Wednesday 3 October 2012

Demographic decline will hurt Russia the most

Without coming out and saying it, Friedman thinks Russia is one of the countries in big trouble. While major powers such as Germany and Japan also have projected demographic decline,  Russia is not a highly industrialised first world economy. It doesn't have the money or the technology to transform itself into postindustrial, postmodern state. Specifically, it doesn't have the cash to automate labour intensive roles (including the armed forces) and extend the lives of its existing workforce through improved healthcare. 

Friedman sees automation and medical technology as Japan and Germany's solution to retaining great power status despite their projected demographic decline. The idea is they will replace workers with robots as well as helping older people keep working through medical advances.

The challenge for Russia is to gain the technological knowhow through foreign direct investment, state planning and espionage. In addition they need to secure their economic base in order to sustain such a transformation programme. However the intellectual capital laws enforced by the WTO act to prevent the spread of technology, to ensure that the rich stay ahead.

The other option Russia has is to reverse the population decline, Putin is well aware of this:
"In a global sense we are facing the risk of turning into an 'empty space' whose fate will not be decided by us," Putin said in an article published on his campaign website.
"If we manage to formulate and implement an effective complex people-saving strategy, Russia's population will go up to 154 million," he said.
By contrast, he said, if the authorities do nothing to combat the demographic crisis, the country's population would fall to 107 million by 2050.
However like most political plans, a 'people saving strategy' it doesn't measure up:
"These measures are not enough," said Anatoly Vishnevsky, director of the Moscow-based Demography Institute at the Higher School of Economics. "It's impossible to imagine how you could boost the population except through massive immigration," 
Michal Lee also believes Russia will be saved through immigration in this article:
In addition to formulating strong social policies and funding a knowledge and scientific revolution, the Russian leaders bring in millions of foreign workers over the next two decades to compensate for their rapid depopulation, creating dynamic new Russian border towns in the far east alongside China. The growing freedom and cosmopolitanism of the new Russia is nurtured by a society intent on modernising and growing. Russia matures into a leading global citizen.
But where do you get the people from? China is the logical choice but cannot be used for political reasons. China only reluctantly ceded control of the far east to Russia in the 19th century. Some argue China will eventually 'reconquer' this territory

In the 19th century, China reluctantly ceded control of the Far East and Siberia to Russia. During the past 50 years, however, Chinese territorial claims to the area have steadily increased. Chinese communist founder Mao Zedong and leader Deng Xiaoping both publicly asserted that the Russian cities of Vladivostok and Khabarovsk were Chinese. Some Chinese historians have claimed that the current China—Russia borders are unfair and that Russia 'stole' the Far East by force.
So suddenly Russia cozying up to it's former soviet republics makes sense. All the 'stans' in central asia and fellow slavs in eastern Europe are the targets for topping up Russia's declining manpower.

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