Monday, July 13, 2009

Economist Article on Global Aging

Following on from the themes of my previous post on "The Folly of Our Times", The Economist has this excellent article on the real challenge for humanity this century- global aging. Here is an excerpt:

STOP thinking for a moment about deep recession, trillion-dollar rescue packages and mounting job losses. Instead, contemplate the prospect of slow growth and low productivity, rising public spending and labour shortages. These are the problems of ageing populations, and if they sound comparatively mild, think again. When the IMF earlier this month calculated the impact of the recent financial crisis, it found that the costs will indeed be huge: the fiscal balances of the G20 advanced countries are likely to deteriorate by eight percentage points of GDP in 2008-09. But the IMF also noted that in the longer term these costs will be dwarfed by age-related spending. Looking ahead to the period between now and 2050, it predicted that “for advanced countries, the fiscal burden of the crisis [will be] about 10% of the ageing-related costs” (see chart 1). The other 90% will be extra spending on pensions, health and long-term care.

The rich world’s population is ageing fast, and the poor world is only a few decades behind. According to the UN’s latest biennial population forecast, the median age for all countries is due to rise from 29 now to 38 by 2050. At present just under 11% of the world’s 6.9 billion people are over 60. Taking the UN’s central forecast, by 2050 that share will have risen to 22% (of a population of over 9 billion), and in the developed countries to 33% (see chart 2). To put it another way, in the rich world one person in three will be a pensioner; nearly one in ten will be over 80.

This is a slow-moving but relentless development that in time will have vast economic, social and political consequences. As yet, only a few countries with already-old populations are starting to notice the effects. But labour forces are now beginning to shrink and numbers of pensioners are starting to rise. By about 2020 ageing will be plain for all to see. And there is no escape: barring huge natural or man-made disasters, demographic changes are much more certain than other long-term predictions (for example, of climate change). Every one of the 2 billion people who will be over 60 in 2050 has already been born.

Some more food for thought on why global aging is a much more pressing problem than climate change: (1) the likelihood of the former is much, much higher than the latter; (2) the consequences of the former will be much, much more severe than the latter (in terms of causing disease and straining economies); and (3) there is a much sounder scientific basis for believing we could actually do something to mitigate the rate of aging than intentionally alter the global temperature.

Sadly, championing the cause of better health and prosperity for all via age retardation is not as fashionable as the expensive and unsound aspiration to play "climate gods". More people care about feeling like they are making the world a better place (and about being perceived as caring) than about actually making the world a better place. This impedes serious progress on the problems humanity faces this century.