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US Consumers: Leaving it to the Government Email Newsletter Business Opportunity - Helen Bairstow The Easiest way to do a Client Newsletter. Europe's Population Time Bomb - Part 2 How do I use ATC articles for my clients? In depth industry publication by ATC An ugly problem rears its ugly head again Email Marketing for Financial Advisers
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Europe's Population Time Bomb - Part 2

Click here to buy - A How To Book of SMSF's by Tony Negline

Lester Wills

Last time I started with the interesting notion that couples in the UK should stop having babies as a way of solving the Global Warming crisis. This was an idea put forward by a leading family planning authority writing in the prestigious British Medical Journal. Unlike Malthus, wrote his treatise back in the 1790s, Dr Guillebaud did not target the poor but rather his own social and economic group as the place to start. However, as everyone should be aware, the demographic situation is very different today compared to the 18th century.

I noted last time that the global birth rate has fallen from around 6 children per woman in 1970, to 2.7 today. As those who are familiar with my work will also understand, the magic figure for demographers is 2.1 births per couple. That, allowing for the fact that some girls die before they reach child-bearing age, is the figure at which a population replaces itself.

However, the last time that fertility was above replacement level in Europe was in the mid 1960s. But now, for the first time on record, birthrates in southern and eastern Europe have dropped below 1.3, well below the 1.5 which the United Nations has marked as the crisis point. If things continue the population there will be cut in half in just 45 years. In Italy, one recent survey put it at 1.2. Cities such as Milan and Bologna recorded less than 1, the lowest birthrates anywhere.

As I pointed out in my articles on the Japanese Population Time Bomb, things are as bleak in Japan. There the total fertility rate declined by nearly a third between 1975 and 2001, from 1.91 to 1.33. The average family size has remained the same, but there are fewer families. Half of Japanese women have not married by the age of 30, and 20% of them are not marrying ever.

But, and it is a very big but it is not just the developed world where birthrates are falling, it is plummeting in east Asia as well. Overall the fertility rate in Asia has fallen from 2.4 in 1970 to 1.5 today. Even China has problems with its rate down from 6.06 to 1.8 and declining. In Thailand it is 1.5. Singapore, Taiwan and Burma all have similar rates with the lowest rate being in South Korea where there are only 1.1 children being born per couple.

However, it is not just the fact that birth rates have fallen, as Dr Jane Falkingham, Professor of Demography and International Social Policy at the University of Southampton notes, it has taken South East Asia just 30 years to plummet to levels it took Europe 150 years to reach. Governments are finally reacting. Alarmed by this extremely low fertility, South Korea has slashed government spending on birth control. Singapore is now offering tax rebates to couples with more than two children. Japan is piling money into nurseries and childcare.

But of course, things are never quite as simple as they seem. As was noted in the article in the Independent newspaper, the New Demography does not mean that the population explosion may be about to become a population implosion. It is more subtle and gives more interesting pointers about how we are to live in the future.

There is still rapid population growth in many parts of the world. In places like Africa, birthrates are still very high. At their peak in the 1970s Kenya had a growth rate of 4.1%, which meant its population was doubling every 17 years. The rate is down in that country but in11 other African countries the growth rate is at or around 2.6% per year. As a result populations in Uganda, Burkina Faso and Congo will at least treble by 2050. Of course no discussion on birth rates would be complete without considering the world's largest democracy, India. It is set to leapfrog China as the world's most populous nation by 2050 when its population is expected to top 1,750,000,000 people. To put this in perspective, China will have approximately 1,400 million citizens, whilst the third biggest nation, the United States, will have around 420 million people.

If you thought this was mind bobbling, Europe is even crazier, but that will have to wait until next time.

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