Tuesday, April 12, 2011

in the future, US will be alone near the top ... (good thing)

By 2030, it will be stagnant or contracting in nearly all developed countries, the only major exception being the United States. Unless immigration or birthrates surge, Japan and some European nations are on track to lose nearly one-half of their total current populations by the end of the century. To begin with, they directly affect population size and GDP size, and hence the manpower and economic resources that nations can deploy.
For the world’s wealthy nations, the 2020s are set to be a decade of rapid population aging and population decline. The developed world has been aging for decades, due to falling birthrates and rising life expectancy. In Italy, Spain, and Japan, more than half of all adults will be older than the official retirement age—and there will be more people in their 70s than in their 20s.

Although population size alone does not confer geopolitical stature, no one disputes that population size and economic size together constitute a potent double engine of national power. A larger population allows greater numbers of young adults to serve in war and to occupy and pacify territory. A larger economy allows more spending on the hard power of national defense and the semi-hard power of foreign assistance. Even at full employment, growth in real GDP could stagnate or decline, since the number of workers may be falling faster than productivity is rising. According to the Global Entrepreneurship Monitor’s 2007 survey of 53 countries, new business start-ups in high-income countries are heavily tilted toward the young. Graying means paying—more for pensions, more for health care, more for nursing homes for the frail elderly. According to projections by the Center for Strategic and International Studies, the cost of maintaining the current generosity of today’s public old-age benefit systems would, on average across the developed countries, add an extra 7 percent of GDP to government budgets by 2030. Faced with the choice between economically ruinous tax hikes and politically impossible benefit cuts, many governments will choose a third option: cannibalizing other spending on everything from education and the environment to foreign assistance and national defense.

We may also see increasing pressure on governments to block foreign competition. Historically, eras of stagnant population and market growth— think of the 1930s—have been characterized by rising tariff barriers, autarky, corporatism, and other anticompetitive policies that tend to shut the door on free trade and free markets.

Elder-dominated electorates may tend to lock in current public spending commitments at the expense of new priorities and shun decisive confrontations in favor of ad hoc settlements. Smaller families may be less willing to risk scarce youth in war.

Aside from Israel and Iceland, the United States is the only developed nation where fertility is at or above the replacement rate of 2.1 average lifetime births per woman

the United States will still have the youth and the economic resources to play a major geopolitical role. The real challenge facing America by the 2020s may not be so much its inability to lead the developed world as the inability of the other developed nations to lend much assistance.

China’s coming age wave—by 2030 it will be an older country than the United States—may weaken the two pillars of the current regime’s legitimacy: rapidly rising GDP and social stability. Imagine workforce growth slowing to zero while tens of millions of elders sink into indigence without pensions, without health care, and without large extended families to support them.

By the 2020s, Russia, along with the rest of Eastern Europe, will be in the midst of an extended population decline as steep or steeper than any in the developed world. The Russian fertility rate has plunged far beneath the replacement level even as life expectancy has collapsed amid a widening health crisis. Russian men today can expect to live to 60.

If the correlation between extreme youth and violence endures, chronic unrest and state failure could persist in much of sub-Saharan Africa and parts of the Muslim world through the 2020s, or even longer if fertility rates fail to drop.

During the era of the Industrial Revolution, the population of what we now call the developed world grew faster than the rest of the world’s population, peaking at 25 percent of the world total in 1930. Since then, its share has declined. By 2010, it stood at just 13 percent, and it is projected to decline still further, to 10 percent by 2050.

Again, there is only one large country in the developed world that does not face a future of stunning relative demographic and economic decline: the United States. Thanks to its relatively high fertility rate and substantial net immigration, its current global population share will remain virtually unchanged in the coming decades.

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