As Australia grapples with planning the next five or 10-year horizon, it’s worth spending a few moments to think about the world Australia will find itself in by the year 2100.
It may be more than 80 years away, but that’s becoming an increasingly short horizon. In that space of time, once-powerful economies may fade while new ones might rise. World geopolitics will be entirely different and technology will have reshaped the economic landscape many times over in that period.
But the one thing we can be broadly confident of are long term population trends, so with the help of the United Nations’ Population Division, and barring any global pandemics or wars which obliterate huge chunks of humanity, here’s a look into how things are shaping up.
Australia’s population will rise from around 24 million now to about 33 million by 2050 and to 42 million by 2100. That might sound like a lot, but an extra 20 million of us over the next 85 years is a minor statistical error in global terms (although given recent trends we could be a world stand out with 85 Prime Ministers in as many years.)
What many people don’t seem to appreciate is that China’s population is at its virtual peak and is about to start shrinking. China will peak at around 1.415 billion people in 2030 and by 2050 there will be nearly 70 million fewer Chinese than at this peak. By 2100, there will be 372 million fewer Chinese than today and over 410 million less than the peak in 2030.
They are also aging faster than their workforce can keep up with, although on the plus side, there is still plenty of room for productivity growth in China. Their current GDP per capita is US$7,500, compared to nearly US$62,000 in Australia according to World Bank data.
Japan is forecast to have a steadily declining population. By 2050, it will have shrunk by 19 million people (that’s getting close to the current population of Australia), and by 2100 it will have shrunk by more than 43 million people. Those inflated real estate prices might be under pressure, which could do all sorts of things to the economy’s capital backing. They’re already reasonably productive, and with a rapidly aging population, it looks like the land of setting – not rising – sun for them.
Germany’s population is also in gradual decline. There will be roughly 5 million fewer Germans by 2050 and by 2100 there will be 17.5 million fewer Germans than today. All those empty beer halls! It’s little wonder the Germans are happy to accept large numbers of refugees – they have a highly productive economy but will have fewer people to keep it running.
India will take over from China as the world’s most populous nation within the next five years or so. By 2050, they will have added nearly 400 million more people. Their population is set to peak in 2070 at 1.75 billion (give or take an Australia or two) and decline to around 1.66 billion by 2100 – which is still some 355 million more than today.
India has massive potential for productivity growth with a current GDP per capita of only US$1,630 – which is 2.5 per cent of Australia’s. They have a western democratic system of government but seem to have adopted the least efficient aspects of western bureaucracy with few of the benefits. If they can resolve their governance failings and modernise their economy, India may well be a new world super power by 2100. If you have kids in primary school today, maybe getting them to learn the Hindi language is not a bad idea. At least they’ll be able to follow all those Bollywood movies.
Our northern neighbour, Indonesia, has 10 times Australia’s current population and this will rise by another 64 million by 2050. Their population will plateau from around 2060 and by 2100 will have decreased marginally from their 2065 peak to 313.6 million. Indonesia also has potential for productivity growth with a per capita GDP of only US$3,500, but it’s not clear yet what is going to lift their economy or how they are going to go about it.
Dear Old Blighty just keeps chugging along with its population steadily rising from today’s 64 million to just over 75 million by 2050 and reaching 82.37 million by 2100. By this time, there might be enough of them to field a decent rugby team. They’re a strong economy with per capita GDP of US$45,600, but this is highly concentrated in London. Any glitch in London’s world financial HQ status could spell all sorts of problems in the future.
The United States will add another 100 million people by around 2070. Representing a third of the world’s economy, it’s difficult to see how the USA will lose any of its economic muscle over time. With a GDP per capita of $54,630, they just need their economy to begin firing again and for US consumers to open their wallets to stimulate rapid economic recovery – not just in the US but countries that rely on it. A friend of mine, Dr Doug McTaggart, has always maintained that the health of the US consumer has a far-reaching impact on world economies and I believe him.
Russia will shrink by 15 million people by 2050, and by 2100 it will have shrunk by 26 million – equivalent to shrinking by a whole Australia today. But our Russian friends only let go of communism in relatively recent times and have much further to go in modernising their economy. They have abundant natural resources and with a per capita GDP of around US$13,000, it isn’t hard to imagine them still remaining an economic and military power by the turn of the next century.
The country that records the most astonishing growth over the period to 2100 is Nigeria. The forecasts are that the current population of 182 million will rise to over 398 million by 2050 – that’s more than double – and by 2100 will reach 753 million – which is almost double again and more than four times their current size.
Many of the African nations show enormous growth over this period but Nigeria is the stand out. They have low productivity (per capita GDP US$3,100) and often unstable systems of government. It’s difficult to see this being even a moderately prosperous future unless those Nigerian loan scams are actually making a lot more money than anyone thought.
So what does it all mean?
The only thing that’s certain is that the world economic order we know today is going to be vastly different in the future. Demography is going to play a significant part in that but, in reality, it’s impossible to predict much of anything beyond the likely population numbers.
Will countries like Nigeria follow the Chinese path to rising economic prosperity, or fall further into poverty? Who knows? There’s another metric in all this which is ageing and those countries with a younger demographic may well fare better than nations that find their relatively small working population struggling to support a much larger, dependent aged cohort. For nations like Japan, which is both shrinking and ageing and with no immediately obvious path to lift economic output, this isn’t a pretty scenario.
And Australia? I think Donald Horne summed it up nicely in 1964: “Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.”