The impact of demographics the coming 15 years

With the impact of the crisis, the problematic impact of demographics on economies has subdued. But expect these problems to surge with a vengeance.

The problem is twicefold:
1. Ageing became expensive, very expensive. Belgium is betting on building out it’s medical care in order to create jobs. But they forgot that this is … not productive. Ageing is extremely unproductive.
In Brazil, the life expentancy is 71,71 years, in Belgium is is 79,07 years. This means that an average Belgium has to work 10% more productive in his working time just to cover his extra life expectancy, and this figure is seriously underestimate since the cost of a year ageing is much more expensive in Belgium than it is in Brazil.
2. Brazil has a healthy population of workers and future workers to build the economy and make the country rich before they get old. Belgium simply doesn’t have the base of workers to support the massive bulk of retiring people which are exiting now the job market.

Below the demographic pyramid of Belgium in 20007, the picture is clear:a huge baby boom bulk of 45-60 year old people retiring without any base to supportthem.

1. Belgium:

More interesting are these 2025 extrapolations for China, Russia and Brazil:

1. China

In 2025 China has a huge mass of retired persons (born before the 60s) with no support below (in the 60s the 1 child per family has been imposed).
We believe that China is over-hyped as the cornerstone of BRIC success and that demographics will soon stifle the country’s economy as the number of workers declines and the numbers of elderly swell.
Considering the size of its population, demographical problems become in China quickly desasters considering its sheer size of population.

2. Russia:

Let’s not even look at Russia. Russia has one of the worst demographic profiles of the developed and developing world, and is losing population at a devastating rate that bodes a bleak future for its economy.

3. Brazil

On a demographic basis it is clear that Brazil has the most potential for continued long-term growth. The country has a healthy population of workers and future workers to build the economy and make the country rich before they get old.
- 2009 population: 196,6 million
- 2025 estimated population: 228,8 million (16,4% growth)

This is why people get the impression of the “Brazilian beautiful women” saga.  Whereas most countries in the world, equally China and Russia have much more +40 year old women in the street, Brazil has nearly no +50y old women in the street, all women you’ll see are -40.

Brazil had in 2008 18,72 births / 1.000 poulation and 6,35 deaths/1.000 population and a growth rate of 1,228% (that is: 2,42 million extra Brazilians in 2010 !).
Belgium had in 2008 10,22 births /1.000 population and 10,38 deaths / 1.000 population and a growth rate of 0,106% (due to immigration; this is only 11.028 extra people in 2010 !)
China had in 2008 13,71 births / 1.000 population and 7,03 deaths / 1.000 population and a growth rate of 0,629% (that is: 8,36 million extra Chinese in 2010)