The world is at a turning point.
First, the good news: fertility rates have dropped and life expectancy has increased in most advanced economies thanks to a pleasant combination of better access to education, better employment prospects and phenomenal breakthroughs in medical technology — which means people today live much longer on average than any of their predecessors, and the global population will grow at a slower pace than it had been predicted two years back.
According to the latest estimates by the United Nations, overall life expectancy will increase from 64.2 years in 1990 to 77.1 years by 2050.
But contrast that with the fact that the average lifespan of a baby born in one of the least developed countries will be seven years shorter than one born in a developed country, because of high child mortality rates, uncontrolled violence and the impact of the HIV epidemic. Another corollary of the increased life expectancy will be a growing ageing population in Europe and North America, with the number of people aged 80 or older expected to triple from 143 million today to 426 million by 2050.
And then there’s India, whose population will surpass China’s by 2027. Despite being only a third the size of the United States, India will boast a population 10 times higher than the United States. The key challenges for the world to defuse a potential demographic time bomb, therefore, comprise the following:
1. Managing fiscal pressure: A growing number of countries will face unprecedented stress on their economic resources as too few young workers are left to support rapidly ageing populations. Nations providing public health care, pensions and social protection for older persons will have to find newer ways to shore up already dwindling state revenues.
2. Balancing jobs and poverty: The proportion of young people without jobs has grown globally, with countries struggling to find meaningful opportunities for the young. Both India and China have addressed this challenge somewhat successfully in the past decades. But the challenge will be stark in Africa — where though the rate of poverty has fallen significantly, a more rapid growth of population has meant that the total number of Africans living in poverty has actually gone up.
3. Raising the age of retirement: A bulk of jobs in developing countries are sophisticated and no longer require hard physical labour. Along with quality investments in education and health care, raising the age of retirement will hold the key to tackling the costs that come with an ageing population.
4. Managing the immigration tide: While the pattern of the global migrant population does pose a challenge for the demographic boom, encouraging skilled immigration is one (short-term) solution for developed countries to counter the global pattern of ageing.
The road ahead is challenging not only for developing and poorer countries, but also for developed nations with advanced economies. The former must grapple with an unprecedented population boom coupled with scantier resources, the latter with rapidly ageing populations.
