Global Aging and the Rise of the Developing World

No challenge will more thoroughly dominate the evolution of global finance, politics, and society during the next half–century than the fallout from the simultaneous aging of the industrial countries plus Russia and Eastern Europe and, after 2020, much of East Asia and Latin America as well. This tectonic upheaval will force the fundamental restructuring of developed–world social and trade policies and shift the locus of global dynamism to India, China and other emerging market countries.The effects of global aging are already upon us. They can be seen in the sputtering growth of Japan and Europe (brought on, in part, by the deterioration of sectors that cater for growing societies); Europe’s rising anxiety over immigration (and the realization that, without workers, much of the tax base will shift abroad); and the near–universal rise in deficit pressures (exemplified most starkly by Japan’s plummeting bond ratings). Yet the full force of global aging will not be felt until early in the next decade, after which it is likely to dominate the geopolitical landscape for the indefinite future. For business and political leaders, understanding these trends and anticipating their effects will be essential to containing their disruptive potential. The Geneva Papers on Risk and Insurance (2002) 27, 477–485. doi:10.1111/1468-0440.00186