The Global Economy in Turbulent Times

CHAPTER 91 The Ominous Demographic Dilemma¹

Demography matters. But it’s not destiny as the French philosopher, Auguste Comte, would have us believe. Other things also matter. Certainly its impact endures longer and has wide-ranging effects. Nevertheless, even demographic trends do change. What’s happening right now is extraordinary. The United Nations’ “State of World Population 2011” pointed to ominous trends. The world’s population reached 7 billion on October 31, 2011, of which only 1.2 billion (17 percent) live in the rich world; 5.8 billion (83 percent) are found in developing economies, including 851 million in the least developed. More than 4 billion (57 percent of the world) reside in Asia and the Pacific. What’s remarkable today is that about 900 million people are over the age of 60 worldwide; by 2050, they will rise to 2.4 billion as population ages and lives longer, and birth rates slide further.

The twentieth century was marked by the greatest fall in death rates. Low birthrates look likely to be the defining demographic event of the twenty-first century. Total fertility rate (TFR) now averages below 2.1 in more than 70 nations (representing 50 percent of world population). This level of TFR measures number of births that the average woman would need to bear over her lifetime to prevent population from falling in the long run.

All European nations have low TFRs today, and so do many Asian economies, including Japan, China, South Korea, and Taiwan. Russia, Japan, ...