2

Figure 1Human Population Throughout History, A.D. 1 to 2020

19855 billion

20208 billion

1800900 million

19001.6 billion

19502.4 billion

A.D. 1150 million

1350300 million

1700600 million

Source: John H. Tanton, End of the Migration Epoch, reprinted by the Social Contract, Vol. IV, No. 3 and Vol. V, No. 1, 1995.
 3

Contents

 Scope Note  Key Findings  Historical Precedence and Power  The Aging Challenge: Straining Institutions and Governments  Youth Bulge Bodes Instability  Migration Offers Partial Remedy  The Urban Century Arrives  Health and Environmental Aftershocks  Strategic Implications of Demographic Trends  Strategic Implications of Demographic Trends: For US Allies  Strategic Implications of Demographic Trends: For Potential US Rivals  Tapping Into Prominent Expertise  Tapping Into Prominent Expertise: Three Globa Scenarios 

Scope NoteThis paper identifi es the factors that will be most important in shaping the worldwide demographic landscape in 2020 and beyond. It examines how societies are coping with the broad range of demographic challenges and assesses what conditions may be key to transforming demographic trends into security issues of interest to the United States. Global demographic trends will have far-reaching consequences for the key elements of national power: economic, military, and political within the larger global community. Allies and rivals alike will cope differently—some better than others. Reforms require advance notice and gradual implementation that, given the immediacy of many of the world’s demographic challenges, leave no room for complacency. This assessment draws on the results of a two-day strategic planning conference in October 2000. Experts from academia, the business world, and the Intelligence Community identifi ed the trends they believed would be most important in shaping the global demographic landscape over the next decade. (See the section Tapping Into Prominent Expertise on page 90 for more details.)The format of this paper follows the format of the annotated briefi ng developed by RAND and other institutions. The top pages are briefi ng slides that outline and summarize the various elements of the paper. The bottom pages provide the analytic details and supporting evidence. 
4
 5

Telescoping the Population of the 

To truly appreciate what the projected population o

than 7.8 billion people would look like by 2020, wtheir mix into 100 people: • Fifty-six of them would be from Asia, including  Indians.• Thirteen would be from our hemisphere, includ United States.

• Sixteen would be from Africa, including 13 fr

Africa.

• Three would be from the Middle East.• Seven would be from Eastern Europe and the fo• Five would be from Western Europe.

Key FindingsDemographic trends that are already largely determined will contribute to a substantial reshaping of the global landscape between now and 2050. US allies and rivals alike will comprise a much smaller share of the world’s population. Demographic change will create incentives for a new network of alliances and foreign policy priorities for many of the world’s most infl uential governments.

The population of the region that served as the locus for most 20th-century history—Europe and Russia—will shrink dramatically 

in relative terms; almost all population growth will occur in developing nations that until now have occupied places on the fringes of the global economy:• In 1950, Europe and Russia comprised 22 percent of the global 

population; the share is now 13 percent, and by 2050 it will be 7.5 percent.

• In 1950, six of the 10 most populous nations were in the developed 

world; by 2020, only the United States and Russia will remain on the top 10 list.

• Of the 1.5 billion people that the world population will gain by 

2020, most will be added to states in Asia and Africa.

The world will be older and far less Caucasian, and it will be far more concentrated in urban areas; these population shifts will demand concessions of political infl uence at the expense of the young and middle aged and at the expense of traditional rural constituencies, as well as from traditional US allies and toward states currently outside our orbit of infl uence: • By 2015, for the fi rst time in human history, a majority of the 

world’s population will live in cities.

• By 2050, the global 65+ age cohort will triple in 

1.5 billion, or 16 percent of the total.

• Despite the general trend toward aging, many d

will experience substantial youth bulges: the laryouth populations will be located in Pakistan, AArabia, Yemen, and Iraq.
6

• Our allies in the industrialized world will face an unprecedented crisis of aging. • The aging challenge could reduce Japan’s economic power.

• An older Europe will be less willing to face up to global hotspots. 
 7

The Aging Industrialized World The industrialized world will record an unprecedented crisis of aging beginning early next decade and reaching critical mass in the mid-2020s:• Italy will have nearly 19 percent elderly (as a reference point, about the 

same share of elderly as Florida has today) as early as 2003, followed by Japan in 2005, Germany in 2006, and Spain around 2012. France and Britain will pass that mark around 2016, and Canada and the United States in 2021 and 2023 respectively.

• The ratio of taxpaying workers to nonworking pensioners in the developed world will fall. Today, that ratio is about 4:1 in most industrialized 

nations. In 50 years this ratio will drop to less than 2:1 or even lower in some countries in Europe and Japan unless there are revisions to retirement laws or dramatically increased immigration.

Without rapid growth in productivity, greater participation rates in the labor force, or other aggressive corrective actions, labor force contraction in many of the world’s leading economies could depress economic output and boost infl ation: 

• The OECD projects that, all things equal, the impact of aging on GDP 

growth rates will be a decrease in Europe to 0.5 percent, in Japan to 0.6 percent, and in the United States to 1.5 percent in the years 2025-50.

• The OECD also projects that the average bill for public pensions and 

health care in Japan and Europe will grow by 9 to 16 percent of GDP over the next three decades.

For Japan, the aging challenge, combined with its burden, could reduce its role as a major economic • Over the next two decades the absolute number 

household-forming age groups in Japan are exp40 percent. Because these groups are at a time opropels demand for everything from washing mcarriages, their decline could lead to overcapacion investment in such key sectors of the economestate, and durable goods.

• One consequence of a contracting or slower gro

Japan will be slower improvements in living staeffects of the demographic factors, OECD estimcumulative effect of aging by 2050 could be a rstandards—measured by GNP per capita adjusteffects—by 23 percent. 

For US allies in Europe the aging challenge could ness to help the United States manage global hotsp• If Europeans are unable to successfully substitu

in their force structures, their defense establishm

The United States’ higher fertility rate and its abililate newcomers in ways that others culturally rejecdemographic trends will only enhance the United its position as superpower on the world stage. With power status will come continued pressure for leadchallenges.
8

• Key potential US rivals—China and Russia—face demographic challenges:

– For China, a large and growing urban population coupled with a looming aging population 

economic growth, increased political instability, and perhaps signifi cant cultural changes.

– For Russia, an unhealthy declining population—especially among working-age males—co

economic growth and domestic stability, vulnerabilities that internal political groups or othseek to exploit. 
 9

Challenges Bedeviling Potential US RivalsChina’s productivity and global standing are deeply uncertain, in part because of the large resources required to deal with its demographic problems: • In the near term, China is struggling fi scally to keep up the social 

infrastructure necessary to support its large, growing, increasingly urban population. It also is constrained by the enormous costs required to restructure its state enterprises and failing banking sectors. According to the IMF, China’s overall fi scal defi cit in 2000 was estimated to be about 4 percent of GDP, up from 1.6 percent in 1996.

• In only 30 years, China will have to expend tremendous resources to 

deal with its own aging crisis and most likely will not have the same coping mechanisms—sophisticated tax structures, deep capital markets, and developed pension and health-care systems—that developed 

countries have for dealing with an aging population.

• By 2025, China will have more than 200 million people aged 65 and 

over and by 2050 more than 300 million—more than the current size 

of the US population.

As a result of these demographic challenges, China could confront slower growth, increased political instability, and perhaps even pressure for signifi -cant cultural changes. 

Declining fertility and rising mortality—especially 

males—have reduced the size of Russia’s populati

reduce it further:• According to US Census and Russian census pr

expected to further contract in the next fi ve decbetween 118 and 121 million people, the level i

• Russia’s Far East region is suffering the most si

tion, and its recovery will require imported laboAsian countries, notably China. Illegal migratiocreating social tensions that are easily exploited a greatly expanded foreign presence in the Far Eof social, political, and foreign policy tensions. 

• Russia’s multiple demographic challenges paint 

that will be working far below the capacity that size would suggest. 

The Russian Government’s failure to manage its d

could complicate its ability to manage other issues relations, domestic stability, and economic growthThe country’s leadership, especially the military, ias exhibiting vulnerabilities that other states—both distant—will seek to exploit.

A prolonged, severe social and economic crisis coof political groups hostile to Western interests, sucPutin’s coterie of advisers from the former KGB.
• As other industrialized countries deal with aging crises, the United States will be expected to assume a larger share of th

fi nancial and humanitarian assistance, peacekeeping, and military interventions around the world. 

• The burden may increase as demographic factors heighten existing tensions and exacerbate other factors that precipitate 

• These pressures will build in regions of the world, like Sub-Saharan Africa, that have traditionally not been at the center 

Table 1 What Demographic Trends Mean for US Interests

US Preeminence Financial/Humanitarian 

Assistance

Peacekeeping/Military 

Intervention

Global Economic Prosperity Dipl

Preeminence bolstered by US' favorable position 

compared to other 

industrialized countries

Greater burden placed on US because allies have fewer 

resources

Some intergenerational tension; 

smaller armies among allies increase burden on US to 

manage global hotspots

Presents greatest challenge to US and global economic 

prosperity; capital markets, 

investment, and trade most 

affected

Frict

coun

glob

for a

Youth bulge Some youth bulge countries 

may adopt different positions 

than their elders on policies 

regarding the United States 

US will rely more heavily on 

foreign militaries to support 

humanitarian or peacekeeping 

operations 

Intervention possibly required 

in countries whose youth 

populations are exhibiting open 

aggression or conflict

It will be harder for US and 

global economy to prosper 

without improvements in 

education and economic 

reform in countries with large 

youth populations 

Yout

new 

activ

exam

gove

with 

Migration US will have more immigrants 

that can influence US foreign 

and domestic policies

Foreign diasporas will lobby the US to become more involved in 

their home countries' problems, 

particularly if youth bulges lead to upheaval in their home 

countries

Intervention possibly required 

as divergent fertility rates 

between ethnic groups with 

mixed settlement patterns 

exacerbate instability

Will alleviate labor shortages to 

some extent

Fore

rese

work

imm

Urbanization Preeminence not threatened 

by urbanization trends as 

US troops prepare adequately 

by training in urban areas; 

possibly bolstered by poor 

urban management in foreign 

urban environments

High probability of demands or 

US involvement by overburdened megacities and the 

nations in which internal stability is threatened

Intervention possibly required 

in cities that have reached 

crisis in the form of open 

aggression or conflict between

inhabitants; Lagos and Karachi 

particularly vulnerable

Little effect from individualurban centers on global 

economic prospects; in affected 

areas fewer economic 

opportunities could lead to 

dissent; successful urban 

centers could also act as 

strong competitors for US 

urban centers

Appeto ur

anta

spillo

inter

Health People attracted to the United 

States as the sole superpower, 

keeping the US at risk from 

infectious diseases 

Unhealthy populations, 

particularly in Sub-Saharan 

Africa, may require immediate 

US assistance as disease drives poorer people deeper 

into poverty

Intervention possibly required if 

people take to the streets 

perceiving their governments 

are ignoring the health crisis; 

militaries around the world may 

be unwilling or unable to help quell violence

US and global prosperity 

maintained; health issues will 

affect Russia and Sub-Saharan 

Africa's economies particularly hard

Poss

immrelat

intel

prote

Environment As the sole superpower US has 

greater burden for resolving 

environmental issues

Greater burden placed on the US to provide assistance for natural and manmade 

disasters because allies 

have fewer resources

Intervention possibly requiredas conflict over scarce resources exacerbates regional 

tensions particularly in South 

Asia, the Middle East, and Africa

US and global prosperity 

maintained; economic growth 

will be hampered by 

environmental pressures in 

affected areas

Frict

deve

shou

dam

have 

Aging
 11

Humanitarian Crises, Peacekeeping, and Military InterventionAs other industrialized countries turn inward to deal with their aging crises, the United States will be asked to assume the largest share of the burden on key international issues like arms control, diplomacy, and military and humanitarian interventions—issues that will be further complicated by 

demographic trends. While demographic factors are seldom the cause of confl ict, they can 

heighten existing tensions or exacerbate other factors that precipitate confl ict. There are at least four types of large-scale demographic shifts that will contribute to social stress suffi ciently serious to warrant US intervention:

• Age cohort differences, such as the widening youth bulge in the 

developing world, could lead to political, economic, and social upheaval as well as external migration because of limited social mobility. Youth bulges combined with low job-creation rates or government indifference provide fodder for confl ict and radical 

movements. 

• In some areas population growth will exacerbate environmental degradation, competition for scarce resources, vulnerability to disease, support 

for extremist political and religious movements, and sometimes violent confl ict, as in Sub-Saharan Africa and Haiti. Chronic high fertility rates in developing nations with narrowly based elites and weak institutions are particularly vulnerable. Lagos, Nigeria, is a prime example but Africa, the Middle East, and Asia have many other countries with these problems.

• Movements from rural to urban areas, or legally or illegally across 

national boundaries, will evoke tensions, discrimination, and violence; strain health-care delivery systems; and contribute to disease outbreaks, particularly in receiving areas.

• The risk is high that some of our key allies in the developing world will 

be destabilized by migratory population fl ows. 

Divergent fertility rates between ethnic groups witpatterns and historical enmity within countries and countries will exacerbate instability and confl ict, wchange the balances of power in some regions: • Countries like Armenia and Azerbaijan, and Ma

ripe for border tensions as a result of their wideparities particularly because they have land borand comparable technological levels.

The increasing frequency and scale of humanitarialarge numbers of refugees and displaced people. AStates may be called on to support new fi nancial bhumanitarian operations. Such pressures may chalto focus more on regions of the world, such as Subtraditionally have not been at the center of US poli• High fertility rates in countries, most recently s

(Sierra Leone and Liberia —with fertility rates per woman, respectively), can contribute to humfamines, epidemics, or mass criminal violence tmilitary intervention. 

• The growing burden of refugees, asylum seeker

on developing countries will spur increased reqfor political, economic, and technical support. 

• Urban density breeds plagues new and old. If d

contained, widespread disability, death, and vio
12

• The rise and fall of civilizations are linked to demographic trends:

– Great Britain’s population/employment crisis in the 18th and 19th centuries contributed to 

innovation, which eventually led to technological breakthroughs and the Industrial Revolut

• Population growth has contributed to revolutions and expansionism:

– Population growth in 18th-century France played a key role in the French Revolution.– Japanese imperialism from the 1870s to 1945 was fueled, in part, by its rise in population.
 13

Historical Precedence and PowerEver since Thucydides, historians have observed that the rise and fall of civilizations are closely linked to demographic trends. Contracting populations have often given way militarily, economically, and culturally to expanding ones. Other demographic shifts have carried different but critical geopolitical consequences. Population growth, particularly in a constrained landscape, has been a catalyst for many things including revolution and expansionist programs: • Great Britain’s large population growth rates in the 17th century resulted 

in a widespread conviction in the 18th and 19th centuries that it faced a population/unemployment crisis. The government resolved part of the crisis by encouraging both outmigration on a grand scale and innovation, which eventually led to technological breakthroughs and the Industrial Revolution. Both China’s and India’s Green Revolutions were driven 

mainly by population pressures.

• Population growth in 18th-century France played a role in the French 

Revolution, according to a prominent historian. France’s population 

grew from 24.6 million in 1740 to 28.1 million in 1790. More important, the ratio of youth (under 18) to adults increased from 0.6 to 0.8. This helped increase the demand for food at a time of stagnant supply levels, thereby driving up food prices throughout France. Infl ation accelerated further as a result of increased urbanization because the velocity of money was higher in the cities than in rural areas. Consequently, the average French wage earner’s purchasing power was reduced, which had the ripple effect of creating a business downturn for the growing and increasingly powerful French artisan and merchant classes. 

• This situation led to the precursor conditions fo

became even more widespread when the outmomaintained by the monarchy, failed to provide eport public spending, thus putting France on the ruptcy, which was offi cially declared in 1787. 

• China’s population pressures in the 18th century 

expansion. Chinese moved to the northwest, incManchuria, and inner Mongolia, and to the soutsettlers moved into Hunan Province and into Bu

Growing populations have created the reality or pestandards of living. Young people, believing they wway their forebears did, looked for solutions, and padvantage of this mind-set: • Japanese imperialism from the 1870s to 1945, f

in part, by Japan’s rise in population. The Japanmid-19th century went through a period of relatgrowth after emerging from a period of 150 yeaconsciously reduced their fertility rates to slow on fears about declining living standards and thJapanese rulers were able to garner support for that included settling the northern island of the to Okinawa, Taiwan, and Korea.
• Dramatic population declines have created power vacuums that new ethnic groups exploit. 

• Differential population growth rates between neighbors have historically altered conventional 

 of power.

14
areas such as engineering) were the primary gua

and leverage in the international arena and thus demographic variables contributing to overall naDynamic. Adopted in the 1980s and 1990s, this 

digm emphasizes that demographic factors such degradation, mass migration, resource depletionfl ows, ethnic con

fl ict, hypernationalism, and urb

minants of power and serve as catalysts and shapinstability and armed con

fl ict. 

Long-Term Global Demographic Trends focuses 

view because increasing globalization of Westersecurity interests is making the spillover effects pressures, even in regions remote from Europe, or Northeast Asia, hard to ignore. However, the elements of the classical static and human capita

aAdapted from The Security Dynamics of Demographic 

Nichiporuk, RAND.

Different Notions of Demographics and Powera

It is not clear that larger armies enjoy as much of an advantage on the modern battle

fi eld as they once did. The results of Desert 

Storm and the ongoing discussions about a contemporary revolution in military affairs that features improved sensors and informationprocessing capabilities are causing many to reassess the old paradigm of war and to search for new metrics of combat effectiveness. In the Industrial Age large conscript armies with plenty of resources battling each other over long continuous fronts was the predominant paradigm. This notion has been changing steadily over time.Classical Static. Between the late 1940s and the early 1970s a country’s population size and density were considered the two independent variables in an aggregate “bucket of capabilities” that determined a country’s level of power and in

fl uence in the international 

system.Human Capital. The academic economist community challenged the static view in the 1960s, arguing that the traditional politicomilitary notions of security were being rendered obsolete by the growing preeminence of economic and technological innovation capabilities in the new global power equation. This view, which became more popular in the 1970s and 1980s as people witnessed the rise of the East Asian “miracle economies,” held that the quality 

and skill level of a labor force (especially in technology intensive

Sharp population declines have historically created vacuums into which new ethnic groups have stepped: • The most extreme example of this occurred during the Amerindian 

catastrophe in the 16th century. Disease widowed the population, which allowed Europeans to increase their strength vis-a-vis the native population. 

Neighbors or rivals experiencing different rates of population growth have also shaken things up a bit: 

• The relative situations of France and German

early 20th centuries are good examples of thiFrance grew modestly, while Germany grew France, anxious about its low fertility after its experience of succeeding under Napoleon wia defensive power, and Germany’s relative po

increased exponentially. 

15
16

• Such demographic imbalances could trigger future tensions particularly in countries that have 

relatively even conventional capabilities.

• Areas for future tensions include the borders between Armenia and Azerbaijan, and Malaysia a

Singapore, which harbor historical enmity and are projected to have widening demographic dis
 17

• Third, the state with the faster growing or larg

have the ability to convert its demographic strconventional power. Many countries in the departicularly Sub-Saharan Africa, that have higrates do not have the fi nancial means to provi

the additional people let alone invest in a viabbuildup.

• Fourth, the local territorial profi le has to be co

operations. Aggressor states traditionally seek they invade their neighbors, and, if the local tfavors the defender (mountains or jungles), thdrastic demographic shifts will not change the destroy deterrence.

Two regions where different population growth rchange local balances of power, where all four cwhere historical mistrust exists are Armenia/AzeSingapore. Malaysia and Azerbaijan are nations 

higher fertility rates than their neighbors and the potential to build improved conventional military term—Malaysia because of its growing industriatechnology and Azerbaijan because of its potenti

aAdapted from The Security Dynamics of Demographic F

Nichiporuk, RAND.

Differential Growth Rates, Regional Balances of Powera

Under certain circumstances, differences between neighboring states in population growth rate or size can change the existing conventional balance of power, increasing the risk of regional instability and war.There are two mechanisms by which this could occur. First, the state with the faster growing population or greater size fi elds more conventional military capability and attacks its neighbor in the belief that it will be relatively easy to win a quick and decisive military victory. Second, the lower growth or smaller state seeks to launch a preemptive attack on its neighbor to take advantage of a still favorable regional military balance. That said, for differential population growth rates or population size to overturn an existing regional balance of power, four conditions need to hold:

• First, competing nations need to be adjoined primarily by land (as 

opposed to maritime) borders. Two contemporary cases where this condition does not hold best illustrates this point—China-Taiwan in 

the Taiwan Strait and Greece-Turkey in the Aegean Sea. Both smaller countries maintain solid deterrent postures despite their smaller population sizes and growth rates, in part because both situations exist in primarily air/naval theater operations where air forces and navies rely more on technologically oriented systems than quantities of people to achieve their combat objectives.

• Second, nuclear weapons cannot be present in the region. Demographic shifts are not likely to lead to sudden changes in the balance 

of power in South Asia, for example, because survivable nuclear arsenals are present in both India and Pakistan.
18

• The Russian population dynamic is especially noteworthy: Russia has an unhealthy population

unhealthy, it grows up unhealthy, and it dies prematurely.

• Declining fertility and rising mortality—especially among working-age males—have reduced • The country’s population will further contract in the next fi ve decades to the level of 1960.

Figure 4Russians Are Concerned About Their Demographic Situation

Doctors’ best efforts can’t curb Russia’s population decline
 19

Spotlight on Russia: As Bad As It Gets Russia presents a special case, both in terms of the multiple negative demographic trends it manifests and in terms of the potential geopolitical signifi cance of those trends. Russia’s geographic position, occupying a 

vast 11-time-zone swath in the heart of the Eurasian landmass, gives demographic developments there the potential to affect a large number (14) of contiguous states in both Europe and Asia and to alter political balances in Central Asia, the Caucasus, the Baltic states, and potentially Central Europe. Taken together, these demographic factors paint a picture of a population that will be working far below the capacity that a literate society of this size would suggest: • Declining fertility rates and increasing mortality rates, especially 

among working-age males, have steadily reduced the size of Russia’s 

population from 148.7 million people in 1992 to just 144.9 million in November 2000. According to US Census projections, Russia is expected to further contract in the next fi ve decades to 118 million people, the level it achieved in 1960. 

• Russia’s total fertility rate (TFR—the average number of children a 

woman would have over her lifetime) has fallen to 1.17 (1999), or just over half the rate required for simple population replacement. In the core Russian areas of the country, TFRs are well below the national average, standing at just above 1.0, with some major urban areas even reporting TFRs below 1.0. 

• The decline in Russian health care, the wide range of pollutants, the 

decline in the quality of diet, extensive damage to the environment, widespread destructive personal behaviors, and a rise in infectious diseases (notably tuberculosis [TB] and HIV/AIDS) have combined to reduce the overall health of the population and to increase premature deaths. 

The Russian population is an unhealthy populationit grows up unhealthy, and it dies prematurely. The 2000 were marked by a further decline in public hand a reversal of 1998 gains in life expectancy for dropping below 60 years for men and below 72 ye• Beginning in 2007 the surplus of young people 

and, when added to the expected mortality numworking-age population to contract by more thaalone. This will put a premium on labor producRussia’s human capital pool, previously abunda

by shrinking educational funds, crumbling infraconditions, and a brain drain of people with the 

• Most regions in the Far North and Far East will 

sizable population reductions—30 percent by 2

the collapse of the Soviet centrally directed ecosystem. As these regions slipped into economic of internal migration was unleashed with many especially working-age populations, leaving for Rising worker to nonworker ratios raise the socpremiums for retirees are the responsibility of lments—which will create potentially severe fi n

with disproportionately large elderly population

• The Russian Far East’s recovery will require im

neighboring Asian countries, notably China. Sucreating social tensions that are easily exploited greatly expanded foreign presence in the Far Eapolitical, and foreign policy tensions. 
20

• The world is getting older at a rate unprecedented in history.• By 2050, nearly 1.5 billion people or 16.3 percent of the world’s population will be aged 65 or 

to about 420 million or 6.9 percent in 2000.

• Even the youngest regions—Latin America, Asia, and Africa—will have substantial elderly po

• Europe and Japan will face the most immediate impact of aging.
 21

The Aging ChallengeThere will be unprecedented growth in the number and percentage of older age groups across the globe in the fi rst half of the 21st century: 

• By 2050, nearly 1.5 billion or 16.3 percent of the world’s population will 

be aged 65 or older compared to about 420 million or 6.9 percent in 2000, according to the US Census. 

• Even the “youngest” regions—Latin America, Asia, and Africa—will 

have substantial elderly populations. Africa, for example, will have reached the same percentage of elderly as Europe had in the mid-20th century. By 2050, China’s elderly will account for 23 percent of its 

population, Taiwan’s 27.5 percent, and South Korea’s 27 percent. 

The number of people 80 and older will grow considerably: • In 2000 there were a little more than 70 million people in this group in 

the world (1.1 percent of world population), and by 2025 that number is expected to more than double to nearly 163 million. 

• In the United States alone there will be a 2-percentage-point increase in 

this 80+ population relative to the 65+ population. It is these oldest old people who consume the most medical services and social benefi ts.

The median age for the world in the last half century has hovered around 24; it is over 25 now, but by 2050 it will be just under 44. In most developed nations, the median age for the population will be over 51, with Germany and Japan averaging 53 to 55. The industrialized world will face the most immediate impact of aging, with Europe and Japan experiencing larger disruptions than the United States: • Italy will have nearly 19 percent elderly (about the same share of elderly 

as Florida has today) as early as 2003, followed by Japan in 2005, Germany in 2006, and Spain around 2012. France and Britain will pass that mark around 2016 and Canada and the United States in 2021 and 2023 respectively.

Fertility and Longevity Key Forces Behin

Global aging is the result of two fundamental demographand rising longevity. The fi rst reduces the relative numbesecond increases the relative number of the old. Worldwide, the total fertility rate (the expected number ohave during her childbearing years) has fallen from 5.0 tThe fastest aging societies are those with the greatest de

• Japan has seen one of the sharpest fertility declines fr

of more than 4.0 children per woman between 1947 a1.4 children per woman in 1995, the last year it was o

Japanese Government. As a result, Japan will have th80+ population in the world. 

• Forty-fi ve percent of the world’s population inhabits 

below population replacement level (2.1 TFR). Althoin the coming decades, few believe that fertility in mrecover suffi ciently to reach replacement levels in the making population decline inevitable. 

• By 2050, Japan could lose as much as one-third of its 

could lose about 21 percent of its current population East Germany), losses historically correlated with deor plagues. 

• In 1950, six of the 10 most populous nations were in 

the United States, Russia, Japan, Germany, United KCensus projects that, by 2050, only the United States 

Since World War II, global life expectancy has risen from for a greater gain over the past 50 years than over the pr

• In the United States, life expectancy has risen from 4

in 1950 to 77 years in 2000. 

• In Japan, the world’s longevity leader, life expectancy 

80 years. 

• Europe generally has longer life expectancy than the 

as high as Japan. Average life expectancy at birth in Iit is 78.8 years, and in Germany it is 77.4 years. 

• With advances in the biotechnology of human aging—

lifestyles—some even conclude that a life expectancy 

attainable within a few decades.
22

• Aging combined with large drops in fertility means fewer workers to support retirees.• Work force issues will be especially problematic for Europeans, who harbor cultural biases aga

later in life. 

Source: US Bureau of the Census, International Data Base.

Figure 8 Changes in Population Over Time

Million

1060

110160210260310360410

2000 2025 

Over the next 50 years the developed countries are pbecome smaller and the United States is projected to nearly half. As a result, the population of Western Euin 2000 was larger than that of the United States by amillion, in 2050 will become smaller by 40 million. Japopulation will steadily drop from less than half of the population to one-fourth its size by 2050. 

Source: US Bureau of the Census, International Data Base.

Figure 7 Changes in Working-Age Populations

0

50

100150200250300

United Canada

States

United Japan

Kingdom

Western France Germany Italy

Europe

2000 2050

Millions

Table 2 Total Fertility Rates for Selected Developed Countries

United StatesUnited KingdomFranceCanadaJapanGermanyItaly

3.452.182.733.732.752.162.32

3.302.802.903.602.002.502.60

2.022.042.311.982.071.642.28

2.051.781.721.731.491.301.28

2.061.731.801.601.501.301.20

1951-55 1961-65 1971-75 1991-95 1996-2000

Source: UN Population Division, demographic indicators 1950-2020 (the 1998 revision)

Working-age population (15-64) 65+ population
 23

As populations age and fertility rates continue to decline, our major allies—even those who are currently plagued with unemployment—can 

expect considerably tighter labor markets:• The working-age population (15-64) in Japan is expected to decline by 

37 percent by 2050, according to US Census projections.

• In Italy, the working-age population will decline by an alarming 

39 percent by 2050.

• Germany’s working-age population will fall by more than 18 percent 

during that same period.

• France and the United Kingdom fare better, with projected working-age 

population declines of 11 percent and 12 percent respectively.

The working populations of the United States and Canada are expected to grow, albeit less robustly than in the past, for the foreseeable future: • The US working-age population is expected to rise by 33 percent over 

the next 50 years, a fairly sluggish pace compared to trends in the past half century.

• Canada is expected to gain in working-age population by about 

17 percent, aided by net migration rates that are double those of the United States and a projected rise in its total fertility rate from 1.6 to 1.9.

In any case, the ratio of taxpaying workers to nonworking pensioners in the developed world is due to fall. Today, that ratio is about 4:1 in most industrialized nations. In 50 years this ratio will drop to less than 2:1 or even lower in some countries in Europe and Japan. It will fall to 3:1 in the United States. This is critical because most social security systems in the developed world operate on a pay-as-you-go (PAYGO) basis, with current workers supporting current retirees through payroll taxes.

What If the Elderly Continue To B

How countries deal with their aging trends will be heaviand productive the elderly population will be in the work biotechnology and health care continue to develop and thright incentives to continue to be active, then this group old who are less than 80 years old and are generally healnew set of consumers (or savers) with a longer productivadditional economic growth and continued prosperity. Tcould come in two ways: 

• First, as a group, these post-child-support (65+), pre-

ers should have more disposable income. This incomon luxuries (goods and services) or invested in savingsubsequent generations. 

• Second, by remaining in the work force longer, this g

basic productivity of the overall work force. This wilto society from such one-time fi xed investments as ed

ing will continue to be realized. Further, the continuethe work force—even if individual worker productiv

still provide an overall increase in the “experience” bSocieties may further leverage savings or consumptiowith combinations of tax incentives and changes to rthe most basic strategy will require incentives to keep 

In the end this may be more a factor of culture than of th

individual workers: 

• The United States is culturally predisposed to this no

to benefi t the most from an active elderly population. States is the only country to have age discrimination ment recently changed policies to allow people over benefi ts while they continue working. Moreover, labopart-time job options—are more available in the Unit

and such options may hold greater appeal to the 65+ 

• In Germany and Italy only 4 percent of males aged 6

the labor force. This is compared to nearly 17 percen65 who are working.
24

• Labor force contraction could depress economic output, boost infl ation, and curb investmen• This could lead to overcapacity and falling returns on investment in key sectors of some ind

economies.

Demographic Trends Not Quite Certainties 

In most futures work the fi rst set of certainties that scenario builders usually jot down with little thought are demographic tpaper demonstrates, we should be less confi dent about assuming demographic trends are certain or should, at the very least

our assumptions about them. The confi dence that we place in demographic projections can be called into question by any n

making policymaking on such issues particularly challenging. 

• For example, the US Census Bureau recently changed its projections for South Africa from a country, two years ago, the

would be gaining 6 million people by 2025 to a country that will be losing nearly 9 million people by 2025 because of timpact of the AIDS virus. 

• The Japanese Government recently cut pension benefi ts by 20 percent and subsequently found out that their dependency 

off by 16 percent, causing a negligible reduction. 

More broadly, projections that countries make about the budgetary impacts of the global aging trend are linked to long-term of old-age dependency ratios. However, such projections depend on demographic assumptions about future birth rates, life and migration fl ows—all assumptions that can produce different results over the long term. To illustrate, the OECD collateprojections for the year 2040 in the mid-1980s, the World Bank conducted a similar exercise in the early 1990s, the UN prothe late 1990s, and the OECD countries, in collaboration with Eurostat, produced the same data again in the late 1990s. All indicate a rise in the elderly population, but the extent of the change differs substantially across the four sets of projectionscountries the old-age dependency ratios are higher the more recent the projection, in some cases by a considerable amount
 25

Without tremendous growth in productivity or other aggressive corrective actions, labor force contraction in many of the world’s leading economies 

could depress economic output and boost infl ation: • The OECD projects that, all things equal, the impact of aging on GDP 

growth rates will be a decrease in Europe to 0.5 percent, in Japan to 0.6 percent, and in the United States to 1.5 percent in the years 2025-50.1

• With less manpower to produce domestic goods and services, supplies 

fall short of demand—increasing some domestic prices and wages. Commodity shortfalls are likely to be met, at least in part, by increased imports, possibly leading to trade defi cits in some countries. 

• One consequence of a contracting or slower growing labor force will 

be slower improvements in living standards. OECD estimates suggest that the cumulative effect by 2050 could be a reduction in Japan’s living 

standards—measured by GNP per capita adjusted for terms of trade 

effects—by 23 percent, the EU’s by 18 percent, and the United States’ by 

10 percent below the level they might have reached extrapolating current productivity trends with unchanged dependency ratios. 

As births decline in the coming decades, so too could the number of consumers and producers. Because this age group is in its householdforming years, a time of life when home-buying propels demand for everything from washing machines to baby carriages, its decline could lead to overcapacity and falling returns on investment in such key sectors of the economy as construction, real estate, and durable goods. By 2010, the EU as a whole will experience a 13-percent decline in populations aged 20 to 39, according to UN projections. (Italy could have 30 percent fewer people in this age group by 2020). 

1All OECD data in the aging section are based on this assumed projection of GDP 

growth rates.

Over the next decade, the absolute number of peopin Japan is projected to shrink 20 percent (in the suexpected to shrink an additional 20 percent). This 60 percent of Japan’s GDP currently is generated bDeclining numbers of workers and consumers inevcontractionary effect on countries’ GDP growth ra

rates, and currencies. If this happens, tax revenues making it harder to fund retirement benefi ts withou

large budget defi cits. Producers would see declininBanks, pension funds, and other institutions that hsecurities could likewise experience deteriorating Surging retiree populations in the industrial world large numbers of affl uent households will be spend

savings in unison. Retirement alone could depress 8 percent of the combined GDP of 22 of the 29 OElate 2020s.Some current developments in Japan and Europe, directly related to aging, give us a window into whproblems could look like:• Consumer spending has fallen in Japan for 29 s

and construction sectors are on defi cit-fi nanced 

of debt owed by failed businesses in Japan reac$85 billion in the last half of 2000, piling new las fast they could write off old ones. Moreover, threaten banks’ balance sheets.

• Capital is fl eeing the EU at an unprecedented ra

among European investors about Europe’s outlo

reforms. Despite today’s favorable exchange raovervaluation of US equities, German companiin US acquisitions in August 2000 alone.
26

• At the same time, the costs of public pensions will increase much faster than economic growth in the develope• Health-care costs are also certain to rise unless technology vastly changes the cost of medical care or countries 

recognition to preventative care and ration medical interventions.

Table 3Graying Means Paying More for Pensions and Health Care

1995 2030

(Official projection)

United StatesUnited KingdomFranceCanadaJapanGermanyItalyOECD (1996, 1997) and US Census (1997)

10.510.517.612.611.517.319.7

15.517.025.822.523.128.833.3

Public Spending on pensions and health-care benefits (percentage of GDP) 

Change from 1995 in the G-7 budget balance projected pension deficitsa(percent)

Table 4Public Pension Deficits Could Consume Developed World Savings

2000200520102015202020252030

OECD (1995)aAssumes no change in taxes or other spending and assumes a

savings continues at the 1985-94 annual rate. 

20352040

0.1

-0.2-0.9-1.9-3.3-5.1-7.4-9.9

-12.1

A deficonsu

Table 5Japan Is the Only Developed Country Where Most Elders Still Live With Their Children 

Japan

1953

80%

1985

65%

France

1975

24%

1990

17%

United States

1952

33%

1987

15%

United Kingdom

1962

33%

1980

16%

Percentage of elderly living with their children
 27

At the same time, the developed world can expect a substantial rise in the share of national income consumed by the dependent older population. The fi scal and societal implications of these demographic trends are compounded by PAYGO (unfunded) public pension systems and the growing costs of health care: • The OECD projects that the average bill for public pensions in the 

developed world will grow by over 4 percent of GDP over the next three decades. In Japan and in Europe it will grow by over 6 percent of GDP. 

• When health-care expenditures are added in, the total bill for public 

retirement benefi ts is expected to rise by 9 to 16 percent of GDP by 

2030 in most developed countries. 

• Unfunded liabilities for pensions are already almost $35 trillion worldwide. With health care the total jumps to at least twice that much. 

Accelerating advances in medical technology, together with rising social expectation about care and cure, guarantee that health-care spending for all age groups will continue to grow faster than the economy in most developed countries: • In OECD countries health-care expenditures have been increasing at the 

rate of 5.7 percent per year between 1960 and 1995 in real terms. GDP, meanwhile, grew at 3.4 percent per year, with the result that health care now accounts for nearly 10 percent of GDP, compared to 4.3 percent in 1960.

This pattern will continue unless there is more pressure to contain costs (for example, through rationing medical interventions) and more recognition is given to preventative care, or there are unanticipated changes of policy or technology. If GDP growth is slower and if improvements in productivity fail to compensate for slower labor force growth, then the health share could be even higher. This cost trend is especially critical because the elderly consume three to fi ve times more health-care services per capita than 

younger people. Moreover, the older the elderly are, the more health care they consume, and it is the population of the oldest old that will be growing the fastest.

Global Aging and the Fam

Governments everywhere are counting on familinot most of the burden of long-term care for the the rapidly growing oldest segment of the populgrow heavier. Currently, 69 percent of older perscountries, such as China, live in households with Today’s elders typically have two or more childrthat at least one will be able and willing to help today’s working-age adults grow old they will bhave only one child or no children (in Sub-Saharmay not survive because of AIDS)—or to be sindivorced. When the need for long-term care ariswill have no alternative to public programs, furthfi nancial burden on the government. Moreover, mthe work force, leaving fewer people available to 

Can the Elderly Afford Health-Care 

Health-care rationing—particularly for new inno

more widespread and systematic and increase inelderly. Advances in medical technology like genorgan replacement and gene therapy against intrlike cancer and Alzheimer’s could, according to demographers, offer life spans of 150 years or mraises important questions about whether nationacover most of such innovations. As health-care ctions put upward pressure on budgets, the governnational coverage of treatments to save money. Tthey cannot afford attractive new treatments, parnot saved suffi ciently for additional insurance.
28

• Aging countries’ debt will rise as social safety net spending skyrockets, putting pressure on int

crowding out productive investment.

• Divergent fi scal policies to deal with aging will strain regional economic unions like the Europ

Union.

• Global fi nancial markets could be roiled by wide swings in capital fl ows with slower aging cou

less capital than fast-aging ones. 

Demogr

in 

The varyinthe very laraffect their 

slower aginStates) exprapidly aginRapid agincountries wdecline mo(the economthere is less ees would ltheir moneymovement investment toward devcould lead ing shifts in capital fl owa fi nancial 

Percent of GDP

Estimates for 1999 and forecasts for 2000 taken from the European Commission publication Spring 2000: Economic Forecasts 1999-2001.

Figure 9 Gross Government Debt

0 20 40 60 80 100 120 140

Japan

United

 Kingdom

Italy

Germany

France

Figure 10 China: Population, 2025

Male Age Female

80 70 60 50 40 30 20 10 0 0 10 20 30 40 50 60 70 80

85+

80-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Source: US Census Bureau, International Data Base.

Population in millions
The fact that all of the rich countries will simultaneously experience a dramatic 

upward shift in their population age structures, coupled with a world that is likely to be much more integrated via trade, technology, and 

fi nancial linkages, 

creates the potential for global economic spillovers. In the absence of dramatic policy shifts within two decades, much of the industrialized world could 

fi nd 

itself with few choices but nonetheless some combination of increased debt or higher taxes, which could lead to slower growth worldwide. Some of today’s 

large capital exporting nations may fail to enact timely 

fi scal reform and begin 

running massive budget de

fi cits. Because the pool of total saving in the world 

is also expected to decline, pressure on interest rates will rise and the cost of debt in highly indebted countries will increase:• Japan is the main concern, as its debt has steadily climbed over the past 

decade

—now offi cially equal to 12 percent of the world’s GDP but unoffi cially probably 18 percent of world GDP. If Japanese Government bonds 

were to suffer a long slide in value (i.e., Japanese savers move their money out of bonds into higher yielding investments), driving up interest rates in the process, Japan would be pushed into a debt-driven downward spiral of economic performance. This in turn could cause a prolonged recession in East Asia and weaken growth in the United States and Europe. 

• In Europe, rising debt levels in some countries such as Italy, which currently 

has among the largest debt burdens at 110 percent of GDP, could put pressure on the European Central Bank to raise interest rates, thereby pushing down growth in the euro zone. The currency crises in Europe in the early 1990s were partly the result of the perception of currency traders and speculators that the old-age welfare programs of Europe were unsustainable and most worrisome in countries with high debt levels and sluggish growth. 

Spotlight on China

Population aging for many developing countries, wbeing at the crisis level that developed countries arbe even more critical because developing nations aprepared to deal with it. The situation will be particwhich has more than onefi fth of the world’s total p

not have the same options available to it to cope wcountries in the developed world have: 

• It most likely will not have the sophisticated tax 

markets, and developed pension and health-care mature economic development before its popula

• While in some European countries the aging tra

over a century or more, in China this change wifew decades. 

• Moreover, China’s elderly population is likely to 

cated—and hence less productive

—-and thus m

technology for productivity. 

A combination of rapid fertility decline since 1970in mortality, and the large baby-boom cohorts born and early 1970s is the root of China’s unprecedenteBy 2025 there will be more than 200 million peoplthan 300 million by 2050

—close to the entire curre

United States. China’s population aging will complicate its ability nomic growth because unfunded pension obligatiocare costs will add to a debt stock that is already rihad to deal with retiring large stocks of nonperformas employment dislocations and pension recapitalizwith privatization. Moreover, the working-age poppension system will be shrinking proportionally to population ages 20 to 59 to those 60 and over is prthe current 6.7 in 2000 to 5.0 in 2010 and 2.7 in 20

system is already faltering (some academics call it 

and pension costs are expected to exceed 40 percen2030s, according to a US think tank. In an economlive near subsistence, this could be a crushing burd

What Will Happen to the EMU? 

Divergent 

fi scal policies will strain regional economic unions like the 

European Monetary Union (EMU). Currently, there are few effective circuit breakers in place. The offi cial de

fi cit criteria for membership in the EMU at 

3 percent of GDP do not take into account unfunded pension liabilities. As these come due, countries that fail to reform their public retirement systems will 

fi nd it 

diffi cult to meet the EMU’s de

fi cit ceiling. Whether the ceiling will be retained at 

the insistence of countries that have put their 

fi scal house in order or whether it will 

be eased in either case could unravel the EMU. Germany’s actions on the debt issue 

will be telling for the rest of Europe. 
30

• To alleviate fi scal pressures, the developed world will need to act soon with a combination of p

• Productivity gains and increasing labor force participation could mitigate the problem somewh

controversial than options to reduce benefi ts.

Table 6Labor Force Participation Comparison

FranceGermanyUnited StatesUnited Kingdom

Labor force participation rate, 1993-94(percent)

74.578.087.072.7

Male

59.660.871.452.8

Female

2.83.9

16.8

3.5

Males 65 and older

Source: Aging Societies, edited by Barry Bosworth and Gary Burtless.
 31

The 

fi scal cost of global aging leaves developed countries with few easy 

choices. No single policy initiative is likely to be suffi cient to alleviate the 

pressures. Improvements are likely to be uneven across countries. Increase output and its rate of growth. A higher level of per capita output would directly limit the negative impact of aging on living standards and provide additional revenue. However, the extent to which raising the level of output eases budgetary pressures depends on how higher output per capita is achieved: • For example, increasing output through higher utilization of labor (i.e., 

encouraging more citizens to work or encouraging those who are already in the work force to work more) would yield the most immediate results. This would also lead to a buildup in implicit government pension liabilities for the future, however. Japan has slack in its labor allocation (underemployment) and has yet to include women in its work force in great numbers. That said, according to a simulation model, with female participation rates as high as 85 percent in some age groups, much higher than in the United States today (about 62 percent), a work force decline in Japan can only be reversed for the 

fi rst decade of the 

21st century, with long-term trends asserting themselves in succeeding decades. 

• Improving growth performance through gains in productivity could 

alleviate some countries’ pension pressures. However, the effect on the 

ratio of pension spending to GDP might not be signi

fi cant for those 

countries

—many of which are in Europe

—where pension bene

fi ts are 

directly linked to wages.

Raise tax rates. This is an option but a dubious one because few countries 

have much room to raise taxes: • In the European Community, for example, the total tax burden already 

averages 46 percent of GDP. Collecting an extra 9 to 16 percent of GDP might prove economically impossible.

• The overall tax burden on the Japanese people, including national and 

local taxes, is already expected to rise from 36.9 percent today to a range of 50 to 56 percent over the next half century, according to offi cial 

Japanese Government projections.

The New Economy: A Palliative for Dem

Economic reforms and productivity gains associeconomy have the potential to offset the macroeand declining fertility to some extent: 

• The extent to which aging contributes to incre

lower investment, and slower growth depends assumptions that new economy reforms can apractices can change the level of technologicagrowth, government policy responses to agingother factors that will determine the cost of aggovernments and economies.

• Many argue that the new economy will lead m

a golden age of productivity growth similar to scientists invented electricity, the automobile, pictures, radio, and indoor plumbing. 

Increased productivity growth resulting from new could signi

fi cantly offset the costs of supporting 

New economy policies tend to increase productieffi ciency of labor and capital:

• According to a recent study by two Federal R

mists, the US success at innovation—particulchip technology—and at integrating informatexisting business operations together account a 1-percentage-point increase in US productivfi rst and second halves of the 1990s. 

• Although productivity growth in Europe and 

with that in the United States, many observerity of these countries could rise as they invent integrate them into their economies. Japan, foworld in wireless connectivity while Europe dboth emerging technologies. 
32

• Raising retirement ages or trimming benefi ts entails political costs.

• Immigration as a viable option requires extraordinarily large numbers of people to maintain su

current levels.

• Pronatalist policies are long-term solutions that have not yet proved effective.
 33

Raise retirement ages or trim benefi ts. Raising retirement ages is often considered too diffi cult in Europe where the Germans, for example, are retiring between 55 and 60 because of “work-related stress” and French 

workers have shut down the country in recent years, demanding earlier retirement in a nation where the average retirement age is 59: • Moreover, to hold dependency ratios steady and therefore benefi ts and 

tax rates constant, by 2030 retirement would have to begin at 78 in Japan, 74 in France, 73 in Italy, and 72 in the United States. By 2050, retirement ages in these countries would need to rise to 81, 78, 79, and 75 respectively. Cutting benefi ts is often a politically charged issue and 

usually not palatable, especially in Europe. 

• In 1995, Silvio Berlusconi’s Forza Italia government was buffeted by a 

number of political storms, all of which it weathered except for pension reform, which shattered the coalition. 

• That same year, the Dutch parliament was forced to repeal a recent cut 

in retirement benefi ts after a strong Pension Party, backed by the elderly, emerged from nowhere to punish the reformers. 

• In 1996, the French Government’s modest proposal to trim pensions 

triggered strikes and riots.

Increase immigration. Many aging developed countries are exploring 

replacement migration in their attempt to maintain support ratios at current levels. For most, however, this strategy will be ineffective and politically unacceptable because of the extraordinarily large numbers of immigrants that would be required: • From 2000 to 2050 net total number of migrants needed to maintain the 

size of the working-age population in Japan would be 32 million (nearly 650,000 per year), in Germany 24 million (487,000 per year), and in Italy nearly 19 million (327,000 per year), according to the UN.

• In many European countries, non-European for

nearly 10 percent of the population. 

• One alternative is to generate a population of “g

commonly done in the Middle East. Acceptance large numbers that would be needed, however, cultural changes in Japan, for example, which cnumber of resident aliens. 

Have more children. Implementing pronatalist pr

increase national fertility rates is also an option. Btoy company, is offering its female employees $10second child. These programs have generally not boften aggravate other problems:• Sweden, for example, appeared to have substan

fertility rate in the early 1990s as a result of genincentives to encourage childbirth, but the lates

that Swedish fertility has dropped to 1980s levepronatalist programs encourage couples to have they would have done otherwise but do not incrof children born. Even if successful, these polichave a signifi cant effect on dependency ratios b

• Programs to increase birthrates could lead to a 

women in the work force, further aggravating th
34

• The United States is in a better position to cope with the aging issue than most of its developed country counte• But Europeans and Japanese are beginning to take the issue seriously.• Unless US allies completely reengineer their entitlement programs, they will have a long, painful road ahead.• The challenge: develop retirement systems that do not undermine private savings and investment through cripp

taxation on the young.

• We are already seeing a rise in polarization among age groups; a rise in intergenerational confl ict may not be f

Figure 11 Imbalances Mean Higher Taxes for Future Generations

-100

-50

0

50

100150200

Percent increase

Thailand Sweden New Zealand Canada

France United States Brazil Germany Italy Japan

Increase in taxes (based on generational accounting) for the future generation of selected countries compared to the current generation. 

For Japan and Italy, unless current genemore taxes or dramatheir purchases of gservices, their next gwill face lifetime net that are more than twas current rates. Acgenerational accounmethods, all other thconstant, the smallefuture generations recurrent generation, timbalance.a

aAdapted from Lawrence K

Willi Leibfritz’s NBER WorAn International ComparisGenerational Accounts.
35

The United States is further along in its coping strategies to deal with the aging trend: • Labor force growth through immigration, a common practice in the 

United States, is considered a political nonstarter for Japan and Europe. Labor unions are political powerhouses in many countries, such as Italy, where 90 percent of trade union members are retirees. 

• Defi ned contribution plans such as personal voluntary savings plans like 

US 401(k) and individual retirement plans—which now share equally in satisfying retiree incomes—are rejected by the Japanese and many Europeans, who question the security of such private investment schemes over the long term. 

• Moreover, unlike the European and Japanese systems, the US system 

has been able to switch to a bifurcated system; roughly half of each worker’s benefi ts come from employer-sponsored pensions. In contrast, 

80 percent of a German’s average retiree income comes from stateprovided retirement. Italy and France currently have no employeesponsored pension systems.

That said, the challenge of global aging is beginning to fi nd its way onto the political agendas of other developed countries:• In March 2000 Japanese politicians suggested in a white paper entitled 

“Empowerment and Better Governance in the New Millennium” that the government’s major concerns about its falling birthrates and aging population could lead to some easing of immigration laws, but probably not far enough to address the inevitable labor crunch. That said, Japan quietly cut pension benefi ts by 20 percent for the typical 40-year-old.

• Progressive governments in Europe are putting aside ideology in favor 

of fi scal expediency. The ex-Communist Massimo D’Alema in Italy and Gerhard Schroeder and his Red-Green coalition in Germany are cutting back on benefi t guarantees and instituting systems of private retirement 

provision.

• Five of the G-7 nations have already scheduled 

the full-benefi t retirement age. The United Kingare even augmenting unfunded public retiremensystems based on personally owned savings. 

Measures taken to date are likely to be insuffi cient problems. Unless policymakers in these countries aging issue more comprehensively in the near futu

ment programs that can be self-sustaining no mattity or longevity, even in economic downturns—theof having to address more vexing problems in the advance notice and gradual implementation that, gthe developed world’s problems, leave no room fo

Will Intergenerational Confl i

A critical uncertainty is what, with ever more eleinto the hands of the elderly, will motivate politibehalf of the long-term future of the young. We a rise in polarization among age groups in some intergenerational confl ict may not be far behind:

• Senior power is rising in Europe, where it ma

through independent senior organizations (as than in labor unions and often union-affi liated that formally adopt pro-retiree platforms. In Gworking people are angry at high taxes and an security system that makes unemployment too larger burden on the employed. 

• In Singapore, Senior Minister Lee Kuan Yew 

each tax-paying worker be given two votes to clout of each retired elder.
• The world’s poorest and often most politically unstable 

countries—including, among others, Afghanistan, 

Pakistan, Colombia, Iraq, Gaza, and Yemen—will 

have the largest youth populations through 2020. 

• Most will lack the 

economic, institutional, or political resources to effectively integrate youth into society. 

Source: US Bureau of the Census, International Data Base.

Figure 13 Percent of Population 15-29 Years Old

05

101520253035

Latin America/ Asia and Oceania 

Caribbean

Middle East/

North Africa

Sub-Saharan

Africa

2000 2010 2020

Percent

Sub-Saharan Africa will have the worst youth bulges through 2020.
37

Large Youth Populations: Of Greatest Concern in Developing CountriesSeveral of the world’s poorest developing countries will have the world’s largest youth populations over the next two decades. We defi ne a youth 

bulge as a disproportionate concentration of population in the 15 to 29 age range: • Yemen, Iraq, and other countries in the Middle East and Sub-Saharan 

Africa will have among the world’s largest youth populations, the latter 

even with the impact of AIDS. 

• The size of youth bulges will decrease in all regions of the world except 

for Sub-Saharan Africa over the next 20 years, but populations of youth in many developing countries will remain large. 

Youth bulges peaked in Latin America and Asia earlier and at lower levels than did those of Africa and the Middle East and are now almost entirely absent: • In Latin America, the youth bulge began in the 1960s, peaked in the 

1980s, and ended in the 1990s. 

• Asian countries experienced the briefest and least intense youth bulge 

between the mid-1970s and the mid-1990s. The youth bulge has been in rapid decline since the late 1980s.

Most countries with large youth populations, even more fi nancial resources like Saudi Arabia, are pardeal with them: • Many of these countries have among the world

and have political and institutional constraints tnomic activity and private investment needed to economic growth and job creation requires sign

savings and investment, which many of these cto obtain. 

• The International Labor Organization estimates 

force will increase by nearly 1 billion over the ngrowth coming from the developing world—pu

on already weak economies to create hundreds jobs. The shortage of professional entry-level joconcern. Unemployment in the Middle East for among young semi-educated city dwellers who education to raise expectations and aspirations manual low-status jobs.

• With fertility rates remaining relatively high in 

pressures will continue on education, health careconomic infrastructures.
• The failure to adequately integrate large youth populations in the Middle East and Sub-Saharan 

to perpetuate the cycle of political instability, ethnic wars, revolutions, and antiregime activitieaffect many of these countries.

• Youth bulges have generated such political instability in the past in Algeria, Iran, Northern Irel

Sri Lanka. 

• Political instability would make it even more diffi cult for poor countries with large youth popu

economic growth and encourage the foreign and domestic investment needed to generate new j

0.89

1.82

1.67

1.46

1.45

1.13

1.07

0.95

0.94

0.93

0.93

0.88

0.85

0.82

0.77

Source: US Bureau of the Census.

Figure 14 Ratios of Young to Old in Largest Youth Bulge Countries, 2020(Ratio: the number of 15-to-29-year-olds to the number of 39-to-54-year-olds)

Latin AmericaMiddle East/North AfricaAfrica

0.0 0.5 1.0 1.5 2.0

Paraguay

Belize

Haiti

Guatemala

Honduras

West Bank

Oman

Saudi Arabia

Yemen

Gaza

Ethiopia

Zambia

Namibia

Botswana

Swaziland

Ratio
39

Youth Bulges May Contribute to Political Instability The failure to adequately integrate youth populations is likely to perpetuate the cycle of political instability, ethnic wars, revolutions, and antiregime activities that already affect many countries: • According to a US Government study, when the cohort of 15-to-29-yearolds exceeds the 30-to-54-year-old cohort by a ratio of 1.27 or more, 

a country’s probability of instability—defi ned as revolution, ethnic war, 

genocide, and disruptive regime changes—increases. 

• Large youth populations may challenge some governments’ long-held 

political and foreign policy agendas, possibly leading to shifts in the relationship of some countries with the United States. 

• A number of political, economic, and social problems provides the 

principal contribution to civil unrest, but demographic pressures aggravate them. 

Numerous scholars have linked youth bulges to unrest in Algeria, Northern Ireland, Gaza, Iran, Turkey, Egypt, Sri Lanka, and elsewhere. For example:• Turkey’s Kurdish population—involved since 1984 in an insurgency 

against the Turkish Government—emerged from a youth bulge in 1995. 

High unemployment and educational shortfalls aggravated conditions that led to coups in 1971 and 1980. 

• In Sri Lanka, the Sinhalese national insurgency in 1970 and the Tamil 

rebellion in the 1980s reached peak levels of support when more than 20 percent of their populations were 15 to 24 years old. The government eventually moved 14,000 youth into “rehabilitation centers” to help 

alleviate the problem. 

• Algeria’s youth bulge contributed to long-lastin

lacked adequate educational, employment, and Algeria’s unemployment is still more than 30 p

has 20-percent unemployment—has some of thas in Algeria. According to a noted academic exEgyptian university graduates are looking for joindignant, and prime candidates for joining the 

• By the mid-1970s half of Iran’s population was 

was under 30. This directly contributed to the sthat contributed to the fall of the Shah and the rhostile to US interests. 

• Early in the confl ict in Northern Ireland, the Ca

of Ulster, with a younger age structure than Promore active.

A Window of Opportunity for the 

UN projections for Middle Eastern demographic years predict a gradual shift in the age structure dependency ratio and in favor of the economical15 and 64) as a result of a sustained decline in fe

• On the basis of these trends the Middle East w

opportunity to raise its GDP per capita growth points through increased savings, investment, improvement.

• To realize this potential, however, the region m

erable attention to strengthening its fi nancial, institutions while also adopting a coherent set economic policies.
40

In addition to contributing to political volatility in several already unstable regions and countriesbulges may: • Provide large numbers of Afghan and Pakistani youth willing to engage in terrorist activities.• Empower youth to slowly weaken authoritarian regimes in places like Iraq, a trend that, while 

some US interests in the longer term, would generate serious confl icts between the governmenin the shorter term. 

• Signifi cantly change the ethnocultural mix of the West Bank and Gaza to include a much highe

Palestinians to Israelis. 

• Boost legal and illegal migration from Mexico to the United States.• Exacerbate other problems in Sub-Saharan Africa.• Increase the number of human casualties US adversaries are willing to accept in battle. 
41

Several Potential Costs for the United StatesLarge youth populations are likely be the most disruptive to US interests in Afghanistan, Pakistan, Saudi Arabia, Mexico, Gaza, and the West Bank, all places where unemployed alienated youth provide fertile ground for radical political movements:• New generations of unemployed Pakistanis and Afghans—the latter of 

which see war as virtually the only lifestyle opportunity—will continue 

to provide a ready source of labor for terrorist groups.

• Saudi Arabia and Iraq could see some instability, at least in the medium 

term. Although criticism from unemployed youth that are able to mobilize themselves as a group could pressure governments to adopt more economic reforms and more democratic styles of leadership over the longer term, in the shorter term tensions will increase between the governed and the governing. 

• An increase in the number of unemployed Mexican youth is likely 

to generate increased illegal and legal migration to the United States, potentially straining social services and increasing anti-immigrant sentiment, at least in the short term. 

• A US academic estimates that at current growth rates the Palestinian 

population in the West Bank and Gaza—which includes many youth—

will increase from 1.8 million in 1990 to 4.7 million in 2020 while Israel’s will grow from 4.6 million to 6.7 million over the same period, signifi cantly altering the ethnic balance in the region. Unemployment in 

Gaza is more than 30 percent, and standards of living are one-tenth as high as in Israel.

In Sub-Saharan Africa, youth bulges are likely to eexisting problems: • Increases in youth populations will aggravate p

terrorism, antiregime activities, warfare, and crmany existing factors that already are making thincreasingly diffi cult to surmount. 

Large youth populations increase the availability aernments to draft youth into the military, which caon US interests—the militaries of Bangladesh, Pakexample, have provided critical manpower to interand disaster relief efforts: • With more youth in the military, unemploymen

social stability is preserved to some extent. Somneed large armed forces and paramilitary auxiliMoreover, armies can be a tool for increasing sin many multiethnic countries. Many developinas a vehicle for imbuing their young with pride 

US adversaries with large youth populations may bto engage in conventional military confrontations States as large youth labor forces reduce the margiindividual soldiers. 
42

Migration could be a partial solution to demographic imbalances:• Migration could provide jobs to workers from developing countries and labor for the develope• Developing countries would gain hard currency and greater political infl uence in countries that 

immigrants. 

• The tax and consumer bases of aging societies could increase, helping to alleviate the budgetar

supporting aging populations. 

Figure 15Migrants to the Developed World

The number of persons migrating to the developed world has increased. 

0

102030405060708090

100

1986-90 1991-95 1996-2000

Percent Perce

Immigrants as a Share of Annual Population Growth in Developed Countries

Declines in fertility and increases in increase many developed countriesimmigrants.

Countries Whose Populations arTo Decline Between 2000 and 20

AustriaBelgiumFinlandGermanyItalyJapanNetherlandsSpainSwedenSwitzerland
43

Migration: A Partial Solution to Other Demographic ChallengesGlobal migration—which is likely to increase over the next 10 to 20 

years—could provide a partial solution to problems associated with both aging and large youth populations. An estimated 40 million people now live outside their native country. Migration would increase the availability of workers in aging populations and of jobs for unemployed youth in many developing countries: • The labor force in the developing world is expected to almost double 

from 1.7 billion people in 1998 to 3.1 billion people by 2025, according to the OECD. 

• According to the OECD, China’s working-age population will reach 

955 million by 2020 from 732 million in 1995, requiring the creation of millions of new jobs.

• In the developed world, the EU is projected to need some 1.7 million 

high-tech workers by 2003, according to the press, many of which will have to come from outside the EU. 

• In the United States, the National Research Council expects labor shortages to leave unfi lled 890,000 high-tech jobs out of 1.6 million this year 

and expects similar imbalances to continue for at least several years. 

Migration also could reduce strains on social systeyouth bulge countries: • Assuming current trends continue, migrants wh

host countries with aging populations will help ment revenues. Immigrants currently pay $153 EU, according to a private economic institute, a members’ annual revenue intake. 

• Emigration will help relieve the social and polit

with large populations of unemployed and restl

• Hard currency holdings of some developing cou

as workers migrating from youth bulge to aging currency earnings to family and friends in their 

• Remittances have in the past provided a major s

exchange for some governments—including In

among others. 
Factors that will increase global migration over the next 20 years include:

• Economic reform, globalization, and democratization.• A growth in income differences between wealthy and poor countries resulting from the mixed 

economy reforms.

• Illegal migration, increasingly facilitated by crime syndicates and corrupt offi cials, which is pr

legal migration.
45

Why Will Migration Increase? A variety of factors will boost global migration through 2020, making even the most homogenous states more diverse:• Increased privatization and foreign investment, trade liberalization, 

and enhanced communications will encourage more people to migrate globally. 

• Democratization in many developing countries will loosen state control 

over migration, while the ease of travel and communication will facilitate cross-border movement. 

• Immigration laws in receiving countries that give priority to family 

reunifi cation and the growth of powerful ethnic communities in those 

countries will boost pressure to increase immigration of certain ethnic groups. 

• In Russia and other states of the former Soviet Union (FSU), weak 

immigration control regimes, fi tful economic development, ethnic confl ict, and discrimination against minorities will increase migration pressures that already have produced over 10 million migrants since the 

FSU’s breakup, 6 million of them Russians. 

The uneven spread of the new economy and increased income gaps between the haves and the have nots, are likely to increase the number of migrants moving to the United States and Europe:• According to a recent CIA study, the spread of market liberalization and 

institutional reforms that are crucial for countries to successfully exploit new technologies will be highly uneven, resulting in growing income differences.

• The historical record shows that migration gene

pull factors—in which individuals seek better ein other countries—is the most common form o

We have no reason to suspect that this type of mwhich include the movement of Turkish guest wthe late 1970s and the 1980s and the movement into the southwest United States in recent yearsHigh fertility can contribute to these movementcountry’s economy is incapable of providing emof youth entering the work force.

Illegal migration, which international criminal alieand corrupt offi cials increasingly facilitate, is set tlegal migration:• Illegal immigrants in the past comprised some 2

grants, but a number of indicators suggest they 50 percent or more of new entrants in many of timmigrant-receiving countries, such as those in 

• Some 4 million would-be immigrants on the ea

periphery of the EU are poised to emigrate—mfi nances and opportunities permit. 

• Toughened acceptance criteria for asylum seeke

immigrants to move illegally. 
• Forced migration—resulting from military confl ict, economic crises, natural disasters, or simil

remain a critical issue. 

• Large-scale migrations can quickly alter ethnic balances, causing instability.

 Causes of Voluntary Migration 

Outward Movement

• Labor migrants• Professional migrants • Traders• Tourists 

Return Movement 

• Returning migrants and refugees• Voluntary repatriates• Voluntary returnees 

Migration: Quick Facts 

• The number of countries that both send and receive migrants has more tha

quadrupled since 1970. 

• The number of major sending and receiving countries has more than doub• More than one person in 40 is an immigrant dispersed over a growing num• Border patrols apprehend 1.5 million illegal immigrants at the US-Mexica

annually.

Latin America: A Growing Immigration Issue for the United States

Civil instability or economic deterioration in a number of Latin American countries could boost immigration to the United States in a 

• The continuing deterioration of the political, human rights, and economic situation in Haiti could lead to a repeat of the immigratio

fi rst half of the 1990s.

• The escalating civil confl ict in Colombia that has displaced nearly 1 million people already has produced a near doubling of visa a

year. Illegal migration is on the rise and will surge as the confl ict intensifi es.

• Almost any scenario involving a change of government in Cuba will have the potential for generating substantial migration—durin

• Another economic crisis in Mexico, the largest source of migrants to the United States, would lead to a surge of legal and illegal im

United States. 

• The United States will remain vulnerable to explicit or implicit threats by foreign governments such as Cuba and Haiti to use mass 

in bilateral relations or to reduce political pressures arising from domestic policy failures. 
47

Forced or mass migration—often resulting from military confl ict, or sudden 

or prolonged economic crises or natural disasters—will be among the most 

diffi cult demographic trends for governments to prepare for and deal with because it often comes unexpectedly: • Economic emergencies such as the debt and energy crises of the 1970s 

and 1980s and the currency crises of the 1990s resulted in stepped-up migration to developed countries. In Asia, the 1997-98 fi nancial crisis 

prompted Malaysia, Thailand, and South Korea to expel substantial numbers of foreign workers. 

• The movement of Bangladeshi refugees into the Indian state of Assam is 

another example of uncontrolled immigrant fl ow. Population growth in 

Bangladesh is overtaking the availability of agricultural land.

Governments and political groups use forced migration for a variety of reasons, many of which challenge both host and home governments. Governments induce such fl ows to preserve homogeneity, to remove 

politically troublesome groups from the body politic, and to exert pressure on neighboring states:• The Vietnamese Government in the late 1970s expelled large numbers 

of ethnic Chinese in an effort to preserve the cultural homogeneity of Vietnam.

• Iraq forcibly expelled Kurds in 1991 to elimina

troublesome elements in the country. 

• Fidel Castro used the 1980 Mariel boatlift as a p

United States by sending thousands of Cuban c

For host nations, large, unexpected populations of structure and natural resources, causing economic rate of resource usage and sometimes political uph• If a refugee group moves into a region that is sp

government concerns could rise that the migranto colonize the affected region and perhaps havstate. Some Russian elites see the current movelaborers into the Russian Far East as posing this 

• In 1989, the mass migration of East Germans in

through the suddenly open Austro-Hungarian bbehind the collapse of the German Democratic unifi cation of Germany.

• In 1991, the fl ow of Kurdish refugees into Turk

abortive post–Desert Storm Kurdish uprising agled to NATO military intervention in northern Iestablish a safety zone for the Iraqi Kurds.
48

• We nevertheless see several downsides to migration:

– A slower growing ethnic group may face a closing “window of opportunity” in which the d

dominance of a rival group will leave it few options for claiming certain lands or political p

– Migrant fl ows also affect the ethnic composition of host nations, often with destabilizing re
49

If central authority is weak in states with ethnically intermixed settlement patterns and one ethnic group has a faster growing population than another, members of the latter group face a closing “window of opportunity” in 

which the demographic dominance of the rival group will leave them few options for claiming certain lands or political privileges:• This kind of demographic impact may have been one of the secondary 

causes of the ethnic strife that has plagued the former Yugoslavia during the past decade.

• From the late 1960s through the 1980s, Muslim population growth rates 

in Bosnia outstripped those of Serbs. Over time the increasing Muslim proportion of the total Bosnian population translated into greater Muslim political, economic, and cultural clout at the expense of the previously dominant Serbs.

• Between 1948 and 1981, the Albanian proportion of the total Kosovo 

population rose from 69 percent to 77 percent. As federal Yugoslavia began to show signs of strain in the late 1980s, Serbs in Kosovo began to agitate more actively for Belgrade to offer them greater rights and protections in the face of growing Albanian control of the Kosovo regional administrative bureaucracy. This was the key issue that Slobodan Milosevic used to take power in Serbia in the late 1980s.

Bosnia and Kosovo are not by any means isolated examples of the dangers of demographic shifts in ethnically mixed environments. The history of confl ict in Lebanon and Northern Ireland supports this issue as well. The Lebanese civil war of 1975-90 began when Shiite Muslim population growth threatened Maronite Christian control over Lebanon’s national 

political institutions. Northern Ireland’s trouble between Protestants and 

Catholics began in the early 1970s, just as demographic trends in the province were swinging in favor of the Catholic minority.

Could Immigration Change the Soc

of Host Nations? 

Migrant fl ows could rapidly change the ethnic co

areas, often with unstable results. Immigrants artend to bring with them family practices of their ing higher fertility rates: 

• For example, in Germany, foreigners will mak

total population by 2030 and over half of the cities like Munich and Frankfurt. 

• Foreign-born residents now comprise nearly 1

population, up from 6 percent in 1980, with imUnited States expected to climb steadily over Hispanics, who represent the largest single grthe United States, have on average about 2.95 lifetime (total fertility rate), compared to 1.84 American women and African-American wom

• Non-Russian ethnic groups represent a small 

all Russian population, but their higher fertiliwhen combined with ethnic outmigration from regions, will create substantial non-Russian mof regions, especially the North Caucasus, wipolitical consequences. A critical outcome miin Moscow about indigenous Islamic fundamwith external Islamic terrorists.
50

• Developed countries will need record levels of immigrants to support their retirees: 

– Immigration to Germany would have to far exceed the 1 million immigrants in 1990 that re

unifi cation.

• Strong public resistance to immigration—especially in Germany and Japan—will fuel political 

controversy:

– Japan will face the greatest political hurdles because of its traditional emphasis on ethnic a

homogeneity.

• Sending countries will resent the fl ow of high-skilled workers to wealthier countries. 

1998-99 1995-2000 2001-05 2005-10 2010-15

European UnionUnited StatesFranceGermanyJapan

760

n/an/an/a

170

5,302

37

842

1,3985,990

6,171

-13

333

3,2515,674

5,0953,620

219

1879

6,224

9,012

10,741

1,934

806

7,831

Table 7 Number of Migrants Needed To Keep Aging Dependency RatiosFrom Rising Above 1995 Levels (1998-99 estimates)

(Thousands)
51

Migration Presents a Myriad of ChallengesDespite its benefi ts and probable increase, global migration will 

present several challenges to both sending and receiving governments. The number of immigrants many countries would need to support retirees through 2050 would substantially exceed immigration levels of the past decade: • According to UN fi gures, if Germany and Japan were to use migration 

alone to ensure that the number of retirees each young worker would have to support did not increase above 1995 levels, they would have to boost immigration to record levels through 2050. In the case of Germany, immigration would far exceed the 1 million in 1990 that resulted from unifi cation. 

• Migration also would have to increase in the United States and the 

United Kingdom, although to a lesser extent than in Germany and Japan. The US and UK would face the greatest demand for immigrants in 2010-15 while Germany and Japan’s immigrant population would have 

to be highest from 2030 to 2050. 

Governments with aging populations will have diffi culty balancing the 

need for new immigrants with domestic political resistance to greater infl ows of foreign citizens: • Increased immigration to Europe, Asia, and the United States will 

initially strain their social services, and in the case of Germany fuel antiimmigrant violence. These populations will burden the infrastructure and resources of the host nation.

• Japan will have the greatest demand for immigr

the greatest political hurdles to increasing immitraditional emphasis on ethnic and cultural homattempts to increase migration will almost certaopposition from some political leaders, busines

• If political pressures lead Japan—and West Eur

lesser extent—to put off substantially liberalizincies, it would place them at a competitive disadUnited States. This will exacerbate the increasineconomic imbalances among the advanced econ

• It also will skew the “guns versus butter” debat

toward maintaining social expenditures at the eing and limit the size of military recruitment poweaken the alliance. 

Governments in sending countries also are likely ttion to excessive emigration to the developed worlcountries, emigration will drain them of their alreaeducated elites, making it more diffi cult for these c

higher growth and “catch up” to the developed wo

• An estimated 1.5 million skilled expatriates fro

currently work in Western Europe, the United SJapan. More than 500,000 students from develostudying overseas, roughly two-thirds of whom 

• Countries in Sub-Saharan Africa will be among 

region already has lost some 20,000 professionadecade, including a total of some 30,000 Ph.D.sUN Human Development Report. 
52

• Immigrants will increasingly seek to effect change and spark debate over host countries’ foreig

• Immigrant communities will take advantage of growing global communication networks to ral

geographically dispersed countrymen. 

• The sudden upsurge in strength of the Kosovo Liberation Army (KLA) during the summer of 1

been partially due to fundraising efforts by the Albanian diaspora in the West.

Source: UN Population Division.

Figure 17Net Number of Migrants To Maintain Size of Population

Thousands of migrants Thousands of m

0 5000 10000 15000 20000

European Union

Europe

United States

United Kingdom

Russia

South Korea

Japan

Italy

Germany

France

0 200 400 600 

European Union

Europe

United States

United Kingdom

Russia

South Korea

Japan

Italy

Germany

France

2010-15: Annual average net migration required to maintain the potentialsupport ratio, i.e., ratio of working-age population (15-64) to the old-agepopulation (65+) at the highest level it would reach in the absence ofmigration after 1995. 

2010-15: Annual average net number of migrants neeof the total population at the highest level it would reamigration after 1995. 

000
53

The immigrants who do move to more developed countries increasingly will seek to effect change and spark new, potentially contentious debate over host countries’ foreign policies: 

• The growing information links available through robust information, 

communications, and mass media links, including the Internet, international TV news networks, and global banking nets, are giving activist elements within immigrant communities more rapid and visible means of calling attention to issues of interest in their home countries. 

• Immigrant communities can mount international public relations campaigns to demonize opponents of their home state and raise funds for the 

purchase or transfer of arms. Conversely, immigrants can exert pressure on host governments to turn against the enemies of their home state. 

This will add to the already strong infl uence of many diasporas, 

examples of which include the following: 

• The sudden upsurge in strength of the KLA dur

at the expense of more compromise-oriented Kbeen at least partially due to fundraising efforts in the West.

• Armenian emigres in the United States have be

past two years to compel the US Government to overtures to the governments of Azerbaijan and companies secure exploration and drilling contrrich Caucasus state. 

• The Tamil diaspora in Canada and Western Eur

funneling fi nancial support to the Tamil insurgegovernment forces in Sri Lanka.
54

• For the fi rst time in human history, in 2015 the majority of people will reside in urban centers. • Urban growth will be particularly rapid in developing countries, especially in Asia.

Figure 18Urban Population by Region

Millions of people

0

10002000300040005000

AsiaAfricaEuropeLatin America & CaribbeanNorth America

1950 1975 2000 

Megacities—cities with populations greater than 8 million—that are expected to double in size by 2015.

MumbaiLagos New Delhi KarachiManilaJakarta 

26.024.6 16.9 19.414.714.0 

Million people
55

Global Urbanization: A Historic FirstFor the fi rst time in human history, the majority of people will soon (2015) reside in urban centers. Urbanization, like the youth bulge, is occurring primarily in developing countries that lack the economic, social, and physical infrastructure to foster supportive sustainable environments:• According to UN projections, nearly two-thirds of the developing world 

will live in cities by 2025. At least six cities will increase population at rates fast enough to double in just 20 years. 

• Many cities in rapidly urbanizing regions will experience population 

growth rates of 2.3 percent per year, as compared to the world average of 1.8 percent for urban areas and about 1 percent for the total world population between 2000 and 2030.

• There may be 33 megacities—cities with populations of more than 

8 million—by 2005, and 27 of those will be in developing countries.

• Mega-urban regions—sometimes referred to as extended metropolitan 

regions (EMRs)—take advantage of lower transportation and communication costs, proximity of in situ labor, and technology parks to link surrounding areas to urban environments that may reach 80 million.

Reasons for Rapid Urbanization This increase in urbanization is being driven by many factors: • Greater access to information and the attendant resurgence of urban 

centers as economic growth leaders.

• Rural devastation or gradual loss of economic vitality in rural areas.• Inherent high birth rates combined with lower infant mortality.• Government- or confl ict-generated migration.

“Push” Migration. This may occur because of ruror marginal productivity of rural land, and/or hostiThe urban center may or may not be experiencing can sustain the infl ux of people. Rural poverty in r

will drive 40 to 60 percent of urban growth in thosnearly 75 percent of urban employment in Africa i(production and exchange outside the formal job mCultural anthropologists argue that rural to urban mreligious, family, and social structures, often maki

positive behaviors among youth and thereby contrin some cases ideological extremism. In African citence of villages no longer holds, so young men in into crime. City life threatens family values in the leading to enhanced support for religions like Islamresolve societal problems.“Pull” Migration. Rural residents seek to equalize life with urban dwellers, many of whom are viewerural counterparts. If an urban area is a primary encontributor to the wealth of a region, it may have tresources to handle the infl ux of people: • As many as 130 million farmers have relocated 

the early 1980s, drawn by the prospect of highelifestyles—often earning in a month their yearly 

• The World Bank estimates that 80 percent of fu

will occur in urban areas. This offers the possiband literacy and improved health and quality of 
56

• Immigration is a driving force for urbanization.• Immigrants looking for employment tend to have higher birth rates than host country populatio• Developing nation megacities have such high population bases that even modest birth rates cre

increases in population. 
57

Immigration. Countries are loosening regulations to encourage foreign immigration for specifi c skill sets that they need in light of aging trends or new economy developments. Most of these immigrants settle, at least initially, in urban areas:• Ireland has relied heavily on immigration to fuel its new economy boom 

in recent years, but that movement is overcrowding the cities, causing, among other things, urban real estate prices to skyrocket.

• In the fall of 2000, Washington enacted legislation to increase the cap of 

work visas for foreigners from 107,500 people to 195,000 people.

• Germany (previously one of the most rigid countries in Europe on 

immigration) is offering special visas for 20,000 foreign-born information technology specialists over the next three years.

High Population Growth. Although birth rates are slowing worldwide, many developing nation megacities have such high population bases that even modest birth rates create alarming increases in total population. Moreover, immigrants, who tend to gravitate toward urban areas because of employment opportunities, generally have higher birth rates than their host country populations:• Even though population growth rates have fallen throughout much of 

Asia, past high rates have created an age structure that has a high probability for migration to cities and an urban age-sex structure conducive to population growth.

Reclassifi cation of Urban Areas. EMRs have eme

from the incorporation of high-density rural and inthe periphery of cities. These areas are often called developed countries, and their rise is particularly dareas of Asia:• Improved transportation and communications, t

services and manufacturing, and the quest by lorevenue have created mega-urban regions.

• Examples include the Tokyo-Nagoya-Kyoto-Os

dor with 43 million people and the Shanghai-NSuzhou area with 76 million people.

Smaller Cities, Bigger Prob

While there is great concern over the rapid growa greater danger lies in the excessive growth am1 million to 5 million people. These cities have nlargely informal economies that provide few socregulatory bodies that are ill-prepared for the demning. Urban populations of LDCs, with the same experience a 2.7-percent increase as opposed to 5 million inhabitants or more.
58

• Megacities typically grow faster than local governments can plan.• More than 1.1 billion people live in urban areas where pollution exceeds healthy levels, 220 m

to clean drinking water, and 420 million lack access to the simplest latrines.

• High population density, uneven income distribution, and mismanagement of social services, a

megacities, are breeding grounds for disease and social upheaval.
59

These exceptional rates of unplanned growth are responsible for severe resource depletion, environmental degradation, lessened quality of life, crime, and political or social confl ict. Successful resolution of these issues 

is often hampered by confl icting political agendas, ethnic tensions, or 

extreme social disparities: • Countries face a typical dilemma of needing foreign investment to 

employ their citizens, but they are unable to attract foreign investment because their unemployed youth are fomenting dissent and creating unstable environments. Moreover, governments end up spending money on bigger security services that could be spent on creating more jobs.

• In the past 40 years, prime agricultural land in the Beijing-TianjinTangshan area has decreased by 55 percent because of urban sprawl and 

industrial conversion.

• More than 1.1 billion people (more than one-sixth of world population) 

live in urban areas where air pollution exceeds healthy levels, while 220 million urban poor lack access to clean drinking water and 420 million lack access to the simplest latrines. 

• Diarrheal diseases have killed more than 3 million children in a 

single year. 

• Surveys conducted of residents in newly developing towns in Kenya 

showed competition for employment, high population density, government mismanagement, and poor urban survival mechanisms to be the leading reasons for excessive rates of urban violence.

Cities in developing countries in both the fi rst tier 

than 8 million people) and the second tier (urban c1 million people) are increasing faster than local gimplement, and fi nance healthy living conditions. 

to live in slums without water or sanitation on the cities. Illegal wells are removing ground water and subsidence, while unhealthy disposal systems contdrinking water. This, combined with density and mditions, creates a breeding ground for plagues both also increases the vulnerability of these large popumanmade disasters: • The outbreak of pneumonic plague in India in 1

an earthquake, which caused a migration of infepopulated urban areas. Some 855 people died wcarried to New Delhi and Mumbai by air travel

• The 1984 Union Carbide accident in Bhopal, In

deaths, primarily in shantytowns near the chem

• Rapid urban growth and the need for water in M

ated ground subsidence. Parts of the city have ssubsidence in Jakarta has allowed sea water to c11 kilometers into central Jakarta.

• Urbanization—particularly squatter settlements

and in Latin America and other developing regioften occurs on land highly vulnerable to earthqmud slides.
60

• Urban confl ict could occur at any time and for any reason.

• Environmental or health disasters, economic crisis, or longstanding ethnic, religious, or commu

tensions are common causes. 

Table 8 Cities With Major Incidents of Social Violence Since 1989

Civil/Internal War or Urban Terrorism Riots or 

Street Protests

External Warfare

Baku Buenos Aires Kabul Lahore Madrid Monrovia Oklahoma City Port au Prince 

Belgrade MumbaiKolkata (Calcutta) DhakaJakarta LagosLos AngelesRangoon

BaghdadBelgradeGroznyy

BogotaColomboKinshasaLondonMogadishuNew YorkPhnom PenhTokyo

Beijing Cairo Karachi Lima Manchester Moscow Paris T’bilisi 

Source: UN Population Division, demographic indicators 1950-2020 (the 1998 revision)
61

Urban centers provide effi ciency by colocating labor, capital, materials, and 

markets. Cities have long provided exceptional opportunities for entrepreneurship, creativity, and wealth generation. These benefi ts are accentuated 

in developing world megacities, which are often a focal point for participation in the global economy and the country’s greatest concentration of 

productive infrastructure and human capital: • In 1990 the Tokyo urban area produced 36 percent of Japan’s GDP, 

while Bangkok’s share was 37 percent of Thailand’s GDP. Urban areas, in general, contributed between 30 and 80 percent of national GDPs throughout Asia during the late 1980s (excluding Hong Kong and Singapore).

The overdependency of national economies on specifi c urban centers that 

are globally infl uenced yet locally controlled creates vulnerabilities that can affect a nation and a region. Within these rapidly growing urban areas are wide income disparities that may promote jealousy, animosity, and, ultimately, confl ict between urban poor and elites.

Moreover, confl ict in these cities could occur for many reasons: an environmental or health disaster, an economic crisis, rising unemployment, accumulated disenfranchising of the populace, or longstanding ethnic, religious, or communal/cultural tensions. Urban confl ict is hard to control because of 

the density of the urban environment and the inability to quickly alleviate the conditions that originally sparked the confl ict. Insurgents 

often employ experienced rural guerrillas and dissatisfi ed urban 

youth to leverage the asymmetric advantages in cities of dense neighborhoods, innocent civilians, and international media coverage to accomplish changes in policy or government that otherwise might not occur without months or years of confl ict. Protracted violence would certainly disrupt a city’s economic activity, with the attendant effects on the region and trade partners:

Ingenuity: Why Some Urban Areas Prosp

According to social adaptation theory, as societasome countries will face a widening gap between and ability to generate innovative ideas (in the foand reformed institutions) to solve social and tecScarcity often causes intense rivalries among intfactions that impede the development and delivetions for resource problems. There is a “thresholbeyond subsistence existence, that provides latittion. A society with a serious ingenuity gap will well-being and civil turmoil. Countries with the ity are those with the highest social friction, the ability, limited access to modern education and bconstraints on science. An adequate supply of insocial satisfaction and social solutions. aAdapted from Thomas Homer-Dixon’s The Ingenuity G

Adapt to Resource Scarcity.

• Lagos has a long history of religious, ethnic, an

often erupt into citywide violence from neighboprotests. In October 2000, at least 100 people dstreet violence. 

• Urban insurgency in Africa concentrates on reso

such as Huambo, Uige, Menongue, Kuito, or Mestablish control. 

• The 1992 destruction of the Babri Masjid Mosq

across India; 95 percent of the 1,500 deaths wer
62

• Which urban areas will successfully utilize increases in population?• And which will degenerate into areas of humanitarian crisis and confl ict?

Figure 19The Urban Century Arrives

Less 

Beijing

Mumbai

Cairo

New Delhi

Jakarta

Karachi

Lagos

Mexico City

Potential for Urban Crisis

Divisiveness of populationRate of populatgrowthInsufficient ecoopportunityLack of life sustessentialsExposure to endegradationLevel of governmanagement
63

We developed a matrix on the “potential for urban crisis” to 

evaluate key urban areas using the following characteristics that, we believe, release a populace’s potential for sustainable development or destruction. Divisiveness of Urban Population: Income inequality and ethnic or religious stresses are important ingredients in urban division. Disparate and excessive segmentation prohibits the general populace from achieving a “critical mass” to organize and infl uence. Moreover, if a culture 

encourages selfi sh individual or group behavior, it will manifest greater social friction. For example, Filipino culture encourages cooperation within rather than among groups, which isolates them from each other (clannishness) and undermines national welfare. Friction may be particularly strong if narrow coalitions have penetrated the state and limited society’s ability to reform. For example, Indian democracy encourages narrow coalitions, yet India does not have strong political parties to mediate between these coalitions and the state. The rating is based on heterogeneity of income, ethnicity, and religion, where low heterogeneity scores relatively higher on our qualitative matrix.Rate of Population Growth: High population growth in an already densely populated area creates tension. We used UN statistics for the rate of growth projected between 1995 and 2015, which are more conservative than some regional estimates.Insuffi cient Economic Opportunity: Less opportunity, particularly when combined with rising expectations (in areas like the Middle East and India where there are a growing number of well-educated, unemployed youth) leads to unemployed people who are prime fodder for groups wanting to foment dissent. This is a qualitative measurement of the ability or inability of individuals to improve their lifestyles, relative to a previous rural or urban existence. It is based on a matrix of rate of growth, cost of housing relative to income, government education expenditures per capita, and unemployment or poverty line estimates where available.

Lack of Life-Sustaining Essentials: People witho

feel disconnected from their communities, leading neighbors or government. This is a cumulative valof urban societies without potable water, sewage swaste removal. These three essentials have repercuimprovement, longevity, and mortality, and, therefExposure to Environmental Degradation: High the same effect as a lack of life-sustaining essentiaa correlation between the two that indicates a low welfare. This is a cumulative valuation of the perctions exposed to harmful levels of water and air poencroachment or subsidence, or disease.Level of Government Management: The state pl

establishing the institutions necessary to manage twhich is critical to maintaining social order. This iof the inability of urban governments to address, mgrowth rates. Local government participation rates 

are good indicators of successful management. Whfi rst glance that a lack of life-sustaining essentials mismanagement, other variables such as available constrain local governments.
64

Lagos stands out as a city particularly vulnerable to crisis:• Its population is rising so rapidly that by 2005 it will be one of the fi ve largest cities in the wor

• The basics of adequate shelter, sanitation, and water are lacking for the majority of the populac• Religious and ethnic confl icts are fed by high numbers of young people who lack economic op

• Twenty different councils are attempting to govern the city.
65

Lagos had the highest score on our potential for urban crisis matrix. The accumulation of its stresses places it in a volatile and dangerous situation.By 2005, Lagos will be one of the fi ve largest cities in the world: • It is already the most populous city in Africa with nearly 13 million 

people. 

• Since the early 1970s, after the civil war, massive migration to the city 

and large numbers of foreign refugees and migrants have pushed annual growth rates as high as 8 percent.

As a result the city will continue to be incredibly dense in certain areas, up to 200,000 people per square kilometer.The basics of adequate shelter, sanitation, and water are lacking for the majority of the populace:• In 1995, it was estimated that only 80,000 consumers out of 10 million 

residents had direct connection to potable water.

• Sewage is disposed of via open ditches and rainwater, when available, 

to tidal fl ats.

• Nigeria possesses over 250 ethnic groups, and Lagos is a microcosm 

of these dynamics. Lagos regularly experiences religious and ethnic clashes.

• Lagos State is considered a Nigerian “HIV hotspot.” It is probable that 

HIV prevalence rates range between 8 and 21 percent of the population, with the highest concentrations among the 15 to 49 age group. 

Religious and ethnic tensions are fed because large people lack economic opportunities:• There are strong divisions between Sunni and S

Christians, and indigenous ethnic groups. 

• These religious and ethnic confl icts are fueled b

ployment, inadequate water and sewage systemgrowth rates.

• Twenty different councils are attempting to gove

time when the country is transitioning to democ

Figure 20Population Growth in Lagos

05

10152025

1950 1985 199

Millions
66

• Shanghai, on the other hand, is a good example of a city that has passed through a diffi cult per

development and now seems to be managing well.

• That said, vulnerabilities associated with integrating new labor into the city’s population to sup

elderly population remain.
67

Shanghai is one of the largest cities in the world but will move down in rank because of low birth rates and a rapidly aging society. It passed through the diffi cult high population growth period of the 1950s to emerge as a world trade center with quality of life statistics equal to those of many Western cities. With the exception of informal settlements, almost every house has access to piped water and electricity. A high percentage of waste is collected, sorted, and recycled via authorized programs. The human capital of Shanghai is among the most skilled in China, and the government ranks highly with foreign investors for ease of setting up and running operations. In general the populace enjoys a high standard of living, including amenities, health care, and education.Shanghai’s ability to integrate new labor to support its rising elderly population is a concern: • The combination of improved living conditions and birth mitigation 

programs have created a life expectancy of 77 and a large bubble of elderly without a younger generation to provide social support. Currently, the population above 65 is about 12 percent. 

• The large fl oating population that is required to maintain economic 

viability is largely employed in the informal sector—from which tax revenue is diffi cult to collect—and housed in slums that do not share in the wealth.

The government will also have to keep track of the large economic disparity between the 500,000 to 1 million new immigrants each year and the existing population, which is fertile ground for discontent. The new workers want to share benefi ts not warranted by their informal standing 

in the work force, while the elderly want to prolong their social benefi ts. 

At the very least, the potential for disagreement exists between these two groups regarding issues of concern for the local government.

Figure 21Population Growth in Shanghai

05

101520

1950 1959 1968 1977 19

Millions
68

• The infectious disease burden will exacerbate demographic problems in the developing world. • In the developed world, lifestyle-induced diseases are rising, a major factor in health-care cost
69

Health and Environmental AftershocksHealth issues, particularly those caused by the spread of infectious diseases, are likely to be key factors affecting population trends. Infectious diseases are a leading cause of death, accounting for a quarter to a third of the estimated 54 million deaths worldwide in 1998. Of the seven biggest killers worldwide, tuberculosis, malaria, hepatitis, and, in particular, HIV/AIDS continue to surge, with HIV/AIDS and TB likely to account for the overwhelming majority of deaths from infectious disease in developing countries by 2020. The spread of infectious diseases results from changes in human behavior—including lifestyles and land use patterns, increased trade and travel, and inappropriate use of antibiotic drugs—as well as from 

mutations and pathogens. These diseases are likely to aggravate and, in some cases, may even provoke economic decay, social fragmentation, and political destabilization in the hardest hit countries in the developing world whose health systems are ill-prepared to deal with them. While infectious disease rates have dropped in industrialized countries, lifestyle-induced diseases are on the rise, a major contributing factor in the number of elderly requiring costly long-term care. The following are likely to be key health threats around the world:• Sub-Saharan Africa—accounting for nearly half of infectious disease 

death globally—will remain the most vulnerable region. The death rates 

for many diseases, including HIV/AIDS and malaria, exceed those in all other regions. Sub-Saharan Africa’s health-care capacity—the poorest in 

the world—will continue to lag.

• Asia and the Pacifi c, where multidrug resistant TB, malaria, and 

cholera are rampant, is likely to witness a dramatic increase in infectious disease deaths, largely driven by the spread of HIV/AIDS in South and Southeast Asia and its likely spread to East Asia. 

• The FSU and to a lesser extent Eastern Europe 

substantial increase in infectious disease incidenespecially, the steep deterioration in health care to economic decline has led to a sharp rise in dicholera, and hepatitis B and C. TB has reached throughout the FSU, while the HIV-infected pocould exceed 2 million by the end of 2002. 

• Latin American countries generally are makin

disease control, including the eradication of poldevelopment has contributed to widespread resumalaria, TB, and dengue. Brazil has a model HIdispenses free antiretroviral therapy to all who is based on bending or breaking the rules of interights on Western pharmaceuticals, leading to trUnited States.

• The Middle East and North Africa have subs

and C prevalence, but conservative mores, climlevel of spending on health care in the oil-produsome globally prevalent diseases such as HIV/Aregion has the lowest HIV infection rate among is probably due in part to the above-average unthe stigma associated with the disease in Muslim increasing use of injected drugs and loosening syouth of Iran are encouraging the spread of HIV the government.

• Western Europe/North America. The develop

health threats are from heart disease, cancer, anlarge volume of travel, trade, and immigration tthe risk of importing diseases like TB, HIV/AID
70

• Ninety-fi ve percent of people living with HIV and/or AIDS live in the developing world.

• Seventy percent of those live in Sub-Saharan Africa.

Figure 23Africa: Life Expectancy in 2010 With andWithout AIDS

Age

Without AIDS

With AIDS

Source: US Bureau of the Census, January 1998, except South Africa, revised January 1999. Note: US Bureau of the Census is revising these estimates based on new HIV prevalence information. These figures—with the exception of South Africa's—understate future reductions in life expectancy.

0 10 20 30 40 50 60 70 80

Malawi

Zambia

Rwanda

Zimbabwe

Botswana

Uganda

Burkina Faso

South Africa

Tanzania

 Central African

Republic

Kenya

Ethiopia

Cote d'Ivoire

Burundi

Congo

Cameroon

Lesotho

Democratic Republic

 of the Congo

Nigeria

Figure 24South AfrMortality

0

200400600800

100012001400

19909192 

Number of 

Source: US Ce
71

Sub-Saharan Africa is by far the region hardest hit by HIV/AIDS and is home to almost 70 percent of all HIV-positive people worldwide. In 1998, AIDS became the leading cause of death in Africa, according to the World Health Organization:• Some 17 million have already died from the disease—2.4 million in 

2000 alone—and another 25.3 million are infected with HIV/AIDS, according to the Joint UN Program on AIDS (UNAIDS). This is more than all of the continent’s armed confl icts combined.

• By 2010, AIDS mortality will reduce the national average life expectancy in hard-hit countries like South Africa, Rwanda, Zimbabwe, and 

Botswana to nearly half of the expected rate when AIDS is factored out. 

• A US Census Bureau study on South Africa shows that, by 2002, AIDS 

will kill more people there than all other causes of death combined. 

Widespread ImpactAcademic studies and diplomatic reports show that AIDS’ greatest impact is at the individual and household level, driving poor families deeper into poverty and undermining local family structure:• UN Development Program (UNDP) studies and anecdotal reports show 

that AIDS-related illness and death of parents reduce family income sharply. 

• AIDS also is detrimental to the welfare of the elderly. Those whose adult 

children die of AIDS are often forced to support both themselves and their grandchildren on limited pensions.

The effects of HIV/AIDS on African macroeconomies remain controversial and are still being studied. Scholarly, offi cial, and nongovernmental organization (NGO) observers differ widely in their fi ndings. 

According to a UNAIDS study, although the effect of HIV/AIDS is often severe on households and individual fi rms (the costs of health benefi ts 

increase as more employees become sick), macroeare hard to measure. For example, AIDS may take sistence agriculture and the informal economy witcaptured in macroeconomic data.HIV infection is generally higher among young mforces, who are often stationed away from their famaccess to casual sexual encounters. AIDS has consdocumented effect in Africa of reducing military eto AIDS of large numbers of midlevel and senior mwill be a key stumblingblock for nations attemptinprofessionalize their armed forces.A growing population of orphans contributes to risauthorities and others have raised the concern that AIDS orphans will grow up on the street and turn Nairobi. More than 300,000 AIDS orphans are in KAlthough we currently see little direct linkage betwspread instability, as the epidemic worsens over thtions that perceive their governments to be ignorinrefusing to take specifi c ameliorative actions may 

South Africa: Political Firestorm 

South Africa’s mishandling of the HIV/AIDS crivibrant democracy has made it the only country where HIV/AIDS has become a highly contentiogovernment virtually ignored the epidemic until its efforts since then, prompting domestic and incontributing to the further spread of the disease. 
72

• HIV prevalence in Africa is expected to increase over the next 10 years.• Prospects for progress, particularly in Sub-Saharan Africa, are dim:

– Infection levels remain high even in countries that have instituted HIV/AIDS education an

efforts.
73

With the exception of Uganda—which has implemented an aggressive 

effort to fi ght the disease—and Senegal, immediate prospects for progress 

against the disease in Sub-Saharan Africa are dim. The most disturbing trend is that infection levels remain high even in African countries that have instituted HIV/AIDS education and prevention efforts, such as South Africa and Botswana. Despite widespread efforts to disseminate information about HIV/AIDS and how to prevent it, sexual behaviors remain unchanged. UNDP studies and diplomatic reporting suggest that the taboo of discussing sexual issues, a cultural aversion to condom use, and a human proclivity to pursue short-term gratifi cation in the face of long-term risks—witness 

tobacco use in developed countries—contribute to high-risk behaviors. 

The same UNDP studies have found such risk-taking behaviors to be particularly true among the extremely poor. In addition, some governments remain variously in denial, apathetic, or overwhelmed in the face of the HIV/AIDS crisis: • The US Census Bureau projects increasing HIV prevalence for nearly 

all African states over the next 10 years. According to the recently updated projection for South Africa, for example, HIV will infect nearly 40 percent of the adult population (age 15-49) by 2010.

• Recent survey data and anecdotal information from Ghana, Nigeria, and 

Cote d’Ivoire suggest the disease is beginning to emerge as a serious health threat in West Africa, where it has not been a signifi cant issue 

for most of the decade.

Absent a medical breakthrough, the ability of governments and NGOs to dissuade individual Africans from high-risk behavior will be the chief variable affecting the spread of the disease. That said, Uganda and Senegal have shown that government intervention can succeed, and we cannot rule out that programs now in existence simply need more time or resources to obtain similar results.

 Estimating and Projecting HIV PrWidely differentiated behavioral, epidemiologiceven political factors affecting the course of the projecting the future course of HIV/AIDS in eac

try particularly complicated. The US Census Buthis paper draws is a complex mathematical confrom “observed” HIV infection rates and allows variance based on the estimated dates that the diinto populations. These values are then fi tted to acurve to project them into the future: 

• Alternative epidemic scenario curves take into 

duration of incubation periods in different couof sexual contact—premarital, marital, and ex

enhance vulnerability to infection (such as the diseases, which facilitates HIV transmission)at-birth or blood-transfusion-related transmisbehavior change, such as increased condom ucorrespond to actual changes in behavior that occur in some countries.

• The US Census Bureau has made implicit ass

the capacity of different governments to implpublic information campaigns. For example, tassumed that Uganda will sustain its relatively program and that the programs of countries suZimbabwe will not succeed in changing key s

These projections are under continual review anand better prevalence data become available. Suof decreasing prevalence in a country would lead projection, as would a faster-than-expected incre
74

• Environmental degradation will increase in developing and transitioning countries that have al

some of the world’s worst environmental problems.

• Environmental pressures often contribute to confl ict.
75

Environmental issues disrupt population projections in ways that are often not readily apparent:• For example, in Russia, 70 years of treating air, land, and water as 

“free goods” has left a severely degraded environment and high levels 

of pollution that are likely to have a long-lasting impact on the health, including reproductive health, of the population. 

• The World Bank estimates that India loses 57,000 people yearly to respiratory illness caused by particulate emissions. In 1991, World Health 

Organization standards on particulate matter and sulfur dioxide were exceeded in New Delhi on 294 days; Kolkata (Calcutta), 268 days; and Mumbai, 100 days.

• Deforestation in West Africa has led to soil erosion, fl ooding, 

and more mosquitoes, which make malaria—a life threatening disease—so prevalent.

Demographic challenges in many key countries will increase environmental degradation in areas that have already experienced some of the world’s worst environmental problems. Russia, Mexico, India, and China are having the most notable problems: • Russia’s vast but aged defense and industrial physical infrastructure is 

deteriorating at an alarming rate, and Russians have demonstrated scant willingness to allocate suffi cient resources to address the safety issues. 

The spectacular Ostankino TV tower fi re in 2000 is a visible reminder 

of this poor state of affairs.

• The infrastructure of the Mexico City Metropolitan Area (MCMA) 

is already inadequate, and population growth will only worsen the urban environmental problems. The city’s aquifer—seriously damaged 

by large-scale subsidence—cannot keep pace with the water requirements of its 20 million residents. Land subsidence has made the city 

prone to more fl oods and has damaged its infrastructure. In addition, the lack of wastewater treatment and hazardous waste controls in the MCMA threaten the aquifer and distribution system with microbiological and chemical contamination.

• Population growth, industrialization, poverty, u

laws, inconsistent governance, and a focus on ehave stressed India’s environment with signifi ca

and societal consequences. It is not uncommon thousands of Indians to perish and hundreds of economic losses from disasters.

• Seven of the world’s 10 most polluted cities are 

scientists estimate that 30 to 40 percent of the cacid rain. Excessive logging contributes to freq

and the World Bank estimates that almost every is polluted to some extent.

Population growth in developing countries will coof, and in some cases deplete, natural resources suwill also adversely impact the environment by:• Increasing pressure on arable land, which in tur

and increased siltation and fl ooding.

• Increasing the use of fertilizers and pesticides, l

contamination.

• Encouraging the growth of urban squatter settle

contribute to water and air pollution and providfor disease.

• Increasing industrial and transport activities tha

water pollution. 

Such pressures, according to academic Thomas Hocontribute to violent intergroup confl ict. For examsures on natural resources can combine with skewpolicies to promote increasing friction between so
76

• Water availability is likely to become one of the most pressing and contentious resource issues • Rising populations will also lead to accelerating destruction of forests.
77

Freshwater ScarcityGlobal water consumption is rising quickly, and water availability is likely to become one of the most pressing and contentious resource issues of this century, according to the World Resources Institute (WRI), a prominent US environmental NGO. This situation will only be exacerbated by population growth. Water scarcities and allocation will pose signifi cant challenges 

to governments in the Middle East, Sub-Saharan Africa, South Asia, and northern China, with regional tensions over water heightened by 2015: • By 2025, 48 countries containing 3 billion people will face 

freshwater shortages; 20 countries of the Near East and North Africa face the worst prospects. In those areas, water supplies could run out by 2100 if per capita consumption and excessive use in agriculture are not controlled, according to the UN Environment Program (UNEP) and other experts.

• A contractor report lists 17 water basins with the greatest potential for 

disputes in the next 10 years because they lack or have inadequate international water management entities. 

• High rates of population growth in several strategically important 

Middle Eastern states, for example, have increased pressure on already meager water supplies, many of which already originate outside their borders, making them more vulnerable to the “water weapon.”

DeforestationOver the past 50 years nearly half of the world’s o

has been lost, and each year another 16 million heare cut, bulldozed, or burned, according to the UN Organization. The pressure of increasing populatiolenge all countries with remaining tropical forests, of the world’s population growth will occur this dedeveloping countries depend on wood for cooking clear more land for crops, forests will continue to bing rate. By 2025, an estimated 4.6 billion people with less than 0.1 hectare of forest cover per capitaAction International, compared to 1.7 billion peop• Deforestation rates in some countries increased 

despite a surge of public awareness about the lotion in the Amazon doubled from 1994 to 1995 and forest fi res in Indonesia and the Amazon toand 1998. Tropical forests are vanishing at the rminute, according to the US Department of StatInternational Environmental and Scientifi c Affa

• Although deforestation has been halted and eve

Europe and North America, demand for wood adeveloped countries will continue to put pressuparticular, on those in developing countries.
78

• World food production will be suffi cient to meet the world’s growing population but:

– Production could increase environmental problems.– Land degradation will negate productivity advances. – Poor infrastructure and distribution systems will lead to malnourishment in parts of Sub-Sa

• Developing countries’ energy use will increase, causing higher emissions of greenhouse gases, 

surpass the emissions of developed countries.
79

Soil DeteriorationPopulation growth in developing countries will increase stress on soils from erosion and poor fertilization and irrigation practices. Lower classes are farming barren tracts to survive, which increases environmental damage, leading to a vicious downward cycle of productivity and opportunity. Land degradation already has reduced fertility and agricultural potential in many parts of the world, negating advances made through expanding agricultural areas and increasing productivity, according to UNEP: • Overall food production will be adequate to feed the world’s growing 

population through at least 2015, but poor infrastructure and distribution, political instability, and chronic poverty will lead to malnourishment in parts of Sub-Saharan Africa. 

• The WRI predicts that, without a transition to more resource-effi cient 

and less toxic farming methods, it will be diffi cult to meet world 

food needs in the future without increasing agriculture’s environmental burden. 

• With continued population growth, the amount of biologically available 

(“fi xed”) nitrogen, for example, may double over the next 25 years, 

increasing the current excess. Over the past 50 years, excessive nitrogen, principally from fertilizers (some 86 percent), human sewage, and the burning of fossil fuels began to overwhelm the global nitrogen cycle, with a range of ill effects from reduced soil fertility to eutrophication in lakes, rivers, and coastal estuaries, according to the WRI.

Climate ChangeIf developing countries follow the model of develoenergy use—spurred by population and economic 

and with it greater emissions of greenhouse gases, The developed world produces some 60 percent of developing world will be producing 60 percent of to the UNDP: • With more frequent droughts and fl oods resultin

temperatures, there is additional potential for inconsequences like increased incidences of watea resurgence and spread of infectious diseases, developing world. 

• The latest (early 2001) projections of the Interg

Climate Change indicate an average surface tembetween 1.4 and 5.8 degrees Celsius and a sea l9 and 88 cm by 2100 unless immediate steps arsions. In 2025, 12 of the 19 megacities in devellocated on coasts and will be particularly vulne
80

• Natural or manmade environmental disasters are likely to cause more loss of life and economic 

because populations are burgeoning near vulnerable areas:

– For the top 10 most disaster-prone countries of the Asia-Pacifi c region, there were a total o

disasters during 1966-90, which killed 1.7 million people and affected more than 2 billion.

– In India, nuclear power reactors are already contaminating surrounding soil areas with dan

levels of cesium. Similar effects are expected as Russia tries to extend the lives of several oaging nuclear power reactors.
81

Natural or Manmade Environmental DisastersThese events are likely to cause more loss of life and economic disruption because populations are burgeoning near vulnerable areas or facilities—such as nuclear reactors, active faults, volcanoes, coastlines, and rivers subject to fl ooding—and in countries with few resources for disaster 

mitigation: • For the top 10 most disaster-prone countries of the Asia-Pacifi c region—

Australia, Bangladesh, China, India, Indonesia, Iran, Japan, New Zealand, Philippines, and Vietnam—there were a total of 1,312 disasters 

during the 25 years during 1966-90, which killed 1.7 million people and affected more than 2 billion, according to the Centre for Research on the Epidemiology of Disasters.

• In India, nuclear power reactors are already contaminating the surrounding soil with dangerous levels of cesium. Management that 

tolerates poor operating practices and measures its level of success in terms of building new projects rather than running existing ones safely supports the notion that contamination will most likely continue. Similar effects are expected in Russia, which will be forced to try to extend the life expectancies of several aging nuclear power reactors because it does not have suffi cient alternative electrical generation.

• Turkey, Honduras, and others recently victimized by geophysical hazard 

or extreme weather events have done little in the aftermath to disperse vulnerable populations, thus remaining at risk of repeat catastrophes. Istanbul’s 8 million inhabitants live along the same fault that caused the earthquakes in 1999.

Future Technology Improvements: Impact 

Advances in energy and agricultural technologie

reduce the impact of population growth on the edecades. Cleaner fuels and more effi cient enginecells—being developed by Japan, the United Stareduce air pollution, including greenhouse gas emtion, fertilization, and cultivation practices may tion and curb soil erosion and deforestation. Bio

genetically modifi ed foods—may increase yields 

for the expansion of agricultural areas:

• The effectiveness of technological advanceme

depend to a signifi cant degree on how rapidly developing countries. Technology transfer to therefore, will increase in importance. 

• Threats to technological advancements in dev

such as those toward biotechnology posed by particularly in Europe—further delay their ad

countries that may receive the greatest benefi t 
82

Global demographic trends will pose challenges to US interests:• The United States will probably be expected to assume a larger share of the burden for increas

humanitarian assistance and military interventions needed around the world. 

• More immigrants will seek to enter the United States.• Slower economic growth in the developed world could threaten US exports, US interests in glo

markets, and US investments.

• US equities at home and abroad will be at risk from increased violence and widespread infectio
83

Implications for the United StatesViolence in countries with large disenfranchised youth populations, large infl uxes of refugees, unhealthy populations, environmental powder kegs, and densely populated urban areas will increase and create demand for the United States to support additional multilateral peacekeeping and humanitarian operations: • Such pressures will challenge the United States to focus more on regions 

of the world, such as Sub-Saharan Africa, the FSU, and rogue states, that traditionally have not been at the center of US policy interest. 

• Unmanageable urban stresses are likely to slow socioeconomic development in the hardest hit developing and former Communist countries and 

regions. This will challenge democratic development and transitions and possibly contribute to humanitarian emergencies and civil confl icts. 

• The infectious disease burden, for example, could weaken the military 

capabilities of some countries—as well as international peacekeeping efforts—as their armies and recruitment pools experience HIV infection rates ranging from 10 to 60 percent. 

At the same time, the demands of supporting increasing elderly populations will strain government coffers of other industrialized country allies who will expect the United States to assume more of the burden for managing global trouble spots.Western Europe’s and Japan’s more restrictive immigration and asylum policies and detrimental tax structures will continue to prompt more migrants 

to enter the United States, especially if their home countries are unstable or fail to offer employment opportunities: • The rapid growth of the working-age population in a number of developing countries and the reduction in real wages that will result in many of 

them will contribute to increased migration for economic reasons. 

• Immigration and the treatment of illegal immig

nerability to human rights abuses—will be amoissues in international diplomacy.

Slower economic growth in the developed world a

many as a result of widespread aging—could threain global capital markets, and investment: • For example, as more Japanese live on fi xed inc

are among the largest consumers of a wide rangservices, including semiconductors, software, happarel, and agricultural goods—they could hav

goods in general.

As a major hub of global travel, immigration, and ranging interests and a large civilian and military pUnited States and its equities abroad will remain ainfectious disease:• At highest risk will be US military forces deplo

humanitarian and peacekeeping operations in d

Closer to home, baby boomer retirement threatens shortages in the private and public sectors of the Uretirement plans allow for retirement long before a• Within fi ve years 30 percent of the 1.6 million f

US federal government will be eligible to retirewould be eligible for early retirement.
84

• Some US allies will be weakened by the trends.• Both Europe and Japan stand to lose global power and infl uence.
85

Implications for US Allies Historically, the richest developed nations have been growing, capitalexporting, philanthropic giants that have projected their power and mores around the world. A quarter-century from now these countries may instead be demographically challenged, fi scally starving neutrals who maneuver to avoid expensive international entanglements: • Elder-dominated electorates may be more risk averse, shunning decisive 

confrontations abroad in favor of ad hoc settlements.

• Reduced conventional capabilities of our allies in the developed world, 

because of manpower shortages, raise the value of tactical and strategic weapons, which could make it more diffi cult to restrict arms growth.

Without radical changes the very existence of Japan as a major economic power may indeed be at stake:• In 2010 the world could see a Japan that will have completed its second 

decade of chronic underperformance compared to other advanced industrial democracies. 

• Aging could decrease household savings, potentially leading to a current 

account defi cit in the next 10 to 20 years. 

• Japan’s demographics work against a major economic renaissance for 

the country fueled by the new economy because adopting new technologies and pushing technological boundaries forward are critical components that require young people. Japanese corporations will be starved for young, new employees who bring with them the latest ideas. 

• Budgetary constraints will almost certainly force the Japanese Government to abandon its “checkbook diplomacy” and rein in its generous 

spending on foreign assistance. 

As a result, Japan will probably pursue a stronger alliance with US security structures.

If Europeans are unable to successfully substitute their force structures, invest wisely in the human csolidify multinational defense linkages, their militdecline in the next 10 to 20 years and their infl uenwould suffer: • European armed forces will experience chronic 

both because the number of youth will be declincivilian labor markets will make military career

• Most Europeans will most likely forego large c

oriented toward territorial defense in favor of smprofessional forces focused more on expeditionEuropean periphery. 

This could either scuttle the European Defense Ininecessary: • Britain’s recently completed Strategic Defense 

leaner, more technologically advanced force thain multinational coalitions. 

• France, under Lionel Jospin’s government, is m

efforts to end conscription and cut back the nummilitary personnel from 502,000 to 352,000. 

• Germany may be the major exception in this ar

hold to the notion of a conscript army. 

In any event, skyrocketing costs of advanced militprojects make it likely that these countries will seemultinational cooperation to maintain military pow
86

• Key allies in the developing world could be destabilized.• Unemployed youth provide exceptional fodder for radical movements and terrorist organizatio

in the Middle East.
87

The risk is high that some key US allies in the developing world will be destabilized by population fl ows. The fragile political institutions of these states would be sorely tested by such events:• Because migration pressures tend to be the greatest in countries that 

have inadequate education and health care, large numbers of these migrants will be diffi cult to absorb. Increased immigration will almost 

certainly make nation-states’ foreign policy making more complicated.

• Indeed, large infl uxes of refugees often create highly charged emotions 

about territorial integrity, ethnic identity, and equitable distribution of resources that can lead to armed confl ict between states. Turkey is a 

prime example. 

High structural unemployment at a time when the national age distribution is highly skewed in favor of 18-to-24-year-olds provides exceptional fodder for radical movements in many developing countries. New waves of Islamic activism in the Middle East—capitalizing on alienated youth populations—could threaten to limit the ability of many Muslim governments to cooperate with the United States.
88

• But demographic challenges will also bedevil potential US rivals: 

– Russia faces demographic vulnerabilities that other countries and internal leaders will seek – China’s productivity and global standing are uncertain because of the large resources requi

its demographic challenges. 

• China is struggling fi scally to keep up the social infrastructure necessary to support its la

 growing, and increasingly urban population.• The aging challenges will be even more diffi cult for Chinese planners because demograp surface issues that are without precedence in the Chinese experience.

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals

Strategic Implications of

Demographic Trends: For Potential US Rivals
89

Implications for Potential US Rivals Over the next two decades, and probably well beyond, Russia’s population will continue to shrink and age. Were that the country’s only problem, it could be more easily managed. Unfortunately, Russia is beset by a myriad of problems, each requiring signifi cant resources to address. A prolonged, severe social and economic crisis could increase the infl uence of political groups hostile to Western interests, such as President Vladimir Putin’s coterie of advisers from the former KGB:• The worldwide growth in per capita income will be felt in Russia—but 

the spread between winners and losers will be pronounced, further exacerbating diffi culties in forging a shared view about Russia’s political and economic future. 

The country’s leadership, especially the military, is likely to see the country as exhibiting vulnerabilities that other states—both neighboring and distant—will seek to exploit. The demographic imbalance with China is one example, but the general perception of weakness could also foster challenges to Russia on its southern rim:• The weakness of Russia’s current and likely future conventional forces 

has already driven military doctrine toward reliance on nuclear weapons to solve a broader range of military problems. 

• In any event, Russian concern over Chinese migrants in the Russian Far 

East could lead to tense relations between these two large powers over the long run, increasing instability in Asia. 

Meanwhile, the inability of the Russian state to ensure public health, control infectious disease, or fund basic infrastructure both ensures continued weakening and shrinking of the population and presents clear and present dangers to populations outside of Russia.

The productivity and global standing of China’s ecin part because of the large resources required to ddemographic challenges. China is struggling fi scally to keep up the social insupport its large, growing, increasingly urban popuit will be fi scally constrained by the enormous cosits state enterprises and failing banking sectors: • According to the IMF, China’s overall budgetar

projected to be 3.6 percent of GDP, up from 1.6 

Moreover, in anticipation of its own aging crisis in Chinese leaders have been actively formulating pocountry’s social safety net and transition the countretirement system to a partially funded model. The aging challenges will be even more diffi cult fo

tackle, in part because they surface issues that are the Chinese experience. Moreover, China does not mechanisms—sophisticated tax structures, deep caoped pension and health-care systems—that devel

dealing with aging issues.That said, should China get over this daunting fi scthe policies it is proposing to overhaul its social sawill serve to deepen its capital markets and reduce rigidities—policies that are benefi cial for US inves
90

• Our October 2000 conference, “Demographic Trends: The World’s Long-Term Economic, Poli

Landscape,” engaged 14 experts on a variety of issues. 

• Participants were asked to give a short presentation and then discuss specifi c topics. 

• Several times during the conference, participants in small groups discussed in more detail the i

trends on regional or topical issues of interest to the United States. 
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• At the conference we developed three scenarios of what the world might look like in 50 years 

demographic trends:

– Fertility Drives the Trends.– Orderly Progress.

– What Can Go Wrong Will Go Wrong.

• In the Fertility Drives the Trends scenario:

– Increased migration in Europe and Japan slows but does not reverse the pattern of aging in – The correlation between GDP per capita and total fertility rates is high.

• In the Orderly Progress scenario:

– The world is depopulating.– The population of the region that served as the locus for most 20th-century history—Europ

Russia—shrinks dramatically in relative terms.
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Tapping Into Prominent Expertise: Conference Highlights Fertility Drives the TrendsThis scenario uses a model to project the world’s future population, with 

a strong focus on the impact of fertility. The International World Futures Modeling System goes beyond traditional models of population projections that the UN and others use because it incorporates issues like migration rates, HIV/AIDS rates, and economic growth rates, in addition to TFR and life expectancy projections. The model yielded some interesting results:• By 2050 the world’s population could be as low as about 7.3 billion 

people or as high as about 10.7 billion. AIDS and fertility are the most important factors in determining the lowest population scenario, and life expectancy and fertility are the most important factors in projecting the highest population fi gures. 

• Increasing migration in countries in Europe and Japan, for example, 

would slow but not reverse the pattern of aging in those countries. The slower rates would be because migrants generally have higher fertility rates than host populations.

• Economic growth can have an effect on fertility, but by itself it is not 

a critical factor. However, the correlation between GDP per capita and TFR is very high. 

• Over the last 40 years there has been a reduction of two births per 

woman; this is a uniform shift of 0.05 births per woman per year. Historically, the median scenarios have been wrong because they did not take into account this systemic shift. 

Orderly ProgressThis is a scenario where the world reaches a populpermanently declines under noncatastrophic conditwo most important issues are the health explosion decline. The health explosion is a given and is a poso more emphasis is placed on the action and play decline. The scenario follows.This is a future depopulating world: • Using inputs from the UN World Population’s l

shows life expectancy, to 2050, increasing abou

• It posits a total fertility rate change from 2.6 bir

births per woman per lifetime. There will be sub1.4 births per woman in more developed nationdeveloped regions. 

There will be a huge change in the distribution of • Developed countries as a whole will drop from 

population in 1950, to 21 percent now, to 14 peStates pushes that rate up because it is the largeto remain at the top of the population list. In 19Russia, represented 22 percent of the world’s po

13 percent, and by 2050 it will be 7.5 percent. J3.2 percent of the world’s population in 1950, t

to 1.2 percent in 2050. 

• The very least developed countries will go from 

world’s population in the 1950s, to 10 percent tin 2050. 
94

• Orderly Progress (continued)

– The median age in developing countries, which increased only two years in the last half ce

by 20 years in the next half century.

– There is the possibility for a large economic divergence between old rich countries and old 

• In the What Can Go Wrong Will Go Wrong scenario: 

– Democratization without institutional reform and the presence of a large middle class lead 

instability.

– There is the possibility that breakdowns occur in bigger, developed, urban places where the 

may not be able to intervene. 
95

Orderly Progress (continued) There will be an unprecedented aging of the world’s population:• Over the last half century, the median age in LDCs has gone up two 

years, and it will go up by 20 years over the next half century. 

• Even populations in the less developed world will be older than any 

national population is today. In some countries, such as Angola, the Democratic Republic of the Congo, and Ethiopia, the median age will be, at the very least, as old as the United States was in 1985. 

The youth bulge will no longer be a concern because global populations will be much older.Aging could go either way. It could translate into a more informed, cautious, and level-headed approach to international disagreements. It could, however, lead to sclerotic and miscalculating decisionmaking like we have seen in Japan. There are economic implications of aging in areas such as savings rates, investment rates, and capital transference in either case. There is the possibility for a large economic divergence between old rich countries and old poor countries. Historically, elderly countries have achieved a mature level of economic development before they got old, but, starting with China, countries now will get old before they get rich. It is diffi cult to predict the effects of this. It will depend mainly on the pace of medical innovation and cost structures and on pension arrangements. Even if the fertility decline slows, we could see this scenario: • We do not know how low fertility can go, although some convincingly 

argue that we are close to the bottom of fertility declines. This is because, biologically, humans have an impulse to nurture, leading us to have more children. 

• Taking that argument to its logical conclusion, however, the majority of 

women only need to have one child, which is zero fertility. 

What Can Go Wrong Will Go WrongTimes will be rough, particularly over the next 10 cannot assume that democratization will lead to a ful world. Democracy will never be applied under so a democratizing world will almost certainly be scenario follows.Globalization means there could be breakdowns in urban places where the United States may not be a• The real immediate problem would involve a br

where moral intervention is not possible but whstrategic consequences. Pakistan is the best currbecause it seems to encompass the worst of eve

While the world’s middle class is growing in abso

terms, it is not growing at all and might even be deto greater instability: • A large middle class means stability and predic

mentary democracy comes easier after a sizable established, after the big questions of the state hafter the state has achieved literacy and working 

• The confl ict in Rwanda and the war between Ar

were both caused by democratic breakdowns. Tto an end after there was a military coup in one 

• Because Sudan had no developed institutions, i

power vacuum. 
96

• What Can Go Wrong Will Go Wrong (continued) 

– The “natives will get restless” and governments will respond by expanding their security se

imposing institutional reforms, which would be more diffi cult.

– Technology will empower both state and nonstate actors, making adversaries more diffi cul
97

There will continue to be a variety of mixed or hybrid regimes, with various elements of democracy and military regime that will only offi cially 

be called democratic for the sake of stability. Indonesia and Pakistan are current examples, as are Peru and Bulgaria where crime families share power.Wars will continue to be fought by unemployed young men: • With the absolute numbers of working-age people rising in the developing world, no government programs and institutions can keep up with 

demands, so there will be upheavals. 

• Businesses will not invest without public order, so governments will 

need bigger security services under the façade of democracy. 

• The Middle East will be particularly vulnerable because the region has 

a lethal mix of unemployed educated youth and its political systems are calcifi ed, but its societies are changing rapidly.

The world has not yet dealt with the collapse of the Ottoman Empire, which will continue to cause problems:• Iraq and other countries in the Middle East are artifi cial, and their ethnic 

groups are dynamic. This will create a more fractious society where ethnic identities are still very relevant.

US adversaries and attacks against the United States will surprise us more. Just as industrialization made Hitler and Stalin, the postindustrialization world empowers state and nonstate actors:• Instead of large despots the challenge will be the proliferation of smaller 

scale problems like terrorists and crime groups. 

• A future dictator will be an autocrat who has fi g

drugs and terrorists for an undeclared war againhow to lower its population’s expectations for s

Globalization has been successful, but the spread otechniques will contribute to confl ict because, whi

get better, expectations will also rise: • Global standards of living are rising, and world 

A study done in Norway by noted academics sh

world income distribution declining between 19that this has a lot to do with the increasing prosAs a result, in 30 years the income inequality gaing countries—China included—struggle to dea

aging along with other demographic challenges

• There will be large pools of angry people who a

they want through interest groups, which is a fewell-armed terrorists who will have better techndisenfranchised. 

• The number of people with access to informatio

go up from 2 percent to 10 percent of the worldthe world, however, will not have access to techto a basic telephone, and this discrepancy will a