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The depopulation timebomb facing the West is about to explode

·7-min read
Population old ageing globe world
Population old ageing globe world

Elon Musk’s quest to make humanity a multi-planet species has a hitch.

The SpaceX boss hopes to have people landing on Mars within five years as part of his vision for a “futuristic Noah’s ark”. But Musk fears his plan to colonise the Red Planet will fail to take off if Earth cannot even sustain its own population.

“We should be much more worried about population collapse,” Musk warned in a series of tweets last week, calling the UN’s more sanguine projections “utter nonsense”.

“If there aren’t enough people for Earth, then there definitely won’t be enough for Mars.”

Once a problem far in the future, the population crisis is arriving earlier than expected after the Covid baby bust. Populations in countries including Japan are already in decline, while those in the likes of Spain, South Korea and China are set to halve by 2100.

But for some, including Sir David Attenborough, the big population bust should not be feared. The nature broadcaster has called for the global population to be brought under control in order to maintain living standards, calling humanity a “plague on Earth”.

What is certain is that many countries will be facing a population crisis this decade. It is an issue that is slowly gaining prominence and climbing up the political agenda.

“This is genuinely a timebomb,” says Tory MP Damian Green, former Work and Pensions Secretary and head of the All-Party Parliamentary Group for Longevity.

“We have taken some steps in governments over the years but nothing like enough. Increasing the pension age is a rational response to the fact that we all live longer…. [But] what do we do if we are going to live decades longer than before? How do we stop that becoming a burden?”

A shrinking, and most importantly ageing, population will present big economic challenges, from funding and manning stretched health services to readapting housing and coping with a smaller workforce to tax. Ageing populations risk draining resources as experts warn of a 100-year life cycle on the horizon.

While the same population forces are taking hold across the world, individual countries are at different stages. Japan and Russia are already suffering record declines while many African countries are enjoying rapid growth.

The UN expects the global population to peak around 2100, but other experts - and Musk - believe that is far too optimistic. One startling scenario predicts the top to be in 2064.

A projection from the University of Washington's Institute for Health Metrics and Evaluation (IHME) warned that 23 countries, including Japan, Spain, South Korea and Thailand, will see their populations more than halve by the end of the century. China is currently the most populated country in the world but its numbers are forecast to crash from a peak of 1.4bn to 732m in 2100.

In developed countries, longer life spans and falling fertility rates mean societies are ageing rapidly with many soon unable to maintain their populations as deaths outstrip births. Rising numbers of women in education and work, usage of contraception and often precarious financial health of younger generations have driven the sharp decline in fertility rates in recent decades.

In China, enforced lower births via the one-child policy between 1980 and 2015 means its population is now ageing rapidly. Analysts at Bank of America warn it could begin declining as soon as this year after a 12pc drop in births in 2021 came off the back of an 18pc plunge the previous year.

Britain escapes relatively lightly in the IHME projections, seeing its population rise slightly by 2100 after a peak in 2063. But it still faces the same challenges from a rapidly ageing population - a boy born in the UK in 2020 can expect to live until 87 years old, and a girl over 90.

The UK’s fertility rate has fallen to 1.6 births per woman, but remains above Spain’s at 1.2, Japan’s at 1.4 and Germany’s at 1.5.

Lord Willetts, former minister and president of the Resolution Foundation, says: “Compared with Italy, or Japan, or China, our adjustment is not as severe. Britain is up there, almost as good as America, in that our birth rate remains closer to 2.

“What we've got at the moment is a very severe fall in the birth rate, partly because of the pandemic. So, looking ahead, it looks as if in the long run [Britain is] moving down to a birth rate rather lower than we are familiar with.”

However, the Office for National Statistics warned last week that the UK’s natural population will begin falling as soon as 2025, meaning births are not keeping up with deaths. That is almost two decades sooner than previously thought, though immigration will prop up the population until 2058 before an overall decline begins.

The economics of the crisis poses huge challenges for governments. Without policy action, an older society sucks more money for health and social care spending and pension payments.

More retirees become a bigger burden on a relatively smaller workforce, meaning taxes may need to be pushed up further to maintain the same level of services. Britain also has less specialist and old age-friendly housing compared to other countries, such as the US and New Zealand.

In the UK, soaring health spending from ageing, rather than higher pension costs, will pose the biggest pressure on the public finances.

Total age-related spending will rise from 21pc of GDP in 2022-23, to 29pc in 2067-68, according to the Office for Budget Responsibility. In the late 2060s, spending on state pensions will be 7pc of GDP but spending on health will soar from today’s 8pc to 14pc while social care costs will rise from 1pc to 2pc.

Ben Zaranko, economist at the Institute for Fiscal Studies, says a declining population is not necessarily a problem for the economy but the ageing alongside it poses challenges.

“If you've got a smaller population, you have a smaller economy, but each individual might be just as prosperous. The problem is it’s coming alongside a change in the structure.”

He adds that this could mean a greater focus on GDP per capita as population declines mean productivity needs to pick up to maintain or grow the size of the economy.

“As economies get richer, each individual tends to have fewer children on average and so we shouldn't be decrying the fact that we're a more prosperous society. It is going to create challenges but a lot of the underlying causes here are things to celebrate.”

The Government has raised the state pension age and announced the new Health and Social Care Levy to alleviate growing pressures, but experts believe much more action will be needed.

Sir Steve Webb, former pensions minister and partner at consultants LCP, warns April’s National Insurance hike to pay for higher health and social care spending “will look like a drop in the ocean compared to the tax bills to be faced by future generations”.

“There is a real danger that short-term political timetables mean that we are not preparing properly for an ageing population.”

In addition to higher health spending and older retirement ages, a mix of immigration, efforts to revive falling fertility rates and preventative health measures can cushion the blow of an ageing population.

“We're in the foothills of this climb,” says MP Green. “The Government has promised in the manifesto that we would have five extra years of healthy life by 2035. That's not that far away and we've not taken any steps to make that happen.”

Last year Scotland, which has the worst fertility rate in the UK, launched its first population strategy as it fights to de-age its workforce. It included better access to fertility treatment, financial incentives for young families to set up north of the border and policies to encourage Scots to extend their working lives.

Prof Sarah Harper, director of the Oxford Institute of Population, is more sanguine on the threat, however, saying medical advances and encouraging healthy lifestyles can push working lives into their 60s and 70s.

She says countries don’t need “lots of young people to drive economies”, arguing it is “going to be different” in the 21st century.

“A combination of healthy ageing, technology and freer work migration: they are the policy levers we can use to cope with the fact that it is perfectly natural for our populations to flatten and even decline across the 21st century.”

Regardless of whether people side with Musk’s woes of not producing enough humans to fill other planets or Attenborough’s environmental concerns, the population collapse is looming - and far faster than previously thought. As the issue gains political prominence, how governments respond will ultimately prove vital.

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