The demise of Russia's far east

The Demography.Matters team has on several occasions reported on the demographics of Russia and this time around we look at the differences between east and west of the large country. At first hand, it seems as if the demographic issues in Russia could be narrated in a general sense.

'For more than a decade, the country's population has steadily shrunk from 150 million in the early 1990s to just more than 140 million today. According to official statistics, unless the situation changes, the Russian population will drop to 80 million by 2050, leaving the country's Far East virtually vacant.'

However, particularly the remote far eastern regions are being abandoned in what seems to be a flow of migration towards the west which obviously is set to have important consequences should the trend not be reversed.

'Russian officials concede that the country's Far East risks becoming a no man's land. The population in the area has declined by 20 per cent in the last 15 years, despite a revival of the regional economy, Kamil Iskhakov, the presidential envoy to the Far East said on in mid-May. "People are leaving because they can not find acceptable living conditions," he told an 18 May meeting in Khabarovsk.

Improving the demographic situation is a "matter of survival" for the Koryak Autonomous District, said governor Oleg Kozhemyako. The region still faces high mortality rates and significant population outflows, he conceded on 10 May.'

And this should be seen in the light of a especially well endowed territory which, at least at a first glance, bodes well for opportunities.

'The Russian Far East comprises 13 regions, stretches over 40 per cent of Russia's territory, and is home to vast natural resources, including virtually all of the country's diamonds, two-thirds of its gold deposits, and major timber and fishery resources.

Yet despite these opportunities, in recent years many Russians have been moving back to the European part of the country from the remote regions of Siberia and the Far East. As such, Russia's expansionist trend of the past several centuries is being reversed, leaving hardly populated stretches in the Asian part of the country.'

As the article also reports, Kremlin is hard at work to reverse the demographics trends in Russia and specifically the Eastern regions, will Moscow come through?

Ireland's Debt Rating Under Threat?

by Edward Hugh

Hi everyone. I've been away for a time. Basically deep in thought, trying to sort out some long-standing puzzles. They still aren't properly sorted-out, but I am coming back to blogging even while I continue to struggle. As a warm-up issue this piece in the Financial Times caught my eye:

"The ageing Irish population is threatening to put severe pressure on the country's public finances and its AAA credit rating, Standard & Poor's, the rating agency, warned on Tuesday.....

S&P said Ireland needed to put into effect concerted policy and fiscal reforms to avoid a deterioration of its public finances stemming from rises in age-related spending. Without them, Ireland's credit rating could head into the "junk" or sub-investment grade in the next couple of decades."

Now I think we can leave aside the issue of how S&P have arrived at their specific assessment, or how realistic the scenario they were running actually is. I think what is news here is the fact that Ireland - which used to be Western Europe's fertility 'champ' - is now about to face the ageing consequences of a rapid fertility decline. Of course, in the short term, fiscal measures are available to bring this back to some sort of order, and it isn't the end of the world, or anything like that. But it is worth noticing that it is happening, and that Ireland used to be one of the typical 'anglo' fertility societies (with the US and the UK), characterised by high levels of teenage pregnancy, which many thought would provide an 'anchor' against upward displacement in average first birth age. I do think there are lessons for the US in what has happened in Ireland, and I do wish more people would start to draw them.

On another front the FT also has a piece today (subscription only unfortunately) which explains how Japanese politicians are desperately looking for ways of turning round their 'baby bust' situation. Apart from the fact that it is now a little late in the day for this (Japan went below replacement fertility in 1975, so its a bit like rushing to put the fire out after the building has burnt down), what strikes me is the way so many people still seem to find all this news.

Japan revisited

The Japanese economy has certainly been a source of mixed signals since the BOJ decided to end the ultra-loose monetary policy and thus claimed to have ridden themself with the ugly beast of deflation. This subsequently prompted powerful opinion makers such as The Economist and the FT to hail Japan as an awoken tiger ready to take on the rest of the world.

For an overview of the flurry at the time see this post by Edward as well as these two from Alpha.Sources. More generally you should also go see this aggregated blog of all Edward's posts on the Japanese economy. As you can see by following the links above the members of this team were somewhat sceptical about this sudden change of fortune for Japan and recently it seems as if the declining population and the subsequent demographic outlook for Japan has gotten due attention from some of the initial optimists (Economist article walled for non-subscribers).

(From the Economist)

"Early this month came news that Japan’s fertility rate (the average number of children a Japanese woman bears in her lifetime) fell last year to a record low of 1.25. It was, said the prime minister, Junichiro Koizumi, “an extremely tough figure”. Demographers had hoped that the fertility rate would bottom out at over 1.3, compared with a population replacement rate of 2.1, seen last in the early 1970s. Last year, too, the population saw its first decline in peacetime since records were kept. The government predicts that the Japanese population of nearly 128m will fall to just over 100m by the middle of the century. Nothing less than national survival, the Yomiuri Shimbun newspaper despairs, is at stake.

Some blame the demise of the traditional omiai, or match-maker: in the mid-1960s love matches overtook the number of arranged marriages for the first time, but now women want to get married later or not at all. Politicians, hitherto shy of sounding like wartime propagandists, are now urging women to breed. The government’s trade ministry even promotes the computer-dating industry. One of the biggest firms, Zwei, whose brochures are full of soft-focus idylls of white weddings, says its research shows most single people under 45 do not remain unmarried by choice. Rather, busy professionals simply haven’t found the right partner. Zwei and others are happy to help.

It is anyone’s guess when the fertility rate will turn up. For now, though, what matters is not so much a falling population but a change in its mix. Since the second world war, average life expectancy has jumped by 30 years, to 82. After the war, just 5% of Japan’s population were over 65. Today, the proportion of elderly, at 20%, is the highest in the world. By 2015, one in four of all Japanese, or 30m, will be over 65. Less remarked is a coming sharp decline in the number of younger workers: over the next decade, for instance, the number of Japanese in their 20s will fall by 3m, to 13m. It means that by 2030, there will be only two workers for every retired person, and three workers for every two retirees by mid-century. The Labour ministry estimates the workforce is shrinking by 0.7% each year."

Troublesome reading indeed.