Demography In Davos

As Claus notes on his own blog, demography actually hit the agenda at the Davos World Economic Forum this year. And as Alex on Afoe also points out some of “the world’s most important bloggers” were even invited to boot, though not, of course, Claus and I: next year perhaps :).

Nonetheless it is significant that the topic is now making it onto the agenda, and of course, where there is still life there is still hope.

Perhaps the most serious topic to get an airing was the state of play in the ex-USSR:

One of the dominant themes emerging from Davos this year is the power of demographics. Population isn't exactly destiny, but it's a huge determinant in how nations, economies, and companies fare. And the demographics often reveal trends that, on the surface at least, contradict the general appearance of a nation's prosperity.

Take the case of Russia. Under President Vladimir Putin, Russia is harnessing its oil and gas reserves to reclaim its status as a power with which to contend. But at a dinner presentation on Wednesday night, demographer Nicholas Eberstadt painted a starkly different picture. Russia's mortality rate is catastrophic, its birth rate abysmal. There will come a time in the not-too-distant future when Russia's depleted population will threaten the Kremlin's neo-imperialist designs.

Now you can find more material on the state of Russian demographics onsite here, and you can find an excellent review by none other than Nicholas Eberstadt himself here (Pdf).

But of course, while Russia's demographic plight may be unusual in its severity, as Claus indicates here, the issue affects virtually all the Eastern European transition societies to some degree or another, and whatever the level of catch up growth they may now be experiencing, at some point or another capacity issues regarding their labour supply are going to hit them, and hard.

Of course some societies are not even getting the benefit of external investment driven catch-up growth: Serbia for example. And with this in mind I found this article pretty revealing about some of the issues which are building up, and about how the young people simply shut up shop and leave:

Although vast parts of the East labored to rebuild their economies in the 1990s and join European life, Serbia did not. It pursued wars in parts of the former Yugoslavia — Croatia, Bosnia and Kosovo — that in turn led to Western sanctions and NATO airstrikes. Even in the eight years since the last war ended, commerce has not revived in cities like Leskovac, in southeastern Serbia. The heavy cost is still being tallied, in the young who flee and the others who turn gray and dispirited.

Babicko, a nearby village, is simply dying. Of 700 residents, only 4 are children of school age. Houses, whether of stone or mud brick, are falling into disrepair. When the time comes, "my daughter can try to sell it," said Ljuboslava Svetkovic, a pensioner living there. "If not, it will all collapse."

Leskovac's proud industrial history, in which textiles played a leading role, dates back 150 years. In the 1860s, the city was Serbia's second-largest, and by the start of the 20th century its wool and cloth exports brought the city renown. In 1990, Leskovac had a population of 69,000, with nearly 11,000 employed in its textile factories. Today, the industry has collapsed, with just 880 workers remaining. Pensioners and the unemployed outnumber those with jobs.

"This is the Balkans," said a forlorn Ljubisa Svetanovic, 55, who lives in Babicko. "God has said good night. Life stopped here a long time ago."