Asia’s Demographic Inequality

Demography isn’t destiny, so argues the Economist, (bold emphasis added)

INVESTORS are often lured to countries like India and Vietnam by their demographic promise—by their fast-growing population of workers and consumers. Likewise, investors in China often worry that it “will grow old before it grows rich”. Demographics are not destiny, but they are a noteworthy determinant of economic potential. Youngsters and retirees do not work, which harms growth directly. And because these dependants make a claim on a country’s income without adding to it, they also depress savings, thereby slowing the accumulation of capital and the growth of productivity. In its latest Asian Development Outlook, the Asian Development Bank calculates the contribution of Asia’s youthful demographics to its economic success over the past decade. The bank also projects the impact of a greying population on Asia’s growth from now until 2030.

I concur that demographics represent only part of destiny. The economic destiny of every nation depends on the extent where people are allowed to accumulate and use capital efficiently (via economic freedom and free trade).