Russia's worsening demographic problems

In this post I wrote about Russia's declining economic competitiveness. (As an example, Russia has roughly the same GDP as the Netherlands, even though Russia has nearly 9 times the population.) The basis of that post was a report from the World Economic Forum.

Yesterday the World Bank released an extensive report on Russia's worsening demographic problems.

(A link to the report in PDF form can be found here.)

A combination of low fertility and high mortality is causing a dangerous decline in Russia's population. As the report says:

Russia’s population was 149 million in 1992 but declined by 6 million as of 2003 to 143 million. If current low fertility and high mortality trends persist, this figure is expected to decline by over 30 percent during the next 50 years, as all measures of demographic processes show that Russia will continue to undergo dramatic changes in its population dynamics in the coming decades. The average annual population growth during 1990-2003 was -0.3 percent, and continued high mortality and declines in fertility are expected to lead to further negative population growth (Figure 1.1).

Overall, it is estimated that the population of Russia would be 17 million higher than at present if age-specific mortality rates in Russia had followed the patterns experienced by European Union-15 countries (EU-15) since the mid-1960s (Andreev 2005). This figure is comparable to the country’s total lives lost in World War II (Andreev 2005).

A decline in population of 6 million in only nine years is astounding. Imagine if Russia had lost that population in a war. It would be devastation on an enormous scale. It is Russia's prospects for the future, though, that should concern us. The decline in Russia's population may have dire ramifications. The United Nations Population Division projects that Russia will lose approximately 18 million people between 2000 and 2025. Such a loss will have an impact on Russia's economy, social infrastructure, and Russia's ability to defend itself.

The low fertility and high mortality are causing population loss at both ends of the age scale. First, let's look the low fertility, and then, at factors for the high mortality.

Low Fertility

The report points out Russia's fertility rate has dropped below replacement levels.

Russia is among many Western countries with fertility rates below the replacement level of 2.1 children per woman of reproductive age (Figure 1.3). In the early 1960s, Russia’s total fertility rate stood at approximately 2.6. Its fertility rate dropped to about 2.2 in the late 1980s, fell below replacement in the early 1990s, and in 2000-2005, it was 1.1. Projections suggest that Russia’s total fertility rate will remain below replacement beyond 2025. The crude birth rate (live births per 1,000 population) decreased dramatically from 14.7 in 1989 to 8.7 in 2000 but increased slightly to 9.7 in 2002.

In addition, infant and child mortality rates are higher in Russia.

Although the infant mortality rate (an important indicator of quality of life in general and quality of medical assistance delivered to children under one year of age) in Russia has been declining (Figure 1.5), it remains higher than in any other G-8 country. Russia’s 2003 infant mortality rate, 12.4 deaths per 1,000 births, is still three times those of France, Germany, and Italy. Also, despite a slight decline since the mid-1990s, mortality rates for children under age five are also significantly higher in Russia than in the other G-8 countries.

High mortality

Russia is one of the few countries in the world where life expectancy is falling. In summary (emphasis mine),

Both the current low level of life expectancy and the recent declines were driven largely by increasing mortality among those of working age, with a singular rise in mortality at young adult ages, with the greatest contribution from cardiovascular diseases and injuries.
...
Currently, total life expectancy at birth in Russia lags behind that of Japan by as much as 16 years and the European Union average by 14 years. By 2002, life expectancy in Russia had fallen below 66 years, well below the 1965 peak. Russia is the first country in the history of modern nations to experience such a significant peacetime loss in life expectancy.

Factors for the high mortality include increasing rates of heart disease caused by alcohol abuse, high tobacco usage, increasingly sedentary lifestyles, and inadequate diet in poor areas. Drug abuse is also on the rise.

Since Russia is losing population at the lower end of the age scale, Russia is gaining a disproportionately high number of older persons in comparison to younger ones. This has significant ramifications for the future.

* Fewer workers - Russia is already at an economic disadvantage compared to Western nations, but as the base of available workers shrinks, the report says:

According to IMF projections (IMF 2004), a decrease in working-age population will reduce labor productivity and incentives for investment in human and physical capital, which will in turn reduce per capita GDP growth. Government budgets will be squeezed as tax revenues fall because of a decline in the size of the working-age population and an increase in the needs and demands of an aging population. As the elderly population rises, the overall rate of saving and investment in a society will decline as more resources need to go to pensions, health care, and long-term residential care.

In addition to labor supply, with unhealthy workers, labor productivity may become a problem.

* The destabilization of families - With the stresses caused by increasing hardships, and the fact women outlive men in Russia by a number of years, the impact on stable families, and the prospects for children born into Russian families, will be significant.

* Growing regional disparities - Poorer regions in Russia will be especially affected by worsening economic problems. In areas with fewer jobs, little money or resources, and aging people with little means, Russia may have to devote more funds for its social safety net, funds it may not have.

* National security risks - This is one that should worry us all. As the report says:

From a national security point of view, the demographic and health crisis in Russia will present many challenges (Twigg 2004): (a) the number of men around conscription age will plunge rapidly in the decades ahead; (b) a growing percentage of the military budget will have to be allocated for the provision of medical, nutritional, and substance abuse programs for draftees and soldiers that are deemed medically unfit for duty; (c) long-term economic growth will depend on large cohorts of healthy and skilled young and middle-aged adults; and (d) if its vast territory is depopulated, instability could grow and the country could become increasingly difficult to govern.

For a country facing increasing threats from radical Islam right on its doorsteps, the inability to field a healthy, functioning military is a troubling prospect. Also, an inability to govern portions of its territory could encourage lawlessness, which in turn could provide havens for criminals and terrorist. The security of Russia's nuclear weapons has long been a simmering concern.

There is so much more in the report than I can summarize here. The report expands on the implications I've mentioned here, and highlights some of the things Russia is trying to do to address these problems.

However, the trends are not good for Russia. I obviously have a special concern for Russia, since that country gave us our two precious children. I've made four trips to Russia, and I've seen with my own eyes the poverty there, and the bleakness that many face.

Russia has so many gifted people. Think of what Russia has achieved in the arts, in literature, in the sciences, in math, in engineering, in athletics. It is a painful thing to watch this great country erode.