Capital or Encumbrance: How to Create an Economic Miracle with Russia's Ageing Population

Abstract

Russia entered the 21st Century with a complicated demographic legacy. The wars, revolutions, repressions and socio-economic shocks of the past century had cost the country tens of millions of lives. If we count all the unborn children and grandchildren, we find that, instead of the current 146 million (including Crimea), the population of the country today could easily be more than three hundred million. While at the beginning of the 20th century Russia had the fourth largest population in the world, equal to the United States, today we rank only ninth, after countries such as Nigeria and Bangladesh. By 2030, we will have been surpassed by Ethiopia, the Philippines and the Congo, but the United States will still remain in the top three. Globally, we are already quite small in number — less than 2% of the world’s population, accounting for less than 2% of the world’s GDP, and representing less than 2% of any market.“Demography is destiny”, said Auguste Comte, the father of modern sociology, back in the 19th century. Many economists note that one of the key engines of the global economy in the second half of the 20th century was population growth. Moreover, it is extremely difficult to ensure economic growth without increases in “demographic capital”. What fate awaits Russia in view of such unambiguous predictions?