Is Portugal Facing A “Shortage Of Japanese"?

“So, about the slow growth/debt connection: I’ve done a quick and dirty mini-RR for the period 1950-2007 ……focusing only on the G7……and if you look at it, you see that most of the apparent relationship is coming from Italy and Japan……And it’s quite clear from the history that both Italy and (especially) Japan ran up high debts as a consequence of their growth slowdowns, not the other way around.” – Paul Krugman, Reinhart-Rogoff, Continued


Despite so much intense debate about the ailment from which Portugal suffers, and the mountain of sacrifices currently being borne by the Portuguese people one fact has gone virtually unnoticed in amongst all the noise - for the first time, at least in the modern era, Portugal’s working age population has started to shrink. Demography and its possible impact on economic growth is a topic which has been largely ignored by practitioners of economic science in recent decades as population growth has by-and-large been on an upward trend. However, as we enter a new period in human history, one in which the upward trend has shifted towards stagnation or even in some cases towards long run decline, the economic and financial implications of this transformation can no longer be ignored. As Nobel economist Paul Krugman indicates in the above quote, some countries have large debt simply because they have low growth.

So what is the common thread that runs through these low-growth high-debt countries? Could it be decelerating labour force growth and eventual labour force contraction? The cases of Italy and Japan are well known. In the case of Portugal, it will be argued here, demographic trends can not only explain a significant part of the slow economic growth the country experienced during the first decade of this century, they can also help us understand the depth of the current recession. More important still, we need to think about the consequences of this continuing lose-lose dynamic for the country’s future in both the short and much longer term.

Economists didn’t always take the view that population dynamics were irrelevant to economic performance. The 1930s gave birth to a serious debate about the possible problem that would arise if many decades of strong population growth were followed by population stagnation and then decline, a debate which was provoked by the fact that birthrates in a number of countries fell below replacement level for the first time in human history during the economic depression. And among the names of those economists who took the problem seriously enough to think and write about it was none other than John Maynard Keynes.

“There are, indeed, several important social consequences already predictable as a result of a rise in population being changed into a decline. But my object this evening is to deal, in particular, with one outstanding economic consequence of this impending change; if, that is to say, I can, for a moment, persuade you sufficiently to depart from the established conventions of your mind as to accept the idea that the future will differ from the past.” J.M. Keynes, Eugen Rev. 1937 April; 29(1): 13–17.

While the phenomenon has arrived largely unnoticed Portugal’s total population has long been near to stationary.

As can be seen in the above chart, Portugal’s population has been struggling to find growth momentum since the mid 1980’s (the first time numbers actually dipped downwards) but the years 2010/2011 seem to mark a more fundamental turning point, since it was in that time interval that Portugal’s population started on a long, and possibly irreversible, path of decline. Having long had a total fertility rate of below 1.5 this was a more than predictable outcome, and one that should have been expected ever since the total fertility rate fell (and stayed) below the 2.1 replacement level in 1982.

As is well known, population change is comprised of two major components: natural growth and net migration. Natural growth, births minus deaths, became negative in 2007 and thereafter population growth has become exclusively dependent on having sufficient positive net migration. Up to 2010 this condition was satisfied given the continuing influx of immigrants into the country as can be seen in the chart below.

 

However, since the onset of the 2008 recession, not only have the immigration flows reversed completely, but emigration has started to increase again, thus reanimating a trend that has been constantly present in Portuguese history over decades, even centuries. This is perhaps the most critical factor driving the recent population decline. In fact the decline would have occurred much earlier had it not been for the return of thousands of refugees from the Portuguese colonies in the 1974-1981 period.

According to the European Commission's 2012 Ageing Report, projections for the Portuguese population during the period 2010 - 2060 anticipated that population would peak in 2034, but as we have seen, the latest data show the population unexpectedly reached its peak in 2010 (total population, previous chart), the year in which the population began to decrease (a similar phenomenon seems to have occurred in Spain in 2012, with again a reversal in migrant flows in an otherwise stagnant population being the trigger). This fact that this turnaround comes as a surprise is clearly the result over optimistic assumptions on the net migration front since the numbers for natural growth are well known and change little (although birth numbers are now dropping in many EU countries under the impact of the long recession). Clearly the unexpected factor here is the severity of the recession from which the country is suffering and the size of the exodus of young people who are leaving.

Just to highlight even more the speed with which all this is happening, in Japan, the interval between the beginning of the decline of the working age population and the beginning of total population decline was a full decade. In Portugal this interval was only two years.

Even more relevant than the decline in total population for the purpose of the present discussion is the decline in the working-age population. While the former gives us a good proxy for domestic consumption, it is the later which is important in terms of potential national output. All other things being equal a reduction in the working-age population means a reduction in output. Therefore, the most important detail to catch from the chart above is that the working-age population, defined as the population with ages ranging from 15-64, declined for the first time in Portugal between 2008 and 2009. As highlighted by both Daniel Gros and Paul Krugman if you want to compare economic growth performance as between countries with growing populations and those with declining ones the best indicator to use is undoubtedly GDP per Working Age Person (GDP/WAP).

In the Portuguese case if we take this ratio and compare it with both Real GDP growth and Working Age Population change (my calculations VM), we can get an impression of how variations in the Working Age Population affect the economic growth of a country. Surprisingly or otherwise, the data for Portugal viewed graphically not only confirms the existence of the “workforce effect” – the relationship seen between Real GDP and GDP/WAP - but also suggests that Portugal has already passed the point where this effect is beginning to have a negative impact on GDP growth.

As can be seen in the above chart, until 2008 the growth rate of Real GDP was always higher than the rate for GDP/WAP offering a strong suggestion that labour force growth was having a positive impact on GDP growth. It is noteworthy, however, that both in the period 1986 - 1991 and in the period 2003 - 2008, the growth rates of Real GDP and GDP/WAP almost overlapped. This phenomenon coincided with very low or zero rates of working age population growth and as such the “workforce effect” was mostly neutral. The first of these periods, 1986 - 1991, the stagnation in the workforce was the direct result of the increase in emigration that followed the entry of Portugal in the European Union. The second one coincides with the arrival of the turning point in long term WAP growth, as the size of the working age population irrevocably turns negative.

Indeed, during this early period of emigration towards the EU Portugal’s total population decreased, as shown in the chart Population by age group (above, blue line), but at the time, since the population in general was much younger, and many more new labour force entrants were arriving at working age, the growth rate of the workforce remained slightly positive. In other words, there were still enough Portuguese entering the labour market to replace those who were leaving it (either to retire or to seek a future abroad). In the second period, 2003 - 2008, the large exit of Portuguese nationals, about 700,000 between 1998 and 2008 according to research by the now Economy and Employment Minister Álvaro Santos Pereira, was to some extent offset by an inflow of immigrants, but these were only sufficient in number to maintain the workforce at a stationary level.

All this calm and stability disappeared, however, after 2008 when the growth rate of Working Age Population turned negative, i.e. the labour force began to decline (see graph below). Where the growth rates of Real GDP and GDP/WAP overlap we can surmise that working age population change is having no effect on real GDP growth. Subsequently, however, the growth rate of GDP/WAP becomes higher than the growth rate of Real GDP and thus the "workforce effect” starts to act as a drag on the economy steadily bringing the potential overall growth rate down. In other words, Portugal is now suffering from a "Shortage of Japanese" as Edward Hugh has called the phenomenon, after Paul Krugman originally coined the term to describe the underlying problem which has been afflicting the Japanese economy since the mid-1990s.

The fact that the three lines in the above chart happen to intersect at zero is perhaps just an unfortunate coincidence but is consequences are disastrous, since the downward trend that was already evident accelerated greatly after the onset of the recession. The resulting rise in unemployment not only caused a collapse in the immigration flow, it also led to a sharp increase in emigration. As a result workforce shrinkage intensified even further, as can be seen in the above chart by looking at the growing distance between the Real GDP and the GDP/WAP lines. That is, if the workforce had remained stationary the economy would be growing at similar rates to the GDP/WAP, i.e. above the current level as indeed happened in the period 2003 – 2008.

Naturally, the argument can be advanced here that the recession is a cyclical phenomenon, and this is surely true, there is an ongoing cycle, but the argument being used refers to long term trends – a reversal in direction (or change of sign) for inputs from the labour force component brings down the overall trend growth rate making booms weaker and recessions deeper, all other things being equal. This would seem to be a simple conclusion which stems from elementary growth accounting theory. Naturally, there are other factors which contribute to growth, like multi factor productivity, but again other things being equal you would need more of this to achieve the same growth rate as before under conditions of weakening in the labour force growth component.

Thus the argument is not that economic growth becomes impossible with a stagnant or slowly declining workforce, but simply that it becomes harder to achieve because it relies more on other factors, such as productivity and raising participation rates, but these change slowly over time, and more so in already developed countries. As such trend growth will surely steadily fall. This can be clearly seen in the following chart: while workforce growth was an important source of growth when Portugal was a developing country, its importance fell back as the workforce started to stagnate even as Portugal was approaching converge with other developed countries in terms of productivity. Other factors took over and increased their importance steadily as the economy started to converge with more advanced ones. Now that this catch up process seems to have come to a standstill as well the economy simply can’t growth, at least at rates considered normal. With a stagnant workforce, low growth or no growth is the new normal.

Following standard growth accounting procedures, during the 1970s workforce growth accounted for more than half of Portuguese economic growth (see chart above, my calculations VM), and this contribution had fallen to only 16% in the first decade of this century. However, since 2008 not only has this contribution reversed sign but also the magnitude of the negative effect has begun to increase rapidly. Such that, by 2011 the “workforce effect” could be considered to explain more than 29% of the GDP decline. This “negative drag” will continue, and the effect possibly become greater, as the working age population shrinks further. Had the workforce remained stationary we could surmise the 2010 recovery would have been more pronounced and the 2011 recession wouldn’t have been so deep. This is the principal reason why official growth forecasts have been being constantly revised to the downside, and this will continue to happen until the models the forecasters use adequately incorporate the effects of population decline on economic growth. Adding insult to injury, ignorance of the existence of such effects recently led Portugal’s Prime Minister Pedro Passos Coelho to suggested young unemployed Portuguese resort to emigration as an escape route from the crisis, advice thousands have now followed thus making a bad situation even worse.

 

Economic growth in Portugal appears to be on a long downward trend, a trend which will only be made worse by the onset of the decline in its working age population. Economic output is now at 2001 levels and thus we can now conclude that the last decade has been completely lost. More worryingly though, is that after such a bad start to this decade, it might not be unreasonable to conclude that this one is also in the process of being lost too.

At best the economy will stagnate in the years to come but the possibility is there that it will continue to regress – especially if nothing is done to stem the outflow of young educated people - and by 2019 it might even be back somewhere in the 1990’s. This is scenario simply cannot be excluded since, in addition to all the other problems the country faces, a situation that would be in any circumstance challenging is now being aggravated by one more variable whose contribution cannot be easily reversed in the short term – the decrease in the working age population. More than the fact in itself, it is the speed at which this is happening which is alarming, and the fact that policymakers appear unaware of the problem. In analyzing the low Portuguese economic growth issue the decrease in the country’s working age population can no longer be ignored! Or at least it is hoped that this will be one of the outcomes of this short report.

To return to where we started, Keynes concluded in his pioneering presentation that a stationary or slowly declining population could increase its standard of life while preserving the institutions society values most if, and only if, the process was managed with the necessary strength and wisdom. On the contrary, he argued, a rapid decline in population, of the kind that we are seeing in Portugal today, would almost inevitably result in a serious decline in living standards and a breakdown in highly valued social security mechanisms. The distinction Keynes drew some 80 years ago between rapid and managed rates of decline seems plausible, reasonable and highly relevant today. What we now need to see are urgent measures taken – initiated by the EU and the IMF - to counter the exodus which lies behind this dramatic decline which is occurring before our eyes, measures which at least try to decrease its speed, because once a process like this gains full velocity it will be very difficult to stop, and we have already seen it gather considerable traction. Ireland is a pointer and a great example to learn from, since it took that country more than a century to recover the population decline precipitated by the natural disaster which hit the country in the middle of the nineteenth century.

The Suitcase Mood - Does Ukraine Face Population Meltdown?

Suitcase mood is a Russian website with travel and tourism content. The term is also a popular expression widely used within Russian culture to describe the state of mind which grips a voyager on the brink of a journey. The mood is often associated with a ritual which involves the departing person sitting, sometimes accompanied by family or friends, in the vicinity (when not actually on top of) the packed suitcase, ostensibly to try to remember if there is anything they have forgotten to take and bid loved ones farewell. Sometimes, however,  the phrase can take on a different, and rather darker, meaning. It can be used to describe someone who is fed up with the status quo, has become footloose and decided they simply want out. "This will never change," might be the thought, "I'm leaving". In my mind's eye I even see the person having the thought seated on their suitcase adopting the posture of Rodin's thinker, turning over and over again whether they are doing the right thing, even while those around them vent their sadness in a bath of tears and alcohol. Or maybe I have just been watching too many Russian movies.

Naturally such a custom does not exist along Europe's Southern fringe, which doesn't mean it couldn't be invented since the young and educated are increasingly leaving much to the chagrin of those they leave behind.

But the "packing up and leaving" variant has now become the predominant one in another country suffering brain flight, one which has does have significant historical associations with traditional Russian culture: Ukraine. The suitcase mood is alive and well among a growing number of young Ukrainians, as journalist Vitaly Haidukevych discovered when he conducted an online survey on the subject via his facebook page,

"The suitcase mood is there. [...] Young, promising people have it. [...] Since they are young, they are leaving not for the sake of immediate earnings [...], but to grow roots for the future. [...] I assume that these people asked themselves whether it was possible to change the state of things in the country – and the answer was ‘no'. [...] Some are leaving for exactly the same reason others are reluctant to join [the anti-regime] protests – they care about themselves, their families and their future. [...] “what are those rapid movements for, you've got kids, think about them” – this is what those who've stayed think. And those who are leaving [...] do not want to wait for the tax authorities to come and take away their last pair of underpants. [...]"

Is Ukraine Headed For Imminent Population Meltdown?

Now, as I say, this "want out" phenomenon can now be found in many countries on Europe's periphery (here, here, here and here), but the Ukrainian case is an extreme one. So much so that the Ukrainians themselves have a word for those who have left the country in search of work and fortune elsewhere - zarobitchany. According to a 2011 report issued by the International Organization for Migration six and a half million Ukrainians, or 14.4 percent of the population, are now emigrants who have left their country (or rather they were at that point, since the 2013 number is certainly larger). Countries like Russia, the Czech Republic, Hungary, Poland, Italy, Portugal and Spain are among the most popular destination countries identified in the report.

In all cases of low fertility societies young population exodus is a problem, but in Ukraine's case it is well nigh lethal. The country has a little over 45.5 inhabitants and the population is shrinking by 330,000 per year. Besides the birth/death deficit emigration obviously contributes significantly to this sharp downward demographic trend (hat tip to Ukrainian blogger Veronica Khokhlova for most of the above).

Even without emigration the population would be falling, since the birth rate is around 1.3 (well short of the 2.1 replacement level) and far more die each year than are born, but the fact that so many also chose the exit route raises deep and preoccupying questions about the future of such countries.

The latest UN population forecasts put Ukraine's population at around 30 million by the end of this century, but this number is surely a highly optimistic one, in part because it assumes some sort of fertility rebound, but more importantly because it assumes that emigration won't melt the country down much more quickly and much sooner than that. In addition to the smaller population the shifting age structures mean that the proportions of Ukrainians over 65 and over 80 will rise continuously. According to latest estimates Ukraine's population in 2050 will look something like this.

Obviously people aren't leaving because the population is declining, but rather because the economy is not able to incapable of generating sufficient economic growth and sufficient jobs to encourage people to stay. There is a loss of confidence in the future of the country because the economic decadence becomes associated with degeneration in the political system.

Decadence certainly seems to have set in at the economic level. The economy fell by nearly 15% in 2009, recovered growth of 4-5% a year in 2010/11 and then fell back into recession in the second half of 2012 (in which year overall growth was effectively zero. The IMF forecast a further year of zero growth in 2013 followed by a return to 3% growth thereafter. This subsequent out come may be very optimistic, and the country will possibly suffer from weak growth from hereon in, before eventually turning negative.

In this context the feeling inevitably grows that there is no way to turn the situation round. This feeling feeds on itself, and the big question is whether it produces a kind of circularity whereby the loss of confidence and the loss of people also feeds back into the economic process making the lack of growth and employment even worse.

Low Fertility Trap?

Such seems to be the situation Ukraine finds itself in, and naturally the frustration can be seen everywhere. As one comment on Vitaly Haidukevych's Facebook thread put it, "It's futile to expect economic growth in Ukraine. Everyone is trying to escape from it as quickly as possible." Another said, more ironically, "One has to leave quietly, or else they'll soon introduce a tax on leaving." Others are more passionate and apparently even more determined:

"People ran, are running and will run. So many have left [Western Ukraine] for Italy, Portugal and the Czech Republic, and have not returned, and more will leave. It's just that [mostly people from] the provinces used to be leaving before, and now Kyiv is moving as well. People are taking their kids to study to Poland and some even further! It's a difficult situation in the EU now, but it's still livable, while in Yanukovych's Ukraine it's 100 times harder! Me, I came to the Czech Republic five days ago, sit here without a job, but I'm not going back home".

All of this puts me in mind of a fertility model developed by the Austrian demographer Wolfgang Lutz which he called the low fertility trap hypothesis. In developing this hypothesis his starting point was the assessment that "there is no good theory in the social sciences that would tell us whether fertility in low-fertility countries is likely to recover in the future, stay around its current level or continue to fall". He then goes on to advance "a clearly defined hypothesis which describes plausible self-reinforcing mechanisms that would result, if unchecked, in a continued decrease of the number of births in the countries affected". Claus Vistesen wrote up a description of the hypothesis on the Demography Matters blog (back in 2007) and I have some notes here.

Obviously the number of live births fluctuates according to the number of women in a given population who are of childbearing age, which can be more or less depending on the size of the cohorts involved. But in general terms a country with 1.3 or 1.4 fertility will have steadily less and less children as cohort size drops. This is basically population melt-down, and this critical state can be triggered by a number of processes, including social and economic ones. Some country's, as well as possibly being caught in fertility traps are also caught in liquidity ones, a connection which has not escaped the notice of Nobel economist Paul Krugman. While Krugman is surely not familiar with the fertility trap literature, he sees clearly that the low fertility Japan has experienced over decades has played an important part in the country getting stuck in a liquidity trap.

As he puts it: "Why is Japan in this [liquidity trap - EH) situation? A debt overhang from the 1980s bubble surely started the process; but surely it’s reasonable to suggest that the demography also contributes, since a declining working-age population depresses the demand for investment".

Lutz already suspected that their might well be an economic feedback mechanism that would work to drive the number of children born in a country ever further downwards towards lower and lower levels, but I think the experience of the crisis has made this pathway a little clearer, in that those low fertility countries whose economic trajectories fall off a stable growth path may find it ever more difficult to get back on one again. In street jargon they could fall into a "lose-lose" dynamic driven by low-living-standards low-growth expectations and high unemployment. Not only do such negative economic conditions discourage young people from forming families and having children (obvious I think), they can also have the effect that young people leave in search of a better future thus reducing the potential number of children who can be born in the future.

The ensuing acceleration in the rate of population ageing and the proportions of older people only makes the problem of sustaining public spending on pensions and health systems worse and worse, causing the fiscal burden on those who stay to grow and grow, a development which makes it more and more attractive  to leave and start up again elsewhere. And with each additional person who leaves there is another turn of the screw, and the costs of staying get higher, as do the advantages of not doing so. This is how melt down can happen.

Naturally there can be a political dimension to the disintegration, as the need to implement ever less popular policies (especially policies unpopular with older people, those who do vote) leads politicians to become more and more demagogic while delivering less and less. Naturally the democratic quality of a country's institutions starts to deteriorate under these circumstances, which only makes the young feel even more helpless and under-represented.

This outcome is now becoming plain in much of Southern Europe, but it is obviously even more evident in Ukraine, where the former Prime Minister Julia Tymoshenko is currently imprisoned, a decision which has just been roundly criticised by the European Court of Human Rights.


Can Countries Actually "Die"?

So where does all this lead. Well it leads me personally to ask the question whether it is not possible that some countries will actually die, in the sense of becoming totally unsustainable, and whether or not the international community doesn't need to start thinking about a country resolution mechanism somewhat along the lines of the one which has been so recently debated in Europe for dealing with failed banks.

That something like this is going to be needed I regard as being what John Locke would have termed a "self evident truth". As we know, in country after country each generation is getting smaller. While we can argue about exact timing, what this falling population means means is that GDP will eventually start to contract. This should make those ecologists who have long been arguing that the planet was over populated and that zero of even negative economic growth was desirable extremely happy. But what about the debt left behind by earlier generations, will that also contract? The Japan experience so far tends to suggest it won't, and herein lies the rub.

But this is only part of the problem, since the process of country decline, like most processes in the macro economic world, is non linear. That is to say critical moments or turning points will exist when suddenly things move a lot faster than expected. Hemmingway grasped the essence of this in his much quoted "bankruptcy comes slowly at first but then all of a sudden". As the economy falls back, and the burden of debt grows on the ever smaller numbers of young people expected to pay, the pressure on those young people to pack their bags and leave simply mounts and mounts, accelerating the process even further.

In fact populations dying out is nothing new in human history if we move beyond the most recent world delineated by nation states. In hunter gatherer times populations occupied increased or reduced proportions of the earth's surface as climate dictated. In more modern times, islands have been populated or become depopulated according to economic dynamics (think the Scottish coastline). More recently, it is clear the old East Germany would have become a country in need of "resolution" had it not sneaked in under the umbrella of the Federal Republic. Why people should find the idea of country failure so contentious I am not sure, perhaps we have just become accustomed not to have "hard" thoughts.

Applying the argument many apply to banks, unsustainable countries "deserve" to fail, don't they? Why should the US or German taxpayer have pay to keep them afloat? Naturally, including Spain in this group of countries that can only now salute Cesar as they prepare to die my seem extreme, but just give it time. 

I expect (should I say "predict" in the Popperian sense, since this argument IS empirical, and is surely falsifiable) the first countries to die to be in Eastern Europe, with the most likely candidates to get the ball rolling being Belarus, Ukraine and Serbia. But then gradually this phenomenon will spread along the EU periphery, from East to South. Latvia's own president said recently that if the net outflow of population was not stopped, within a decade the country's independence would not be sustainable. I don't think he was exaggerating.

So, as these countries "die", we (the rest of the international community) will have to decide what to do about them. A country "resolution" programme should be considered. The scale of the humanitarian tragedy will not be small.

Now, from time to time conventional economists do start to have a glimpse of what is really going on. This happened to Paul Krugman a month or so ago when he came up with the memorable phrase that part of Japan's economic problem was the result of a growing "shortage of Japanese". Now, as I am trying to suggest, this shortage is not simply a local, Japan specific, phenomenon, but forms part of a global pattern. Again, exact timing isn't clear, but sometime in the second half of this century global population will peak, and the shortage will steadily spread to take in all countries. To quote Krugman (in an earlier piece) again, at that point "to which planet will we all export"? Answers on a single piece of paper, in a plain white envelope, please.

But not all countries will experience the shortage (which is already being talked about in China in labour force terms) in the same way. Some countries, with competitive economies, healthier banking systems, younger populations, and better-quality institutions will gain the population which is being lost by the others. That is another of the reasons I say the process will not be linear. This is naked capitalism in the raw, sovereign against sovereign, with a winner take all structure.

So the modern economic system becomes something like the game musical chairs. When the music is playing everyone gets up to dance, but each time it stops there is one less chair (country) to fall back on. And so it goes on and on, through numerous iterations. Now where's my suitcase.

Postscript

I have established a dedicated Facebook page to campaign for the EU to take the issue of  emigration from countries on Europe's periphery more seriously, in particular by insisting member states measure the problem more adequately and having Eurostat incorporate population migrations as an indicator in the Macroeconomic Imbalance Procedure Scoreboard in just the same way current account balances are. If you agree with me that this is a significant problem that needs to be given more importance then please take the time to click "like" on the page. I realize it is a tiny initiative in the face of what could become a huge problem, but sometime great things from little seeds to grow.

Some notes on the Chechens and Chechen demography

Last Monday's Boston Marathon bombings gave some most unattractive publicity to the Russian autonomous republic of Chechnya and the Chechen people, on account of the ethnicity of the alleged perpetrators, Dzhokhar and Tamerlan Tsarnaev. One thing that came out in their life stories was they way in which they recapitulated the 20th century demographic history of the Chechens, able summarized in Asya Pereltsvaig's Geocurrents post.

During World War II, some Chechen separatists saw an opportunity to escape Russian domination by siding with the fast-approaching Nazis, who pushed into the North Caucasus in November 1942, attracted by the rich oil fields near Baku (see map on the left). Under that slight pretext, Stalin ordered virtually the entire Chechen population to be herded up and shipped by train to Kazakhstan, Kyrgyzstan, and Siberia on February 23, 1944. Up to 40% of the Chechen nation perished in the process, according to Stanford historian Norman M. Naimark. Houses of the exiled Chechens were offered to refugees from the war-ravaged western regions of USSR. But Stalin sought not only to move the Chechens away from the area of potential German conquest, but to destroy their ethnic identity. Chechen gravestones and cultural monuments were demolished; whole villages were deleted from maps and encyclopedias. In 1956, during Khrushchev’s de-Stalinization program, those Chechens who had not perished during their harsh 13-year exile were “rehabilitated” and permitted to return back to their homeland. Nonetheless, the survivors of the exile lost economic resources and civil rights. They have also continued to suffer from discrimination, both official and unofficial, and have endured years of discriminatory public discourse.

[. . .]

In the ensuing First Chechen War, the Russian air force and artillery hammered Chechen cities, particularly the capital of Grozny, which is now considered “the most destroyed city in the world”. Hundreds of thousands of Chechen refugees were driven out of Chechnya and into other parts of the Caucasus, particularly Ingushetia and Dagestan (where the younger of the Boston bombers, Dzhokhar Tsarnaev, attended school). Others went further afield, to the United States, Europe, or Central Asia, where Chechen communities remained since the exile ordered by Stalin. In the meantime, rebel forces in Chechnya retreated to the mountains, resorting to guerrilla warfare and terrorist attacks. Using tactics similar to those developed by the mujahideen in Afghanistan, rebels wore down the Russian troops; alcohol, drugs, and terror also took a heavy toll on the Russian military enterprise. Russian forces responded by fighting not only the armed rebels but also by inflicting destruction and rape on the peaceful Chechen population. As Russian casualties mounted, public opinion turned against the war. Russia agreed to a ceasefire in 1995, but since the political issues underlying the conflict were not resolved, violence soon resumed. After Dudayev was killed by two laser-guided missiles fired by a Russian aircraft, a new ceasefire agreement was brokered in 1996, calling for withdrawal of Russian forces and a political resolution in 2001.

[. . .]

Initially, the Second Chechen War went better for Moscow than did the First Chechen War. Russia launched massive and indiscriminate air strikes, forcing as many as 400,000 Chechens to flee. However, Moscow quickly became trapped again in an Afghan-style quagmire, while international condemnation mounted. Chechen president Maskhadov made several abortive attempts to cut a deal with the Russians, but found himself dismissed by Moscow and increasingly ignored by his own compatriots. He fled Grozny in 1999, as violence continued to escalate on both sides (eventually, Maskhadov was killed by Russian special forces in March 2005). He was replaced by a Chechen cleric Akhmad Kadyrov, who broke with the anti-Russian resistance movement, in part over its increasing religious radicalism, and began working with Russian authorities. After prolonged and bitter resistance, the Russians finally recaptured Grozny in early 2000, though the insurgency phase continued throughout the 2000s.

Born in a family of mixed ethnicity (Chechen father, Avar mother) in the eastern North Caucasus, moving at an earlier age to Kyrgyzstan an eventually to the United States, maintaining close connections to their homeland, the Tsarnaev brothers represent extremes in many ways. For starters, very few ethnic Chechens live in the United States--the number is approximately two hundred or so. (Most of the Chechens in the United States do live in the Boston area.) The Chechen diaspora, large and growing after the past century of genocides and wars, is concentrated in Eurasia: in Central Asia, particularly Kazakhstan but also Kyrgyzstan, where Chechens were deported in the Second World War and where substantial Chechen communities remain; in the remainder of the Russian Federation, where Chechens have travelled in major cities in the hope for a better life; in Turkey, where substantial Chechen migration dates to the 19th century expulsions of Muslims from the Russian North Caucasus; and, in western Europe. More notably, the Tsarnaev brothers stand out among the Chechen diaspora as the first Chechens to commit a terrorist act outside of Russia, the 1996 hijacking of a Russia-Turkey feerry aside. Olivier Roy (at The New Republic) and Anne Applebaum (at Slate) are probably right to classify the Tsarnaev brothers' alleged bombing as product of the alienation of first-generation immigrant children from their adopted homeland, not some sort of transnational network.

(I made two links posts on the subject Saturday, one of links to interesting blog posts and one of noteworthy news articles.)

Chechnya does stand out in the Russian Federation for any number of factors, of which--as described by Saidova and Zemlyanova the still-high Chechen fertility rate is a notable factor. Despite the terrible casualties of a decade of war, estimated to be in the hundreds of thousands, Chechnya has one of the highest fertility rates of any unit in the former Soviet Union.

In the last few years after the socioeconomic situation stabilized and population of the Chechen republic returned to peaceful life favorable development trends of demographic situation are being formed with positive factors of natural increase of population and increase in population number.

From the moment when collection of official demographic statistics was resumed in the republic in 2003 the following population dynamics is traced: as to January, 1 in 2004 number of population was 1121 thousands, and by January, 1 in 2009 it increased up to 9.5% and was 1238 thousands. Total fertility rate (TFR) in Chechen republic exceeds the replacement level. In 2008 it was 3.40 per woman at the age of 15- 49. For comparison, in the same year TFR in neighboring Republic of Dagestan was 1.95, in Republic of Ingushetia it was 1.96, in the whole South Federal District it was 1.67 and in the whole Russian Federation it was 1.49.

This does fit into a general trend, outlined by Judyth Twigg's December 2005 analysis, of Muslims in the Russian Federation evidencing higher fertility rates than non-Muslims. However, Valery Dzutsev's November 2010 Eurasia Daily Monitor analysis makes the point that there are good reasons to doubt the validity of the census data, particularly in the context of extremes.

Many experts have expressed doubts about sudden population increases in the North Caucasian republics over the past 10 years. For instance, Ingushetia’s population officially increased from just under 190,000 in 1990 to a whopping more than 455,000 in 2002 and 516,000 in 2010. Chechnya’s population, following two devastating wars that displaced hundreds of thousands people and virtually eliminated the large ethnic Russian minority in the republic, also increased from 1.1 million in the 1990 to an estimated nearly 1.3 million in 2010, according to the official statistics (www.gks.ru, accessed on November 14).

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The demographics of Chechnya are a politically sensitive topic, as the population of the republic was significantly reduced by the two wars and the accompanying destruction of its cities and villages in the 1990’s and again in the 2000’s. Because Ingushetia and Chechnya formed a single administrative entity until the disbandment of the USSR, Ingushetia’s population also had to be manipulated to cover up the real losses among the locals.

The prominent North Ossetian sociologist Aleksandr Dzadziev estimated that Chechnya lost at least 455,000 of its prewar population from 1989-2002, as a result of both migration and casualties. Just before the 2002 census, estimates of Chechnya’s population varied significantly, from 650,000 by the Russian statistical committee to 850,000 by the pro-Moscow Chechen government and Dzadziev’s own estimate of 820,000, all of them much lower than the officially announced results of the 2002 census –1.1 million people (http://www.kavkaz-uzel.ru/analyticstext/analytics/id/765541.html).

It is understandable why both Moscow and its puppet regime in Grozny were interested in exaggerating the population numbers for Chechnya in 2002. Moscow wanted to show there were not too many casualties and that the refugees had returned to Chechnya, while the local authorities wanted to receive more funds and thus needed a higher population to justify their demands. However, it is less clear as to why other North Caucasian republics overstated their populations in the 2002 census. Dagestan’s official population was put at 2.6 million, while according to the year-to-year estimates of the Russian statistical service and Dzadziev’s own estimates it should have been only about 2.2 million. The expected population of Ingushetia in 2002 was 430,000, but came out as 469,000. The expected population figure for Kabardino-Balkaria was about 780,000, but it jumped to over 900,000.

The official explanation for the rapidly increasing populations of the North Caucasian republics is that they have higher birthrates. This is especially applicable to Dagestan, Chechnya and Ingushetia. Still, it is doubtful that the people of Chechnya possess the highest fertility rate in Russia –one that is at the same level or exceeds Saudi Arabia’s and Iraq’s fertility rates.

Migration from Chechnya has occurred on a large scale owing to reasons of war and political oppression, but out-migration is a major theme of the North Caucasian Federal District generally, the only one of Russia's eight federal districts to have a non-Russian majority. (Two-thirds of the North Caucasian Federal District's population is non-Russian, a proportion that would rise if the largely Slavic Stavropol Krai was excluded.) The North Caucasus is a poor region, but young, and Russian government plans for the economic development of the North Caucasus seek to encourage migration to regions elsewhere in Russia.

Demographics of the North Caucasus Federal District differ from that of Russia in general. Now the demographic situation in the region is stable to the increase of birth and decrease of death rate, as well as mass migration to the region. The population of the region increased from 1990 to 2009 by 1.68 million people and is now 13.437 million people. In the year 2009 the natural increase of the population in the North Caucasus Federal District was 75.6 thousand people.
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The birth rate in the North Caucasus Federal District is the highest in the Russian Federation. Especially high is the birth rate in Chechnya (29 new-born children per 1000 residents) and Dagestan (19 new-born children per 1000 residents). That is why the percentage of the young people in the North Caucasus Federal District is higher than in other regions of the Federation. Especially high is the percentage of the youth in such subjects of the Federation as Chechnya (32.9%), Ingushetia (28.9%), and Dagestan (25.4%).

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The level of urbanization is rather low due to the traditional agricultural specialization of the region. The percentage of rural population in 2009 was 51.2%, in 2010 51.1% (in Russia this number is 26.9), that means that 4729.1 thousand people live in rural area. In the Republic of Dagestan, in the Republic of Ingushetia, and in the Republic of Karachay-Cherkessia the percentage of the rural population is 56 – 57%. In the Chechen Republic the figure is 64.7 percent. The infrastructure in the rural areas is rather poor and that prevents labour migration and determines low quality of life of the local residents.

The forces migration is another acute problem. Various ethnic and international conflicts force people to migrate to other regions of the Federation. In 2008 population loss due to migration formed 11.9 thousand people. In Dagestan this figure was 9.8 thousand people, in Kabardino-Balkaria 2.9 thousand, in North Ossetia 2.7 thousand, in Karachay-Cherkessia 1.9 thousand, and in the Chechen Republic 1 thousand people. Population increase due to migration was registered in Stavropol Territory.

The problem of migration is to be solved by the Federal Center together with local authorities. This will require a series of political, social, economic and cultural measures. The average annual labour migration from the region to the other regions of Russia should be on the level of 30 – 40 thousand people. This will stabilize the demographic situation in the region and lower unemployment level.

One third of the population of the North Caucasus Federal District is young people. This means that the Government should adopt a sufficient youth policy. Such a policy should focus on the development of youth organizations, trade union and labour market. The Federal Government together with local authorities should support young entrepreneurs and young families, support education and healthcare system, popularize sports and national traditions of the Caucasian people, and tolerance.

The Danish Immigration Service's 2011 report on Chechens in Russia outlines the various pressures on Chechens to migrate from their homeland, and the legal and other problems that they encounter elsewhere in the Russian Federation. Anti-Chechen discrimination and violence, often state-sponsored, is quite common. All this occurs in the context of what is described, in the 2007 paper of Vendina et al, as the "demographic diversification of the North Caucasus, as Russian and other Slavic populations decrease in number while the largely Muslim populations of nationalities indigenous to the North Caucasus grow.