A large population is not always the road to economic success
May 29th, 2009 · Greg Atkinson · 8 Comments
Many economists appear to believe that if a nation’s population is growing then this is good for the economy as well, especially in developed countries. But in a world where resources will need to be shared amongst a growing number of affluent consumers I believe the opposite is often true.
A growing population means that a nation’s demand for food, water, shelter and energy will also increase. No major nation I am aware of can satisfy even these basic needs without imports. Even Australia which is blessed with natural resources needs to import energy. (e.g. oil)
On top of these basic needs as a country develops and grows there is an ever increasing demand for everything from consumer goods to rare metals for use in industry. If a nation cannot obtain these goods or cannot afford them, then economic growth is stunted.
In addition a growing population means that a nation becomes harder to govern especially if it is a nation where borders were imposed on it such as India, or where it has expanded it’s borders such as China. It becomes even more difficult to govern if a country has not only a large population but also a socially or ethnically diverse one that is spread over a large area.
If we look at the nations of the world with a population over 100 million we can see how the above mentioned factors come into play.
Nations of with Populations over 100 Million.
China. 1.33 billion.
India. 1.16 billion.
United States. 306 million.
Indonesia. 230 million.
Brazil. 191 million.
Pakistan. 166 million.
Bangladesh. 162 million.
Nigeria. 154 million.
Russia. 141 million.
Japan. 127 million.
Mexico. 109 million.
China and India I would suggest are going to have real problems over the next decades keeping their massive populations content. Simply governing and feeding these large masses of people is a challenge enough, but if you factor in the diverse nature of their populations then this becomes a recipe for civil unrest as occurs both in China and India today. If we were to look ahead 50 years is it possible that these two nations will exists in much the same form as they do now, or is it more likely that they will be split into smaller independent states?
I know many people will not agree with me, but China may already have seen it’s best days and the same may very well go for India. Many economists and market commentators believe it is inevitable that India and China will keep moving up the global economic rankings, but isn’t it also possible they may slip backwards?
The United States I suggest is an example of a nation that is at it’s limits. With 1 in 100 Americans behind bars as of 2008 I would say the nation already is experiencing civil unrest. The U.S. in 50 years will be a very different country and it is not in the realm of science fiction to suggest that it parts of the U.S. could break away during the 21st century.
Indonesia, Pakistan, Bangladesh and Nigeria I would say will continue to struggle this century. They are simply too large and diverse to govern as they exists today. They also face challenges in meeting just the basic needs of million of their citizens.
Brazil and Mexico have potential if the governments of these nations can get on top of issues such as crime, corruption and civil unrest. But they are perhaps already over-populated and this may hinder any major long term economic growth in the future.
That leaves us with Japan and Russia. These nations both have declining populations at present but if there are two nations with large populations that I feel we do well in the 21st century it is those two. Both are the targets of much scorn and condescension from the West but they may just have the last laugh. They did go to war with each other a few times last century and have some territorial issues still to work out, but their economies need each other. Russia has energy that Japan needs and Japan has products that Russians want.
So although a large population can help drive a nation’s economic growth the list above clearly shows it can often be a burden as well. Even in nations like the U.S. that seem to have managed quite well poverty still exists, and therefore it could be argued that the U.S even now is larger in terms of population that can be sustained over the longer term.
What I am suggesting may all seem a little too much for many people but let’s just have a look at some of what has happened in recent history. Germany was split into two after War War 2 and then reunited. The Soviet Union collapsed and numerous new nations were created as a result. China took over Hong Kong, Macau and tightened it’s grip on Tibet and the borders in central Europe have shifted so many times it is hard to keep track of them. Finally India and Pakistan as we know them today were only created only back in the 1940′s.
I wonder why many people seem to think that national borders in the 21st century will be any more stable than they were in the 20th century? It seems to me that with the spread of the internet, that motivating a separatist movement now would me much easier than say 50 years ago. If you scan the globe there are plenty of regions and people who seek to break away from the central government and form their own independent nation.
It also seems reasonable to me to assume that if nations with large populations see the gap between rich and poor grow larger then the forces for change will also grow. Especially if the “have nots” are grouped in regions or by ethnicity.
So the next time you read some long term global economic outlook ask yourself; is the forecaster simply assuming that all nations will exists as they do now in 20+ years time? Will China still be a communist nation and if not, will the transformation to a democracy proceed smoothly? Will India and Pakistan splinter along religious, ethic and/or tribal lines? Will the borders of the United States remain as they are today or is it possible that sections along say the Mexican border will split away, or that parts of Mexico actually become integrated into the U.S? How will the Middle East look in 20 or so years?
So many questions but so few answers…..