The population problem and opportunity

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The world’s population is growing rapidly.  The bulk of this growth will occur in Frontier markets.  Population growth presents a unique set of challenges, but also provides attractive investment opportunities.

 Today, Europe and Japan are struggling with a diminishing population that is also aging.  Youth unemployment compounds this issue with a large retiring demographic that is not being replaced by young workers.  By 2050, 35% of Japan’s population will be over the age of 65, compare this with only 17% in 2000 [see here] .  Similarly, in Germany 36% of citizens will be over the age of 65 compared to 19% in 2005 [see here].   This compares to young countries like India where the population above 65 will rise from 4% today to 14% in 2050.  China, as a result of the one-child policy has more pressing concerns as it has yet to attain an acceptable level of development for its citizens, but sees its proportion of 65+ rising to 29% by 2050 from 7% today.

Over a multi-part series, we will be looking at how population growth is one of the most important factors to consider when investing in Frontier markets over the long term.  Specifically we will be looking at:

  • Which countries will have the highest population growth over the next 40 years?
  • Which of these countries will be able to cope with their growth?
  • Of these countries, which have the most attractive investment potential and why?

Please look for the first part of this series next week (August 13).   If there is something specific you would like us to study or analyze, let us know.

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