperity.

Chinese DemographicsThe One Child Policy is not applied equally throughout Chinese society. Some 35.9% of the population is  subject to strict limit, 52.9% of the population is allowed to have more than  one child – if their first was a daughter, and 1.6% is not subject to any limit  at all.

If a family is wealthy enough, they may have as many  children as is practical for their circumstances and simply pay the large fines  associated with flouting the law. The bottom line for China is that the  One-Child Generation will soon have to provide for massive numbers of its aging  parents, and this generation will not be  able to draw on its traditional sibling support structure.

The picture is an inverted, massively top heavy pyramid. As  daunting as this prospect is, it’s made even worse by the massive gender  imbalance developing in the country. Males outnumber females by nearly 10  million, as a traditional preference for boys takes on a frightening, modern  dimension. In a way, the One Child Policy forces couples to choose between any  hope of a comfortable retirement and their daughters’ lives.

israel- demographicsThe State of Israel –  Israel is facing a unique demographic time bomb, perhaps the only country to  experience such a quandary. The problem derives from Israel’s stated wish, laid  out in its founding documents and philosophy: to be a liberal democracy with an  essentially Jewish character.

At a point in the not too distant future, Israel will realize  that it actually cannot be both. The problem is one of population, population  growth, ethnicity, and mutual antagonism. This is a region in conflict in which  so very much depends on ethno-religious identity.

However you come down on the Israel/Palestinian conflict,  the numbers are inescapable – a simple matter of birthrates: By the year 2020,  there will be more people living under Israeli occupation or military  administration than in Israel proper. By 2020, the Jewish population of Israel  will reach roughly 6.9 million people, while the Palestinian population in  Israel and, crucially, the West Bank and Gaza, will reach 7.2 million.

The disparity becomes greater the farther out in time one  looks. The question for Israel then becomes one of choice: either a Jewish state or a  democracy. With conditions strictly as they are now, it cannot be both. The  challenge facing Israelis and Palestinians is to come to some sort of mutually  agreeable, workable solution before these pressures become too overwhelming to allow  for any kind of peaceful solution.

Japan – Japan  faces a rapidly aging population, troublesome unemployment, and declining  birthrates – as most of the “developed world” does. Japan has a highly advanced  economy and one of the world’s longest life expectancies at just over 81 years.

But Japan is shrinking. It faces a double whammy of falling  birth rates and negligible net immigration. Japanese society has never been  particularly welcoming of immigrants and the “fresh blood” they can provide.  Japan’s own health ministry estimates that the country will lose 1 million  people each year in the coming decades until, in 2080, it will have 87 million  citizens – more than 40% of whom will be over the age of 65.

Japanese DemographicsThere will be unbearable pressure on young workers to  provide for the aging population. And these “supporting” workers will most  assuredly not have the same job stability as previous generations of Japanese  have enjoyed. That is becoming evident even now.

This aging population will tend to want to take advantage of  an advanced, pervasive social security regime in place since the 1920s and  expanded in the post-World War II era. Supporting generations of workers will  have to come up with close to four times the amount that previous generations  contributed to the public pot.

Japan is a society which traditionally respects the  obligation of the young to the old. But as the population ages and very real  burdens fall on the shoulders of younger workers, can it be very long until  this respect turns into resentment and this aspect of Japanese culture is lost  or changed forever?

This article was originally published by Money Morning under the title Big Problems: These Countries Are Facing Demographic Time Bombs and was reprinted by permission.

See also:

What to Expect When No One’s Expecting: America’s Coming Demographic Disaster The K-12 Implosion Tomorrow’s World: A Look at the Demographic and Socio-economic Structure of the World in 2032 Earth Wars: The Battle for Global Resources

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