Mapping Demography: Global Hot Spots


Published on

DCFR brief complements Series "D." Topics include aging China, US Europe, youth bulges outcomes in Middle East, Africa, etc.

Published in: News & Politics, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Mapping Demography: Global Hot Spots

  1. 1. ‘‘ Global Themes an issues brief series of the Dallas Committee on Foreign Relations DCFR Dallas Committee on Foreign Relations Issue No. 4 November 8, 2011 Mapping Demography: Parsing Global Hot Spots An Interview with Jack Goldstone, eminent demographer, George Mason University Demography and growth “The world as a whole has the same age distribution as the United States had in the 1970s, just before we had two decades of growth. But the world is divided Jennifer Warren: Commentators have into countries that are very old and very young. If markets are not integrated, suggested that Japan’s aging society both are going to have severe problems. ” will reduce growth prospects. In light of other developed countries are running out of options. Japan again. Absent a giant new surge having falling replacement ratios, hasn’t had growth or the prospects that makes people more productive, i.e. reduced population growth, isn’t for growth for a long time. The result we’re not going to get there. I don’t there another way to look at this? has been kind of political infighting see slowing population as a minor and stalemate. A generation of young problem; it changes the game. Jack Goldstone: There is no people are growing up not expecting getting away from the fact that JW: Even with favorable growth. There is no easy way out. when population growth ends, many demographics in many developing factors that are good for economic If you look at the population of the countries, is it really a proper strategy growth also end. You don’t have world as a whole, the age distribution for the many global firms seeking family formation. You don’t have looks fine. The world as a whole new markets to simply target growth people saving as much. Instead, they has the same age distribution as areas, or should they be taking a more begin to draw down their savings. the United States had in the 1970s, nuanced view of growth markets? There are fewer young people who just before we had two decades of are the innovators and leading growth. But the world is divided into JG: Firms have to be careful. The edge consumers coming into the countries that are very old and very developing world and emerging market. You can compensate for young. If markets are not integrated, economies vary greatly in the rule that. There are plenty of people in both are going to have severe of law, reliability and stability of the world who would love a chance problems. government, and human capital of to live in developed countries. their workforce. You can’t just pour But most of the rich countries are JW: There is definitely a need money into poor countries and hope. hostile to immigration. In Japan, for for novel ways forward and belt There will be convergence, and example, they consider immigration tightening. a weakening of their national fiber, and have ruled it out. The other JG: Again, a country gets rich On September 28th, DCFR President alternatives for growth are to borrow, according to the productivity of its Jennifer Warren interviewed Jack which Japan has done hand over people. If there are fewer people, Goldstone, director of Center for Global fist. They’re more indebted than being more productive results in Policy, George Mason University. any other country in the world. growth. However there are no signs This brief’s content is based on his Their debt is 200% of GDP, but it’s of a big surge in productivity. We had comments and complements the owned internally and not the panic a surge in the ‘80s and ‘90s but in 2011-12 Series “D” programs, a DCFR situation as it is in Europe. They recent years, productivity has slipped initiative. 4925 Greenville Ave, Suite 1025 | Dallas, Texas 75206 | 214.750.1271 |
  2. 2. 2they’ll grow. Some will grow; some Indonesia is the same. Turkey has the we’re not doing that. We’re tellingwill have disasters. For example, advantage of a wonderful geographic the best and brightest students amongI would not invest in Northern location for trade. I’m not basing our immigrants and among want-Nigeria now because it’s very these assessments solely on the fact to-be immigrants: ‘You can’t comevolatile. On the other hand, Turkey that they have many young people. here.’ We’re cutting back on basicis making great strides. Mexico They’re also well-placed for their research funding. Obama is trying tostill has great potential despite its young people to work and increase improve that a bit. However underproblems with criminal elements. their output. the new climate of discretionaryMuch of the economy is undergoing spending cuts, it is hard to see howa rapid industrialization. With many Safety Nets that will grow. We’re not focusinginvestment alternatives, you have to on innovation policy to the levelsbe selective, and growth is scattered JW: How drastically must the U.S. necessary to play catch up. America’saround the globe. change entitlements, given growth not going to be aging as severely as prospects coupled with an aging Italy and Germany, but we shouldn’tJW: There has been popular interest population? Can you compare the simply assume that we’re out of thein the BRICs (Brazil, Russia, India, U.S. to Germany and Italy since they woods. Our health costs will kill usChina) for many years. Is the idea of have slightly worse numbers than us if we don’t get our finances underthe TIMBIs (Turkey, India, Mexico, demographically? control.Brazil and Indonesia) your own newconcept? What can you say about JG: Germany and Italy have lower JW: Developing countries such asthem as growth markets? fertility rates and so will be aging China and Indonesia have need for faster. But America has much higher social safety nets. What should beJG: What they all have in common, rates of health care cost increases. learned from the experiences of theunlike China, are fast-growing labor In comparing two countries, one of Western world — the U.K., France,forces. Unlike China, the education which pays twice aslevel of their workforce is increasing much for health careas well. China has already made a and only has halflot of progress in that regard. The the aging problem,TIMBI countries are still catching it is going to be asup. In particular, the quality of troubled as a countryhigher education has a long way to that pays half as muchgo in Brazil, Turkey, and Mexico to for health care but hascatch up to European and American more elderly. There’sstandards. But it is happening. The no getting around this.ambitions are clearly there. The Either we drasticallyUniversity of Sao Paolo wants transform our healthto be a world-class university. A system to get lowernumber of Turkish universities are prices or we havevigorously pursuing exchange with no real advantageEurope and the U.S. to upgrade. with regard to agingSo the quality of the workforce is compared to the European countries. Germany, U.S., Italy, and Spain —going to be increasing fast. And with entitlement issues. Is there anyunlike China, these countries are Even though America has a more country managing this issue properlystill modest in size relative to their favorable demographic profile with social safety nets?export market. China’s economy has than the worst European countries,become so large that it can’t grow including Japan and South Korea, JG: Yes, they are in developingsimply by substituting its exports for it still doesn’t have as favorable a countries. The number one lessonconsumption in rich countries the demographic profile as it did from is— don’t make promises you can’tway it used to. 1950-2000. From 1950-2000, the keep. China is doing everything they U.S. labor force grew by about 1% can to avoid stacking up liabilitiesMexico, Brazil, and Indonesia— a year, as did Europe’s. Europe’s for its aging population. Fortunately,their economies still have room growth is heading toward zero. those that are going to be elderly into grow. They also have better America’s growth, though it will China don’t expect the government toresource positions. Brazil not only continue, will fall to about 0.75%. take care of them the way we do here.manufactures, it is a rich commodity If our labor force growth falls by They do want some pensions, buteconomy. In Mexico, while oil is 75%, we have to make up for that they still will depend more on theirdiminishing, it still is producing. with increases in productivity, but children’s earnings, and they will be
  3. 3. 3able to do that for another generation. “The real key to modern wealth creation is innovation and having a knowledge economy.China’s labor force growth is slowing China is a long way from doing that successfully; and I don’t believe that in an authoritar-but their severe aging won’t set in ian, information-controlled context, they can really be successful at it.”until after 2030, whereas ours isalready starting. So they have about a Rwanda, Burundi, and Ethiopia, with actually produces cars cheaper thantwenty-year grace period to develop strong authoritarian governments, China.policies. popular support and an emphasis on economic issues. That has been JW: Did you see India’s Nano carThe other lesson they have also working for a while. However even in decked out in jewels?learned from us — if you make China, the demands for accountabilitypromises of future liabilities — then are starting to get stronger. For the JG: Last time I was in China, peopleaccount for them properly. China is next ten or fifteen years, China’s were buying diamond-studded cellconsidering their demographic profile influence in the world will continue phones for $10,000 each. There’s aand trying to determine how to create to grow. But China’s own internal lot of money floating around there.more balanced growth. conflicts about the degrees of JW: There is a great deal of unrest democracy, accountability, and about China’s own environmentalChina transparency will be increasing. problems. Citizens are becomingJW: Given Africa’s plight (and JW: You write in your blog, there is more concerned and makingunderstandably different countries an over-emphasis on China, a sort demands. They’re going to have tohaving different scenarios of course), of China-phobia. It’s interesting for start spending money on greeningwhat might be a better approach for their economy. writers to write about China, but isAfrican states that are affected by this China-phobia really warranted?China’s resource quests? JG: They will spend on the environment but none of this is going JG: A lot depends on whether EuropeJG: African countries are learning to shut off growth. They still have and the U.S. collapse, which was notto play India against China because considerable modernization needed in the picture two years ago. If theIndia now is starting to follow China internally. At most, the days of 8-10% U.S. really bogs down to 1% growthin investing overseas, particularly growth are going to last another few for five or ten years while Chinain land but also in manufacturing years. keeps going even at 6 or 7%, thenfacilities. African countries are they could catch up very quickly.learning from the Chinese approach JW: It’s just like the stock marketto Western investors: ask for joint returns of 8-10% are now 4-5%, if The real key to modern wealthprojects instead of China-controlled you’re lucky. creation is innovation and having aprojects. Seek technology transfer, knowledge economy. China is a long JG: On the bright side, we’ve nowand require long-term commitments. way from doing that successfully; had ten years with no growth inChina is building infrastructure in and I don’t believe that in an the market. The odds are it will beAfrica. That’s good for China because authoritarian, information-controlled another ten years. If you can delayChina needs the infrastructure to context, they can really be successful your retirement for twenty years, youexport goods and commodities at it. I see their growth petering out, should have ten years of good growthfrom those countries back to China. in part because they will pay more for after that.Fortunately, infrastructure cannot be their raw materials. Labor is gettingsuddenly withdrawn like financial more expensive, so they are losingcapital. That puts the African their niche ascountries dealing with China in a the low-costslightly better position than Latin manufacturer.American and Asian countries that I don’t seereceived considerable financial capital them movingthat was then divested at the sign of up the valuedownturn. chain anytime soon. TheyJW: It’s easier to turn the spigot off manufacturethan to stop a road or whatever you’re cars betterbuilding. than in the past, but IndiaJG: The Chinese economic model hasbeen very attractive for places like
  4. 4. 4 November 8, 2011Africa to respect human rights to a greater government, and absorb whatever degree. They even had a reformer in problems follow. It is not fair to them.JW: What should the U.S.’s goals be Gorbachev, who wanted a modern But if they had the entire Africanto help Africa with its varied security face for Russia. They have moved Union with them and some strongerissues, failing states, and country-by- backwards a bit now with Putin. The support with other developingcountry low-income distributions? human rights situation is horrible countries, they might be able to pull in Russia if you’re a reporter or that off. Oddly enough, even BurmaJG: The goals are easy to state, but a businessman who wants to be has been giving more freedom tohard to accomplish. The goals are a independent of the Kremlin. You protesters. There’s hope everywhere.more democratic Africa with stable have no protections. But for ordinarygovernments, good rule of law, Russians, the human rights situation JW: Are there European countries thatand moderate balanced economic is still better than it was for most of could help Africa in ways that thegrowth. You want Africa to look Soviet history. U.S. cannot because of proximity andlike Denmark or Switzerland, fine. past influence?The difficulty is what U.S. policy In Africa, the human rights situationshould be in order to promote that in many countries is improving. JG: Even though France and Britaingoal; we have many disagreements There’s a long way to go particularly are trying to keep up their financialas to means. Some say: ‘Leave things with corruption and accountability support for activities in Africa, it’salone; let the markets grow naturally.’ of rulers. In many ways, the Arab going to be difficult. It is no longerOthers comment that markets can Spring was more about accountability the case that the West is flush withbe very dangerous and divisive, and corruption than it was about cash to spend, and developingespecially when you have corrupt popular sovereignty. People were countries able to absorb it. Frankly,governments and ethnic conflicts. just fed up with government stealing. that didn’t work out so well anyway. The African Union was the last The shift in development assistanceMy suggestion is to leverage global group to recognize the fall is going to be more in the directionregional political organizations. The of Ghaddafi’s government in Libya, of technical assistance and tradeAfrican Union can be a force for but they’ve come on board now. agreements and less in the waygood if it starts setting a standard South Africa has been supporting the of loans and direct aid. Technicalfor democracy and accountability Mugabe government in Zimbabwe assistance is very important foramong its own members. Frankly, because they don’t want to be dealing with anti-corruption and theAfrican countries will listen to inundated with potential refugees. But rule of law. Trade agreements areAfrican rulers much more than they need to be embarrassed more most important for economic growth.they’ll listen to outsiders. But can about this. They need to be told that There are terrible obstacles for textileyou persuade enough African leaders this Mugabe regime is a human rights exports, for example, from Norththat it is in their interest? One has to travesty and South Africa should not Africa to Europe. Pakistan doesn’tstart with human rights, rule of law, have the respect of its neighbors if it’s have favored textile exports statusand fighting corruption, rather than going to prop up this regime. with the U.S. They receive a fewstarting with democracy. There are billion dollars in military aid from us,too many governments in Africa who JW: And South Africa is supposed but what they really need is exportare concerned about democracy and to be kind of a leader in the region markets and we deny them that. Wenot willing to push for democracy. and in some respects, one of the should not expect these countries toOn the other hand, everybody wants most advancedeconomic growth and development, democracies inbut excess corruption and human Africa.rights’ violations damage growth anddamage Africa’s reputation. JG: However with 40%The U.S. should go back to what unemployment,worked actually at the end of the it has its ownCold War, when we didn’t attack problems. I canthe Soviet Union head on, but tried understand itsto bring them into a global human reluctance. Yourights regime that called attention cannot expectto their problems. They were then South Africaforced to deal with a larger and more to prop up thevocal dissident movement and had Zimbabwe
  5. 5. 5do better economically, and expect “I think that Egypt will move into a reasonably competitive election. The Islamiststheir young people to look forward to will not dominate the parliament. There will still be problems with corruption anda future, if we won’t trade with themas freely as we trade with Europe. accountability, but Egypt can have a spirited free press, active labor unions, and political participation.”JW: That’s a good point… either democracy or international Algeria should remain stable andJG: The U.S.-Pakistan relationship governance to move forward. Tunisia slowly follow the other countries inis just at rock bottom right now. The and Egypt both have pretty large the region. If the other countries looktrade agreement is one of the few cadres of people who have served like their democracies are workingthings that could move it forward. in international organizations. Libya out, Algeria will be pressured to has some, but fewer. They’re relying reform. If there’s a renewed civilMiddle East a more on ex-pats. They can use war in Libya, then things could get external assistance. If you would complicated. With Algeria, we haveJW: Can you play forward your grade the future of Libya based on to wait and see.observations about countries of note how well the transitional governmentin the Arab Spring? has performed so far, you’d have to Syria is the big question right now. say they’ve done extremely well. An earlier blog post of mine wasJG: I remain optimistic. I think that “Serious in Syria.” The level ofEgypt will move into a reasonably Compared to what happened in Iraq violence has recently escalated. Therecompetitive election. The Islamists it’s night and day. In Iraq there was was a young woman whose brotherwill not dominate the parliament. looting and sectarian rebellions early was an activist. She was tortured andThere will be some extended power on. Whereas the national transition brutally murdered. The army movedstruggles and there will be some council in Libya has kept supplies, into a suburb of Aleppo. That’sefforts to shape the constitution food and water available. They’ve new. Aleppo hadn’t been touchedto favor this or that group. The managed to squelch conflict. There before and now it’s becoming partmilitary will want a special position. is no looting. People say this is of the battleground. That would beThe power of workers, students surprising. It looks good. important.and professionals will be able tostand up to that of the military and Morocco is a very important country. A number of defectors from thethe Islamists; you’ll have a wide- It has been under the radar because Syrian army have said they willopen competitive political system. its change has been less violent. start planning for a non-resistantIt will be chaotic. There will still The monarch has moved forward movement using our militarybe problems with corruption and with constitutional reform in a way experience. I think we’re reachingaccountability, but Egypt can have that has generally pleased and not a stage now where peaceful protesta spirited free press, active labor frustrated people. If they can keep has not brought the gains that wereunions, and political participation. that up, they will do well. expected, and people are looking for new ways. They’re not giving up.Tunisia should be similar. A lot Jordan has not moved as fast as I would like to see more economicdepends there on whether the Morocco, but I think they need pressure through strikes. It’s difficultIslamists are able to unify. In Egypt, to follow Morocco and give to organize strikes because Syriathe Islamists are so divided between more support to a constitutional is watching unions and labor somoderate Islamists, extremists, young government if they want to keep their closely; it’s hard to get messagesand old, that I’m not too worried. But population satisfied. out to organize them. The defectionsTunisia has a more established and from the military remain small. Ifunified Islamist party that could be Bahrain is going to remain troubled. they increase, as they could, withstronger. I still think that Tunisia will They have divisions within the more bloodshed and martyrdom, thatbe like Egypt. monarchy and between the monarch, would be significant. The economy the prime minister, and the crown is continuing to weaken. Europe justLibya: One has to worry about the prince. They all differ in how sanctioned Syrian oil, and that willreal risk of ongoing conflict because much they’d like to work with the hurt.the leadership is weakly established. opposition. The Shia oppositionThere are many regional ethnic remains very intent on pushing for JW: How much do they produce?divisions in the country. This is a change although they’re not amassingcountry where NATO needs to remain in the streets because they know they JG: It’s about 10% of the economyinvolved in peacekeeping, police can’t do it. They’re still threatening to and a larger percent of governmenttraining, and helping a country that strike and protest, if they can. revenues. Ninety percent of their oildoes not have much experience with goes to Europe. That’s a big market
  6. 6. 6 grow up in a developing country. Almost half of them will be in China and India, the rest of Africa, Latin America, and other parts of Asia. Without a decent education and a solid chance for a future, we face a world fifty years from now where 80-90% of the workers are less productive than the workers in leading countries today. That will be deadly for them and for us. I don’t think enough is being done about this. There is room for some major global philanthropy to create a global campaign. Global literacy is improving. The younger generationfor them and that’s going to be a strengthened and renewed, and in is 95% literate in China and 80%significant loss. other respects, changed. We need to in India. But between 5th grade and act together and determine what we college — where young people needOne of my friends speaks of a silent as a country will do to assure our to acquire technical skills and creativemajority in Syria that hasn’t spoken future. Instead, people are fighting thinking skills — that’s where it’s notout. If the economy continues to over the pieces. happening. Teaching people to read,deteriorate, the silent majorities will write, and basic arithmetic is easyjoin the protestors and that will put Collectively there is agreement for but it’s not enough for the economy.the government on the ropes. the need to change but nobody wants If they don’t learn some algebra and their own benefits cut or taxes raised. how to write well, at this point theyJW: Sounds like what’s happening If everybody thinks that way, we’re in don’t get it. You can teach technicalin our country in a way with deficits trouble. The same thing is happening skills later, and we need those inand debt. The silent majority is finally in Europe, where they were making the world, too. But the generationspeaking up? progress towards European Union of leaders will be very small, which and financial integration, but not can suffice, but you’re taking aJG: Obama is on the ropes. People enough to create a common European tremendous amount of potential offare definitely fed up. A majority do treasury. No government wanted to the table. That’s my biggest worry.not support the Tea Party policies, but give up that much control over itsthey support the Tea Party attitude. national economy. Now there is a Rich countries have their problems, European-wide fiscal crisis that can’t and I think the problems of AmericanDemographic time bombs be solved with seventeen different education are exaggerated. We have countries, each following their own more of an inequality problem thanJW: What is the most pressing time policy. No one is willing to budge. an overall quality problem. In sobomb, in your mind? What’s the one I worry that in the short term, we’re many American schools, we havethat worries you the most? heading towards another serious 15% - 20% students who are actuallyJG: There’s a short-term time bomb long depression because of political coming from really difficult familyand a long-term one. One that I did deadlock. I call this the “selfish situations and struggling before theynot foresee and doesn’t really have elite syndrome” — rich countries’ even get to the school’s gate. That is aanything to do with demography, is economies suffer major hits because different problem in education.the severe dysfunction of European they’re not willing to face up to their liabilities. Kids are eager to learn in developingand American governments. We have countries. Teachers’ salaries arebig problems on the horizon. The The longer term, the big bomb I stolen at the ministry. They don’tworld is going through a dramatic worry about, is the quality of the have school books or paper (in India).change. The policies that worked so labor force in the developing world. Some will overcome that. The worldwell for us in the past will not work Nine of out every ten children will needs a new set of breakthroughs –in the future. They may need to be
  7. 7. 7and they won’t all come from the US In Africa, Addis Ababa is a relatively concept vehicles. Paul Romer hasor Europe anymore. safe and pleasant city for Africa. a company that is trying to get Chinese workers are improving developing countries to turn over theUrban issues the infrastructure, but it works governance of cities to professional mainly because the government is administrators. They provide theJW: What about urbanization and reasonably attentive to providing technocratic managers for the city incity-level issues with growth? security for the city as a whole. a country to make it environmentallyJG: A number of the middle-sized You can walk around without being sustainable but still economicallycities in China, in the 3-5 million accosted. Other cities, not so much. viable.population range, are doing a very People used to look at Cote d’Ivoiregood job trying to build their cities and Abidjan but the civil war hasup. The model for many developing destroyed cities is something like Most cities in China are just goingPittsburgh, which has gone from a headlong for growth, same inrather dirty, productive steel town to Indonesia and India. Although ina clean, beautiful, intellectual service India, some high-tech cities aremedical hub. The model will not be improving their surroundings. OnNew York City or Washington. The the one hand, you have fast-growing,goal for many third world cities is to horribly-polluted, growth-at-all-costachieve a balance — have enough cities like some in China. There areclean water and open space, keep the overrun cities that are not copingworkforce employed, and move into very well like Karachi and Mumbai.the global service sector or high-valuesectors. A recent case, Rio de Janeiro, There are these pristineis making an effort to pull itself up demonstration model cities thatfrom crime and drug problems. It countries build as cities of theis becoming a pleasant place to live future, but they’re not practicalagain. Having some offshore oil may or self-sustainable. These modelgive them the revenues to do that. eco-cities are toys essentially or GeoEdge The Dallas Committee on Foreign Relations takes no institutional positions on policy issues. The views ex- pressed and facts presented in DCFR publications are the responsibility of the author or authors. BLOG Exploring the frontlines For additional information about DCFR, please visit our website of foreign affairs at Dallas Committee on Foreign Relations is a non-profit organization focused on explor- ing leading-edge developments in foreign affairs. Our mission is to promote knowledge of global affairs and a better understanding of the people and events impacting impor- tant policy choices of the future.For more information contact:Dallas Committee on Foreign Relations4925 Greenville Ave, Suite 1025 Dallas, Texas 214.750.1271