Saturday, August 23, 2008

How Russia Differs From The Other BRIC

Johan Schück writes (in Swedish) about how Russia differs from the other three BRIC, Brazil, India and China. While all four of these countries have experienced a significant upswing during the latest decade, their demographic future differs significantly. While
India is expected to see a 36% increase between 2005 and 2025 in its working age population, Brazil is expected to see a 20% increase and China is expected too see a roughly constant working age population, Russia is expected to see a 20% decline in its working age population.

This will mean that it will be far more difficult for Russia to regain its status as a significant economic power. With its large nuclear arsenal it will always be a military superpower, but it will be not become an economic superpower. Combine the demographic implosion with the fact that the commodity price boom is unlikely to last forever, this means that Russia's relative importance could actually decline, in contrast to the likely increased importance of the other BRIC.

Note that this does not just apply to Russia. Just about every Eastern European country experienced a collapse in birth rates in the early 1990s, due to the temporary hardship created by the mismanaged transformation of communist economies to market economies. The decline in birth rates in the early 1990s translates into a collapse in the number of people in their late teens and early twenties in the coming years, meaning that there will in coming years be a significant decline in the working age population in coming years.

And there is really nothing that could be done (except immigration from even poorer parts of the world, but that is not likely to be popular) to prevent this decline. Not for the reason Schück advances, namely the alleged impossibility of raising birth rates. Indeed, in recent years Russia has seen a significant upswing in its birth rate, a "baby boom" if you will, with many other Eastern European countries also seeing similar upswings as general economic conditions have improved and many countries offering great increases in economic incentives for people to have babies. Instead, the reason why this won't help in the coming years is that a higher number of new babies now won't translate into a higher working age population until about 18 to 20 years from now. So while this will help after 2025, it won't help before that.


Anonymous Anonymous said...

Maybe the acronym needs changed to BRISK, with South Korea replacing Russia.

6:23 PM  
Blogger stefankarlsson said...

Actually, first of all, BRISK would mean replacing China (the erased C) with South Korea. Replacing South Korea with Russia would create BSKIC.

Secondly, as South Korea's birth rate is even lower than Russia's it makes no sense to include them for demographic reasons.

10:59 PM  

Post a Comment

<< Home