EUROPEAN PAPERS ON THE NEW WELFARE

The Graying of the Great Powers – Demography and Geopolitics in the 21st Century

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This part of our publication presents texts which are not original. They are motivated and written under various contexts: they provide an insight on the fact that the lenghtening of the life cycle is of greater and greater concern and interest in many different directions. The counter-ageing society is an issue which needs to be perceived on the basis of a true, practical as well as theoretical, multidisciplinary approach. On the basis of this larger vision, the work, activity and research of any specialist can be better appreciated and given value within the framework of a global background of reference.

Book Summary

In the spring of 2008, the Global Aging Initiative at the Center for Strategic and International Studies published the Graying of the Great Powers, an in-depth study of the geopolitical implications of ‘global aging’— the dramatic transformation in population age structures and growth rates being brought about by falling fertility and rising longevity worldwide. The viewpoint of the study is that of the United States in particular and of today’s developed countries in general. Its timeframe is roughly the next half-century, from today through 2050.
The study explains how population aging and population decline in the developed world will constrain the ability of the United States and its traditional allies to maintain national and global security. It not only assesses the direct impact of demographic trends on population numbers, economic size, and defense capabilities, but also considers how these trends may indirectly affect capabilities by altering economic performance, social temperament, and national goals. The study also looks closely at how the striking demographic changes now under way in the developing world will shape the future global security environment — and pose new threats and opportunities for today’s graying great powers.
This overview summarizes the study’s main findings under two headings: findings about the demographic transformation and findings about its geopolitical implications. It also lays out a framework for policy action.

1. Major Findings: The Demographic Transformation

1.1 The World Is Entering a Demographic Transformation of Unprecedented Dimensions

Global aging is not a transitory wave like the baby boom that many affluent countries experienced in the 1950s or the baby bust that they experienced in the 1930s. It is, instead, a fundamental demographic shift with no parallel in the history of humanity. “When this revolution has run its course,” observe aging experts Alan Pifer and Lydia Bronte, “the impact will have been at least as powerful as that of any of the great economic and social movements of the past”.2
Consider median age. Until the beginning of the twentieth century, a national median age higher than 30 was practically unheard of. As recently as 1950, no nation in the world had a median age higher than 36. Today, 8 of the 16 nations of Western Europe have a median age of 40 or higher. By 2050, 6 will have a median age of 50 or higher. So will Japan, the East Asian Tigers, and 17 of the 24 nations in Eastern Europe and the Russian sphere (see Figure 1). Or consider population growth. Throughout history, populations have usually behaved in one of two ways. They have grown steadily, or they have declined fitfully due to disease, starvation, or violence. In the coming decades, we will see something entirely new: large, low-birthrate populations that steadily contract. There are already 18 countries in the world with contracting populations. By 2050 there will be 44, the vast majority of them in Europe (see Figure 2). As historian Niall Ferguson has written, we are about to witness “the greatest sustained reduction in European population since the Black Death of the fourteenth century”.3

Figure 1: Countries Whose Median Age Is Projected to Be 50 or Over in 2050*
jackson_fig1.gif

*Excludes countries with populations of less than 1 million.

Source: World Population Prospects (UN, 2007); and Population Projections for Taiwan Area, 2006-2051, Council for Economic Planning and Development, Taiwan, www.cepd.gov.tw/encontent/. For demographic scenario, see The Graying of the Great Powers, appendix 1, section 3.

Figure 2: Countries Projected to Have Declining Populations, by Period of the Decline’s Onset*

jackson_fig2.gif

*Excludes countries with populations of less than 1 million.

Source: See Figure 1.

1.2 The Coming Transformation Is Both Certain and Lasting. There Is Almost No Chance That It Will Not Happen — Or That It Will Be Reversed in Our Lifetime

The public may suppose that population projections 50 years into the future are highly speculative. But in fact, demographic aging is about as close as social science ever comes to a certain forecast. Every demographer agrees that it is happening and that, absent a global catastrophe — a colliding comet or a deadly super virus — it will continue to gather momentum.
The reason is simple: Anyone over the age of 45 in the year 2050 has already been born and can therefore be counted. And though the number of younger people cannot be projected as precisely, few demographers believe that low fertility rates in the developed world will recover any time soon. Even if they do experience a strong and lasting rebound, the declining share of young (childbearing-age) adults in the population will delay the positive impact on age structure and population growth. Because of demographic momentum, population growth takes a long time to slow down. Once stopped, it also takes a long time to speed up again.

1.3 The Transformation Will Affect Different Groups of Countries at Different Times. The Regions of the World Will Become More Unalike before They Become More Alike.

As the term global aging correctly implies, nearly every country in the world is projected to experience some shift toward slower population growth and an older age structure. This does not mean, however, that the world is demographically converging. Most of today’s youngest countries (such as those in sub-Saharan Africa) are projected to experience the least aging. Most of today’s oldest countries (such as those in Europe) are projected to experience the most aging. As a result, the world will see an increasing divergence, or ‘spread,’ of demographic outcomes over the foreseeable future.
During the 1960s, 99% of the world’s population lived in nations that were growing at a rate of between +0.5% and +3.5% annually. By the 2030s, that 99% range will widen to between -1.0% and +3.5% annually. By then, most nations will be growing more slowly, and indeed many will be shrinking — but some will still be growing at a blistering pace of 3% or more per year. In the 1960s, 99% of the world’s population also lived in nations with a median age of between 15 and 36. By the 2030s, that 99% range will widen to between 18 and 54. Here again, the trend is toward increasing demographic diversity.

1.4 In the Developed World, the Transformation Will Have Sweeping Economic, Social, and Political Consequences That Could Undermine the Ability of the United States and its Traditional Allies to Maintain Security. The Consequences Can Be Divided into Three Main Types.

Changes in Demographic Size. The growth rates of the service-age population, of the working-age population, and (therefore) of the GDP in the typical developed country will all fall far beneath their historical trend and also beneath growth rates in most of the rest of the world. In many developed countries, workforces will actually shrink from one decade to the next—and GDPs may stagnate or even decline.
Changes in Economic Performance. As populations age and economic growth slows, employees may become less adaptable and mobile, innovation and entrepreneurship may decline, rates of savings and investment may fall, public-sector deficits may rise, and current account balances may turn negative. All of this threatens to impair economic performance.
Changes in Social Mood. Psychologically, older societies will become more conservative in outlook and possibly more risk-averse in electoral and leadership behavior. Elder domination of electorates will tend to lock in current public spending commitments at the expense of new priorities. Smaller family size may make the public less willing to risk scarce youth in war. Meanwhile, the rapid growth in minority populations, due to ongoing immigration and higher-than-average minority fertility, may undermine civic cohesion and foster a new diaspora politics.

1.5 In the Developing World, the Transformation Will Have More Varied Consequences — Propelling Some Countries Toward Greater Prosperity and Stability, While Giving Rise to Dangerous New Security Threats in Others

At the opportunity end of the spectrum, some developing countries will learn to translate the ‘demographic dividend’ created by their declining fertility into higher savings rates, greater human capital development, efficient and open markets, rising incomes and living standards, and stable democratic institutions. Some will follow the meteoric success path of a South Korea or Taiwan, others the slower-but-still-steady success path of an India or Malaysia.
A larger share of the developing world, unfortunately, stands nearer to the challenge end. There are the countries (most notably, in sub-Saharan Africa) least touched by global aging, whose large youth bulges, high poverty rates, weak governments, and chronic civil unrest offer the least prospect of success. There are the countries (most notably, in the Muslim world) where population growth is declining and substantial economic growth is more likely — but where terrorism and destructive revolutions and wars are also more likely. And then there are the countries whose demographic transformation will be so extreme (Russia) or is arriving so rapidly (China) that it could trigger an economic and political crisis. Russia, Ukraine, and the other Christian countries of the Commonwealth of Independent States (CIS), afflicted both by very low fertility and declining life expectancy, are projected to lose an astonishing one-third of their population by 2050. China, having suddenly adopted a one-child policy in the 1970s, will face a developed country’s level of old-age dependency with only a developing country’s income.

2. Major Findings: The Geopolitical Implications

2.1 The Population and GDP of the Developed World Will Shrink Steadily as a Share of the World Totals. In Tandem, the Global Influence of the Developed World Will Likely Decline

During the era of the Industrial Revolution and Western imperial expansion, the population of what we now call the developed world grew faster than the rest of the world’s population. From 17% in 1820, its share of the world’s population rose steadily, peaking at 25% in 1930. Since then, its share has declined. By 2005, it stood at just 13% — and it is projected to decline still further in the future to below 10% by 2050 (see Figure 3). As a share of the world’s economy, the collective GDP of the developed countries will similarly shrink, from 54% in 2005 (in purchasing power parity dollars) to 31% by 2050 (see Figure 4). Driving this decline will be not just the slower growth of the developed world, but also the surging expansion of such large, newly market-oriented economies as China, India, and Brazil.
Implications: In the years to come, developed-world security alliances will need to fortify their global position by bringing powerful new members who share their values and goals into their ranks as equal partners. They will also have to be alert to threats from powerful new peer competitors, acting singly or in concert, who may wish to challenge the existing global order. By 2050, the very term ‘developed nations’ is likely to encompass several gigantic new economies. Today’s long-term security planners need to prepare accordingly.


The Graying of the Great Powers can be purchased at www.csis.org/component/option,com_csis_pubs/task,view/id,4453/ . For inquiries, please contact Keisuke Nakashima at knakashima@csis.org.
Richard Jackson and Neil Howe are, respectively, senior fellow and senior associate at the CSIS Global Aging Initiative. Keisuke Nakashima and Rebecca Strauss, also with CSIS, contributed to the study.
2 Alan Pifer and Lydia Bronte, “Introduction: Squaring the Pyramid,” in Our Aging Society: Paradox and Promise, eds. Alan Pifer and Lydia Bronte (New York: W.W. Norton, 1986), 3.
3 Niall Ferguson, ‘Eurabia?’ The New York Times Magazine, April 4, 2004.


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