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May 2020, Volume 26, Number 2

Virus, Population, Trade

The coronavirus that causes the respiratory disease Covid-19 led to shutdowns of economic activity in China, Europe, North America, and many developing countries. As shutdowns extended from March into April 2020, developing economies that rely on an influx of foreign investment experienced an economic shock.

Since the 2008-09 recession, many developing economies borrowed to expand their infrastructure and productive capacity, increasing their total public and private debt from 70 percent of their GDP in 2007 to 165 percent of their GDP in 2019. Tourist-dependent countries from Thailand to Turkey lost thousands of jobs and millions in revenue as tourists stayed away, while resource exporters such as Chile (copper) or Nigeria (oil) saw a major source of government revenue shrink; oil accounts for 85 percent of Nigeria’s exports and two-thirds of government revenues.

Caribbean islands are some of the places most dependent on tourism, and they were particularly hard hit in spring 2020. After recovering from hurricanes in 2017 and 2018, many hoped that the number of overnight visitors would top 30 million in 2020. However, hotel occupancy was less than 10 percent in April 2020.

Governments in many developing countries did not try to impose stay-at-home policies because most poor people crowded into slums need to work every day to eat. Argentina, where government debt is already 90 percent of GDP, has a new government that is seeking loans to reverse cuts to social programs.

Population. The world’s population of 7.8 million is rising unevenly as more people move to cities and the share of the population 65 and older increases. The global population is expected to reach eight billion in 2023, nine billion by 2037, and 10 billion by 2056.

The world’s population increases by 81 million a year, the population of Germany, down from a peak one-year increase of 93 million in 1988. China and India each have 1.4 billion people, but India’s population is growing while China is on the verge of shrinking.

The world will add 2.2 billion people by 2050, half in Africa and a third in Asia, while Europe is expected to shrink by almost 40 million, equivalent to the population of California. In 34 countries, the number of persons 65 and older exceeds the number of children under 15.

Fifty countries including Nigeria are expected to double their populations by 2050, while 20 countries including China, Germany and Japan are expected to have declining populations. Nigeria, which had about half as many people as the US in 2000, could have almost twice as many people as the US in 2050.

The world has 33 megacities, each with more than 10 million residents; there are expected to be 43 megacities by 2030.

The US had 3.8 million births in the year ending in July 2019, and 2.8 million deaths, for natural increase of one million. Net immigration of 600,000 increased the US population to 330 million. Deaths exceed births in several European countries, including Greece, Italy and Spain, and in almost half of the 3,142 US counties.

There are about 275 million international migrants, persons outside their country of birth a year or more, and they include 26 million refugees. International migration is expected to increase due to persisting demographic and economic differences at a time when revolutions in communications, transportation, and rights make it easier to cross borders and remain abroad.

Egypt’s population surpassed 100 million in February 2020, and could reach 130 million by 2030. Egyptian women have an average 3.5 children, increasing the country’s population by a million a year and leading to 700,000 workforce entrants a year. Egypt is mostly desert, so 95 percent of Egyptians live on four percent of the country’s land along the Nile River.

Trade. Advocates of globalization cheered a partial China-US agreement in January 2020 that commits China to buying more US farm commodities and establishes a forum to discuss trade issues, including Chinese government subsidies for state-owned firms and control over the economy. The US had a $320 billion trade deficit with China in 2019, and US tariffs on $360 billion worth of Chinese goods remain in place.

The US wants China to end the practice of requiring foreign firms that invest in China to share their technology with Chinese partners.

The China-US trade dispute, as well as disruptions to supply chains caused by the coronavirus, encouraged more US firms to invest in Southeast Asia rather than China. In Europe and the US, the sense that deep connections with other countries may unleash threats ranging from job-displacing trade to communicable disease may slow the push toward a more interconnected world.

World trade as a share of GDP rose rapidly between the 1970s and the 2008-09 recession as countries embraced freer trade and the global shipping industry became more efficient. One result was a surge in manufacturing in Asia, and the loss of manufacturing jobs in Europe and the US. The World Trade Organization was not prepared to deal with the rise of China and its unwillingness to adhere to trade rules.

Wealth. Knight Frank estimated 513,000 ultra-wealthy people in 2020, including 241,000 in the US; 62,000 in China; 23,000 in Germany; 19,000 in France; and 17,000 in the UK. Ultra-high net worth individuals (UHNWIs) have assets of $30 million or more. There are an estimated 50 million high-worth individuals with assets of $1 million or more.

Isabel dos Santos with $2 billion is considered to be Africa’s richest woman. The daughter of Angolan ex-president José Eduardo dos Santos, who was in power for 38 years, is accused of stealing at least half of her wealth from Angola. Angola exports diamonds and oil, and presidential decrees transferred Angola’s mineral exports to Isabel dos Santos and her husband and their dozens of companies around the world. US-based management and accounting firms reportedly facilitated the theft of Angolan government funds.

Trafficking. The sixth World Day of Prayer, Reflection and Action against Human Trafficking was held February 8, 2020, marking the Roman Catholic Church’s commitment to fight human trafficking. Pope Francis described trafficking as a “real plague that exploits the weakest,” and Rome-based Talitha Kum coordinates the anti-trafficking work of nuns in 92 countries. The ILO estimates that there are 25 million people in forced labor around the world.

Philippines. Journalist Jason DeParle lived with the Tita Comodas family near Manila in the 1980s, and followed three generates of Filipinos who worked abroad, in his book A Good Provider Is One Who Leaves: One Family and Migration in the 21st Century. Daughter Rosalie works as a nurse in the Middle East before getting a job at a Texas hospital that allowed her to bring her husband and three children to the US.

About 400,000 of the world's 1.6 million seafarers are Filipinos. They earn at least $1,000 a month on the world’s ships, 10 times more than they could earn at home.

DeParle, Jason. 2019. A Good Provider Is One Who Leaves: One Family and Migration in the 21st Century. Penguin.