Theme
This analysis focuses on the potential shift in power relations as a result of the world’s changing demographic landscape, and how this is likely to influence the European outlook on the future.
Summary
A thorough understanding of world demographic processes is of paramount importance for policymakers. In this paper I focus on the heterogeneous growth of the world’s population, a trend which started in the last century and should become accentuated in this one. I look into how this might change the influence of different countries around the world, thereby altering the political reality of today and, as a result, the available policy choices for tomorrow.
Analysis
We have already seen the first signs of a shift in world population gravity whereby the population in some countries and regions is outgrowing the population in others. In the past century it was Asia that reinforced its position as the dominant continent in terms of populationvis-à-vis Europe and most other continents as well. This trend should continue in the coming years. Furthermore, we are likely to see the upsurge of Africa as a major continent in terms of population, thereby becoming a new population gravity centre beside Asia. Apart from the relative distributional changes in favour of Asia and Africa, we must also prepare for additional total growth of the world population.
Contrary to what many people have been led to believe by frequent news regarding weak or weakening fertility in the foreseeable future, stagnating population growth is primarily the concern of a very small group of countries such as Japan and many of the countries in Europe. For the vast majority of the countries on Earth, population continues to grow, rapidly or even very rapidly, as we progress into the 21st century. Global population growth is unlikely to reverse, or enter into a state of equilibrium, before the end of this century. What does the immediate future have in store? From the projections available it is difficult to tell with any degree of exactitude, but applying the UN’s ‘Medium’ variant (see below for a brief explanation), population growth prospects for the first half of the 21st century look similar to the trends experienced in the half-century we have just left behind.
Considering that in the period from 1950 to 2000 the world’s total population rose from 2.5 billion to over 6 billion (an increase of more than 3.5 billion), future prospects according to this particular forecast are anything but irrelevant. The UN ‘Medium’ variant estimates a total world population increase of close to 3 billion for the next 50 years. An increase of this magnitude would mean that the world’s total population should approach 9 billion by 2050 (see Figure 1).
Similarly to what we saw in the 20th century, most of the coming population increase will take place outside Europe and the more developed world. One important difference between the next 50 years and the half-century we have just left behind is that Africa will take over from Asia as the fastest growing continent, with an increase of more than 1 billion people, up from 795 million to 1.8 billion by the year 2050. In absolute terms, Asia still accounts for the largest total growth, with a 1.5 billion increase, up from 3.7 billion to 5.2 billion. Thus, compared with the period 1950-2000, when Asia’s total growth was 2.2 billion, the UN estimates that Asia’s growth rate should slow down substantially. Together, Asia and Africa should account for 80% of the world’s population by 2050, up 5 % compared with the year 2000 (see Figure 3). Nevertheless, this is only one possible scenario. If fertility and mortality rates are different to those assumed by the UN’s ‘Medium’ scenario, the future size of the world’s population might be either under- or over-estimated.
In the ‘Medium’ scenario, which I use as the baseline scenario in this analysis, the assumption about future fertility rates rests firmly on an observed trend towards decreasing fertility world-wide. While this seems reasonable at the moment, as with all future events things might not turn out as expected. For instance, changing behavioural trends might result in higher as well as lower fertility rates than assumed today. Mortality risks, which are declining steadily across the globe, could suddenly increase as a result of outbreaks of new diseasesor if current epidemics, such as HIV/AIDS, develop in different ways than expected by scientists. Mortality rates might also improve drastically as a result of major scientific advances in combating deadly diseases such as cancer. The truth is that we can only speculate about the future.
However, the UNalso offerssome optional scenarios. These should not be considered to be in any way exhaustive, but rather serve as a reminder that the true future size of the world’s population is difficult to pinpoint and that very small alterations in fertility or mortality rates can give rise to significant differences.
Figure 2 shows the three scenarios offered by the UN. Common to all its projections is the assumption about mortality risks. Thus, the only difference is how fertility is allowed to vary over time. The ‘Medium’ variant, as mentioned above, assumes that the fertility levels continues to decline according to the current observed trend and subsequently stabilises below the replacement level in an increasing number of countries around the world. The ‘High’ and ‘Low’ scenarios are both deviations from the ‘Medium’ scenario’s assumption about future fertility levels. In the ‘High’ scenario, fertility levels do not contract as much as assumedfor the ‘Medium’ variant, while in the ‘Low’ scenario fertility levels contract further. Thus, the ‘High’ and ‘Low’ scenarios provide a confidence interval for the assumptions made in the ‘Medium’ variant. Our conclusion from Figure 2 is that if the UN’s general assumptions about declining fertility rates are correct, the world’s total population is likely to be within the 7.5-10.5 billion interval by the year 2050, which is a margin of error of 1.5 billion in either direction compared with the figure provided by the ‘Medium’ scenario.
In the not altogether unlikely event that the general assumptions about future developments in fertility and mortality rates are incorrect, the UN’s three main projections would, of course,become invalid. Just how wrong the projections would be is impossible to tell since we do not know by how much or in which direction these vital rates could change. However, as an illustration,we can assume that fertility remains constant at present levels, ie, the level observed in 2002, throughout the world for the period 2002-50. In the unlikely event that this should occur, the population explosion we saw in the 20th century would then accelerate for much of this century. The constant projection in Figure 2 illustrates this scenario. Instead of approaching 9.5 billion as suggested by the ‘Medium’ scenario, under these circumstances the world’s population would come close to 13 billion by 2050, which is double the size today. By 2010 we should have a better idea of which of these options we are likely to be heading for in 2050.
Regardless of what the future will look like, unless the globe experiences a deadly plague of the magnitude of the Black Death, we know that the world’s population will increase. This is true even if fertility decreases faster than expected; the issue of how much is purely academic. A more important question is: what are the implications of the coming population increase?
First, we must be clear about where the population increase is likely to be most significant, and in what type of countries it will take place. As mentioned previously, Asia and Africa are likely to account for 80 % of the world’s population by 2050 (see Figure 3).
Although Asia has always been a continent with a large population, until recently Europe and North America could at least partly measure up to Asia in terms of size. For example, in 1950 Europe and North America had a very significant share of 29 % of the world’s population. Since then, particularly in Europe’s case, their share has rapidly declined.
At the turn of the millennium, Europe and North America together were home to 17 % of the world’s population in 2000 (12 % in Europe’s case and 5 % in North America’s), a decrease of more than 10 percentage points compared with 1950. By 2050, Europe’s population is likely to account for a mere 7 %. North America, which is currently experiencing a much higher fertility rate than Europe, is expected to retain its current relative share of the world’s population. For the period as a whole (1950-2050), the relative share of the populations of North America and Europe is expected to have dropped by 17 percentage points, with Europe being responsible for 15 points, giving them a total share of a meagre 12 %, which should be equivalent to around half the future population of Africa and only a fifth of that of Asia.
It is important to note that past decreases are not due to population decline in Europe and North America. Not yet, anyway. In absolute terms, the populations of Europe and North America have grown quite significantly throughout the 20th century. Together they had 720 million inhabitants in 1950. In 2000 they had just over 1 billion, an increase in size not far from the actual population of the European Union (EU 15 stood at 380 million in 2003). The main difference when comparing Europe with Asia, and now in the 21st century also Africa, is the rate at which populations have grown. Growth has been close to exponential in Asia and Africa, while in Europe and North America it has been more linear.
In contrast with the past half century, between 2000 and 2050 the relative decline of Europe’s share of the world population should be speeded up by an expected population decline in many European states due to extremely low fertility (current fertility levels are as low as 1.3 in many European countries). The estimated decline should represent close to 100 million people and should primarily affect Eastern Europe, although some southern European countries, such as Italy and Spain, are clearly at risk of experiencing similar developments. North America, on the other hand, is set to continue growing. It is estimated to reach a total population of 450 million by 2050, compared with only 315 million in 2000. Current trends tell us that North America’s population will soon outnumber that of the European Union. This is likely to happen even if we consider that the European Union will receive over 70 million additional inhabitants after its enlargement this year.
If we look at population trends in particular countries, the diminishing relative influence of Europe becomes even clearer (see Table 1). In 1950 no less than four European countries made it into the list of the world’s ten most populated countries. Among the top twenty there were eight European countries. In 2050 no European country is likely to be in the top ten, which should by then be dominated by countries in Asia, Africa and America. What is more, Russia is the only European country which should be among the twenty biggest in 2050, and the highest ranked European Union country is Germany in a modest 24th place. All European countries are heading for lower positions on the world country ranking. Spain, for instance, which was 17th in 1950, was ranked 28th in 2000. By 2050, Spain barely makes it into the top fifty and is expected to be ranked 47th.
| Table 1 | ||||
| The World’s Ten Most Populated Countries | ||||
| Rank | 1950 | 2050 | ||
| Country | Pop.(Millions) | Country | Pop.(Millions) | |
| 1 | China | 562,6 | India | 1,601,0 |
| 2 | India | 369,9 | China | 1,417,6 |
| 3 | USA | 152,3 | USA | 420,1 |
| 4 | Russia | 101,9 | Indonesia | 336,2 |
| 5 | Japan | 83,8 | Nigeria | 307,4 |
| 6 | Indonesia | 83,0 | Bangladesh | 279,9 |
| 7 | Germany | 68,4 | Pakistan | 267,8 |
| 8 | Brazil | 53,4 | Brazil | 228,4 |
| 9 | UK | 50,1 | Dem. Rep. of Congo | 181,2 |
| 10 | Italy | 47,1 | Mexico | 147,9 |
| Source: US Census Bureau, International Data Base. |
By now it should be clear that as we approach the middle of this century, Europe’s position as a demographical giant on the world scene will rapidly become a thing of the past.
No doubt, Europe’s dominant position in the world economy and in international politics has only been possible because of its relative demographic weight in the past. As this is now changing, we can expect Asian and African countries to increase their influence on a range of issues at Europe’s cost.
Most importantly, there is a certain correlation between economic power and demography. Reliable comparable economic estimates for all countries for the period 1950-2000 are hard to come by, but the IMF offers reliable information for the period 1980-1998. In 1980, the ten largest countries had a share of 51.9 % of the world’s total GDP, and there were three European countries among the top ten. In 1998, the share of the ten largest countries had increased slightly to 53.1 %, with only Germany and Russia making it onto the list. More impressive is that the ERS (Economic Research Service US) economic forecasts for 2012 put the ten countries’ share at 64 % (a forecast based on IMF data for nine of the 10 countries since no data for Nigeria is available), despite Germany no longer being included among the ten largest. That is, although there are fewer European countries in the top ten list, the largest ten are increasing their share of the world economy at a steady rate.
As regards EU-15 for the same period, its share of the world economy has decreased substantially: in 1980 it was 30.2 % and in 1998 24.9 %. If the forecasts are accurate, its share should drop even further to 21.5 % by 2012. Thus, as Europe’s share of the world’s population drops, its world economic influence is slowly eroding too. As in the case of population, virtually no European country will be able to retain its world economic rank. Spain, for example, which has been one of the Union’s top performers in terms of economic growth between 1980 and 1998, has slid down from a share of 1.89 % to 1.76 % over the period; its world rank in terms of GDP has dropped from the 9th to the 15th position between 1993 and 2003. We can expect a similar or even more rapid decline in the coming decade.
However, Europe’s declining share of the world economy has to be understood in relation with its lack of population growth. That is, despite negative population growth it still manages to hold on to a not altogether insignificant part of the world economy for the period covered here (1980-2012). The question we have to ask ourselves is whether the old continent can continue retaining this share as we approach 2050? The trend shown by the IMF’s data suggests that this could be difficult. The largest ten countries, aided by their demographic growth, have so far shown little sign of weakening their economic growth potential. Moreover, if we consider that in the period 2000-50 Europe’s share of those aged over 60 compared with its active population (its ‘old age dependency ratio’) is set to increase from 0.29 to 0.74, it would take a thorough restructuring of Europe’s economic life for it to hold on to the world influence its current position in the world economyimplies.
Conclusion
If population growth were a competition, Europe would be heading towards its certain demotion to a lower division. Fortunately this is not the case. Population growth has positive as well as negative aspects and there is little more to do than to adapt to reality and this is particularly important at times of great changes. Since the middle of the past century, the world is experiencing the largest demographical transformation in its history. These changes are likely to continue during most of this century and should make it necessary for Europe and other developing countries to seek the means to preserve a reasonable amount of world influence despite their diminishing share of the world population and, as a consequence, of the world’s economy.
The only long-term solution to Europe’s increasingly precarious demographic and economic position is to tap into the demographic wealth that surrounds it. In certain ways this means increased migration. However, immigration is not going to provide enough leverage to remedy the demographic problem. Creating population growth to match that of the countries now emerging as demographical giants by means of immigration is virtually impossible, lest we accept more migrants than there are native inhabitants in the next fifty years. Nor is this a desirable solution considering that Europe is already one of the world’s most densely populated areas. No, the only viable solution to Europe’s demographic situation is to find the means to tap into the demographic wealth surrounding it by transferring part of its future economic development directly to its demographically expanding neighbours.
The short-term solution to Europe’s population problem is of a domestic character. To offset the effects of stagnating population growth (and on occasions of population decline) and of an ageing population, of which we have just seen the beginning as we move into the 21st century, Europe has to make a much more effective use of its existing resources. The essence of this is simple: a smaller working population has to be empowered to do more. More importantly, those who have so far not taken part, or those who as a result of past economic wellbeing have not had to participate, will have to be brought back into the labour market. In the few cases in which it is possible to make comparisons, Europe’s productivity and efficiency levels are far from satisfactory, particularly when compared to countries such as the US.
It is likely that Europe has to consider an integrated approach to its short- and long-term solutions. We could call this approach ‘global diversification’, which means that in its quest to overcome its domestic demographic problems, Europe should seriously analyse other options in order to enhance its economic development. Efforts in this regard could, for example, include outsourcing highly labour-intensive parts of the production chain and concentrating on developing the less labour-intensive parts at home as a response to declining human resources. Since such a strategy would make Europe more dependent on poorer external partners, the option is not without risks. Conversely, a deeper cooperation between developing and developed countries might offset some of the economic differences that have traditionally been a source of significant political instability and that, given current demographic trends, could be aggravated in the future. Global diversification calls for a more open approach by the EU and its member states, with the aim of making allies in terms of both trade and international relations beyond its borders and of building peaceful relationships that endure and overcome potential crises that could result from current demographic developments. In a way, global diversification could entail a separation of the borders defining the Union’s territory and those defining the common market. The latter, to permit global diversification, could be allowed to includemany more countries than the EU’s current territorial borders.
Finally, Spain is by no means free of the problems besetting Europe. Of the five largest EU-15 countries, Spain, together with Italy and Germany, is one of the worst affected as regards its demographic situation. All three of these countries are large economies by European standards, so it is not only important for them to be able to design policies that address their future situation for their own sake, but it is also of vital importance for the Union as a whole. The future European Union can hardly afford to have three of its biggest players sitting out on the sidelines due to structural injuries when facing what are perhaps the toughest demographic challenges in its history.
Rickard Sandell
Senior Analyst, Demography Population and International Migration
The Elcano Royal Institute