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Falling population growth a threat to global economy

5 January 20151 comment
Photograph: Getty

Photograph: Getty

Global demographics are set to undergo unprecedented change as several of the world’s population powerhouses approach stark slowdowns with falling fertility rates and ageing populaces.

For much of the world a new era of one child families has dawned and with it the end centuries of population growth.

In China, the ceaseless population growth is about to come to an end; as it already has in the economic powerhouses of Germany, Japan and Russia.

A cultural shift in the new affluent and aspirational China, has seen that a second child is being viewed as diluting the prospects of success for the first offspring.

With improvements in standards of living, the question of family size has become a computation of financial burden – and the relaxation of one-child family planning policies won’t change that.

Less than 700,000 out of 11 million eligible families have applied to be allowed a second child.

According to the UN, by 2050 just nine countries – including India, Nigeria, Ethiopia, Indonesia and the US – will account for half of the world’s population increase.

Also, the data says, Africa’s population will be growing six times faster than Latin America’s and 15 times as fast as Asia’s.

India is expected to replace China as the world’s most populous country by 2028. Both countries at that point will have 1.45 billion people.

But even the growth in India, Africa and the Middle East will not make up for the overarching global trend of slowdown, and the rise of the one-child family.

Currently, the Earth’s population stands at 7.2 billion and is increasing at 82 million a year. By 2050, according to the UN, that growth figure will have fallen below 50 million.

China will join Germany, Japan, Russia and Thailand in having a fertility rate below the replacement levels. All will be on course for an absolute population decline.

Russia’s population collapse has been of particular interest to demographers in recent years.

Between 1992 and 2009, the population declined by five per cent, or almost seven million people.

For most of the 23 years since the collapse of communism, the birth rate has been one of the lowest in the world and its effects have been exacerbated by high death rates among men – due largely to high rates of alcoholism, smoking and pollution.

Demographers say Russia’s low birth rate is not the result of an aspirational middle class but the consequence of a society beset by a sense of hopelessness and disillusionment.

Russia’s leaders have initiated programs to reverse this trend and there is some evidence to suggest that in 2013 the birth rate exceeded the death rate for the first time since 1987.

Another worrying example is Japan, which had a peak population of 128 million in 2008 but has since lost a million citizens.

Some estimates say the country’s population will fall below 100 million by 2048 and to 87 million by 2060.

A third of the population – more than 40 million people – will die and not be replaced. The evidence of this process is clear to see in villages where schools are closing because of a lack of children and in situations where 70-year-olds are delivering meals-on-wheels to 90-year-olds.

Europe also in on course for economic decline induced by changing demographics with estimates showing that ageing populations will outstrip the workforce needed to support them.

Australia’s population is projected to double to 46 million by 2075, according to the latest population projections released today by the Australian Bureau of Statistics with medium growth.

Most experts say the drawbacks of a shrinking population fare outweigh the benefits.

A smaller workforce may have short-term benefits in wage bills but sooner rather than later an economy will face skills shortages.

As long as life expectancy remains high, falling population levels mean average age rises and the economic burden on the young becomes unsustainable.

Economies where young people work to support the old age of their parents and grandparents usually do not have the resources to invest in improvements to education or innovation or other drivers of growth.

These forces may see migration emerge as a solution to economic problems that are now emerging and the consequences of which are yet to be fully understood.

Laurie Nowell
AMES Senior Journalist