Demographic dynamics, aging populations and Turkey

The Turkish Statistics Institute (TurkStat) published worldwide demographic projections for 2050 three weeks ago. Making projections for such a long period can be considered a perilous exercise, but let’s not forget that demographic trends -- which originate from long-lasting structural factors such as urbanization, modern life and health improvements -- are hardly irreversible. So, demographic dynamics have to be considered seriously as they are very influential in the long run regarding the stability of economic and social systems.

In order to underline the importance of the demographic dynamics, let me give an example from history. The explosion of the population in Europe during the early Middle Ages reinforced the feudalist system and prepared the ground for the Crusades with all their consequences. However, this explosion caused, at the beginning of the 14th century, severe famines that paved the way one generation later for the Black Plague that decimated one-third of the European population. So, this time the rapid decline of the population weakened the feudal system and opened the era of the Renaissance. According to demographic projections, by 2050 the distribution of the world population as well as the distribution of power will show quite a different picture than that of today. China will give up its first place to India, having a population of 1.3 billion against India’s 1.7 billion by then. Furthermore, China will have a very aged population compared to India, with a median age of 48 compared to 37 in the Southeast Asian nation. The United States will, however, increase its population from 300 to 400 million, which would be one of the highest increases, and its median age will increase slightly from 36 to 40. We might expect the US to keep its place as the most powerful nation in the world. How about Turkey and its region, including Europe? As you can observe from the table, the demographic trends are divergent and important upheavals have to be expected in the future. Let me start with our neighbors. Except for Greece, all of them will lose part of their population and the aging population problem will become a serious issue. The most dramatic case is Bulgaria -- a quarter of its population will be lost and the median age will reach 47. Ukraine, Romania, Russia and Poland will follow Bulgaria. Poland and Romania will have very aged populations, as will be the case for Russia and Ukraine, but to a lesser extent. Russia, rich in energy resources and thanks to its population size and technological development, can cope with the consequences of an aging population and can keep its pre-eminence as the most powerful country of the region. But the others, including a stagnating Greece with an aged population and without natural resources and technological abilities, will most probably be impoverished and will constitute an even larger burden for the European Union than they are today. The most striking future regarding the EU’s big four is Germany. Its population will decrease from 82 to 74 million and its median age will reach 49. France and the United Kingdom will almost equal Germany in population size and will suffer to a lesser extent from aging population problems. Nevertheless, Germany, thanks to its technological advances, has a chance to keep its welfare state. But German domination might end if France and the UK find a way to avoid a widening technological gap with Germany. As for Italy, with its declining and aging population, as well as being the most indebted country on the continent, it will probably become the biggest headache for the union. The picture in the Middle East is quiet different. Iran’s population will increase slightly while it will face a severe aging problem as its median age will increase to 47. Iran will be less populated than Turkey, far less populated than Egypt and will be caught by Iraq on this front. The demographic trend for Iraq is absolutely astonishing: Its population will grow by 155 percent, climbing from 32 million to 83 million, and it will be the youngest country in the region. The population increase in Egypt is also quite impressive, making it by far the most populous country in the region with 123 million. Iran can easily cope with the problem of an aging population thanks to its immense energy resources but this will probably require a regime change or a radical change in the policies of the current one. Egypt, given its poor human capital and natural resources, might crash under the burden of its explosive demographics. Iraq, on the other hand, is set to become an important regional power given its energy resources should it preserve its territorial integrity. Also, the rapid growth of the Iraqi gross domestic product (GDP) would be a great opportunity for Turkish exports, and thus for the growth potential of the Turkish economy. In this framework Turkey appears as a strong candidate to become the second important regional power after Russia given the size of its population (94.5 million) and having a relatively less-aged population (the median age will reach 40 by 2050) if it maintains its speedy economic growth.