In constructing the populyst Index™, we use multiple sources to arrive at a rating for two of the index’s three pillars: Innovation & Productivity and Society & Governance. However our Demographics rating is developed by populyst. The score ranges from -2 to +2.
Countries of the West and of the former Soviet bloc all rate at or below zero. As is well publicized, Japan, Germany and Russia are some of the major countries in this group that have the most challenging demographics, defined as a declining population and rising dependency ratio. See also America Without Immigration and Would Reaganomics Work Today?
Countries of the Middle East and North Africa have more dynamic population growth. With some exceptions, their demographics are strong and their populations are young. But their economies in general seem ill prepared to absorb the large increase in people seeking employment. See also MENA Economies: Trouble Ahead.
Finally, shown in the table are the most demographically dynamic countries of the world. They are mainly located in sub-Saharan Africa and the Indian subcontinent, with some in the Middle East and Latin America. Several countries in this group are well positioned to capture a demographic dividend. Others will find it more difficult. See also How Many People Will Live in Africa in 2050 and 2100? and The Relationship of Fertility and National Income.
The overall picture is clear. Nearly all countries face a demographic challenge, the rich because of an aging stagnant population, the poor because of a growing work force unable to find work. Former communist countries make up a category in itself. Their economies are weaker than those of the West and their demographics are generally worse.
What proactive measures can be taken to meet the challenge? Slow growing populations could have more children but this would temporarily exacerbate their dependency ratios by making these ratios rise even faster, given the increased number of young dependents. Immigration is not an entirely satisfactory solution when assimilation and the skill level of new entrants are considered. Finally automation can pick up several functions to alleviate the dearth of new workers, and new export markets can replace the softening domestic demand.
Fast growing populations can introduce reforms to stimulate their economies by combating corruption, improving the rule of law, and investing in infrastructure and education. China did it in the past few decades and India promises to do it now.
Recommended podcast: How Demographics Explain the World