October 2023, Volume 29, Number 4
Aging. The world’s population is aging as fertility declines and people live longer. Most countries have pay-as-you-go social support systems that rely on contributions from current workers to provide pensions and health care to retirees.
Birth rates often fall as countries get richer due to urbanization and women getting more education. Couples often choose quality over quantity by having fewer children and investing more in each child. The result can be a demographic dividend that persists for several decades, as the share of working-age residents increases while the share of children and the elderly remains low. Eventually, the share of elderly residents rises, creating more demands on government that are most easily dealt with in rich countries.
Remittances. Remittances to developing countries reached a record $647 billion in 2022, including over $100 billion to India and $60 billion to Mexico. Remittances are generally considered the payoff to migrating abroad to work and earn, but they can also prop up authoritarian and corrupt regimes in countries such as Venezuela, where a third of households depend on money sent from some of the 7.3 million people who have left the country.
Nicaragua, the Central Asian “stans,” and Cuba are examples of countries where popular discontent has been reduced by emigration and remittances. Some economists believe that remittances can become a substitute for needed reforms when they exceed 10 percent of a country’s GDP. In Tajikistan and Tonga, remittances are 45 percent of GDP.
Governance. Is liberal democracy, the belief in individual rights and freedoms for all people, a universal goal? Polarization in the US and other liberal democracies is bolstering an alternative, often systems led by authoritarian leaders who promise order, stability and progress at the expense of individual freedoms, as in China.
PM Lee Kuan Yew of Singapore argued against the 1990s consensus that the fall of the USSR marked the end of history with liberal democracy triumphant. He argued that Asian or Confucian values emphasized family and community more than individual rights dominated in many societies.
Many developing countries want the post WWII and US-dominated multilateral global order to be replaced by a system that recognizes alternative systems. The expanding the BRICS alliance does not preach the virtues of liberal democracy and, with members including almost half of the world’s people, could become a Chinese-dominated group opposed to the postwar system.
Africa, with 54 countries, has countries with the world’s highest fertility and political instability. The military seized power between 2021 and 2023 in six countries: Guinea, Mali, Burkina Faso, Niger, Chad, and Sudan, often justifying coups by saying there was a need to tackle Islamist militancy more forcefully. Poverty, corruption and high birth rates create the conditions for more instability and violence. There were 98 successful coups in Africa between 1952 and 2023.
Ghana and several other African countries are bankrupt; Ghana for the 17th time since 1957 turned to the IMF for a bailout. Developing countries owe over $200 billion, including the $63 trillion owed by Ghana, and are unable to repay their loans as interest rates rise. Some of the loans supported worthwhile projects that may generate funds to repay the loans, but others financed white elephants that were ill-conceived and not completed.
Western militaries depleted stockpiles of weapons and ammunition to supply Ukraine, and then began to replenish their stockpiles, pushing global military spending to a record $2.2 trillion in 2022, over two percent of global GDP of $101 trillion. Howitzers are mobile, long-barreled battlefield guns that fire shells and are the most widely used western weapons in Ukraine; experience shows that making battlefield repairs is critical to maintaining their effectiveness, and constant use of howitzers leads to failed electronics and gun barrels.