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Romania in 2030 and 2050: What demographics tells us?

Kenneth E. F. Watt, a professor at University of California Davis, published a book 42 years ago titled «The Titanic Effect: Planning for the unthinkable» (Sinauer Associates Inc.,U.S., 1974) in which he argued that the passengers on the famous ship, considered at the dawn of the XX^th century to be the safest in the world, made the mistake to think that it was unsinkable. So do many of those that hold in their hands the fate of a community or a country and think that inaction or bad action has no long term effect from one election cycle to another, to say nothing about the possibility of a collapse at a given moment. The impression is due to the fact that the decline of nations does not happen abruptly, but slowly. This is the reason why the problems of the future, if pessimistic, are not liked at all. The future shall be looked upon only with optimism or not at all! Nobody can know what will be in 10, 20 or 30 years, the politician would say.

Kenneth E. F. Watt, a professor at University of California Davis, published a the book 42 years ago titled «The Titanic Effect: Planning for the unthinkable» (Sinauer Associates Inc.,U.S., 1974) in which he argued that the passengers on the famous ship, considered at the dawn of the XX^th century to be the safest in the world, made the mistake to think that it was unsinkable. So do many of those that hold in their hands the fate of a community or a country: inaction or a bad action has no long term effect from one election cycle to another, to say nothing about the possibility of a collapse at a given moment. The impression is due to the fact that the decline of nations does not happen abruptly, but slowly. This is the reason why the problems of the future, if pessimistic, are not liked at all. The future shall be looked upon only with optimism or not at all! Nobody can know what will be in 10, 20 or 30 years, the politician would say. Important are the immediate problems. Maybe such a vision finds a certain justification: from the height of officialdom and privilege, life almost always looks rosy. Nevertheless, I will take on the risk, especially since under the auspices of the Romanian Academy, the highest national scientific forum, a strategy for Romania’s development over the next 20 years was put into public debate. This strategy was adopted after another one (for the medium and long term) was written in 2008. While, just four years before (in 2004), a “Romania’s strategy for sustainable development – horizon 2025” was written and launched under the solemn auspices of the Romanian Presidency. In a similar manner, several sectorial strategies have been adopted over time – in transport, agriculture, energy, education, and even culture. Then, as now, strategic objectives were set to significantly reduce the development gaps between Romania and the rest of European Union (EU). Maybe it would have been useful to conduct first a survey of all the strategies written over time and of the way in which they were implemented.

In this article, I will try to show how will Romania look like in 34 years from now, based on the forecast of UN Department of Economic and Social Affairs Population Division (horizon 2025)^[1] and of the International Monetary Fund (horizon 2030)^[2], in other words data on demographics and economy activity per capita.

The first photography, based on the UN forecast for 2050, indicates a EU dominated by 3 countries, with a population of over 70 million: France (78 million^[3]), Great Britain (75.3) and Germany (74.5). These countries are followed by Italy (56.5 million), Spain (44.8) and Poland (33.1). Next is a country of medium size, Netherlands, with a population between 17.6 and 21 million inhabitants.^[4] The rest of EU countries will be small sized, although with sensible differences within the category. In the upper segment there will be 3 countries with an approx. equal population: Romania, Belgium and Sweden. Thus, in the next 34 years, Romania will lose cca. 4 million inhabitants, from 19,426,167 (April 1, 2016) reaching 15,207,000 (2050). The drop will not be only quantitative, but also qualitative, with effect on the age structure of the population. The signs of this decrease in population will be felt over the next 10 years, when pensioners will represent 35% of the total population while the pension system pressure will be somewhat between 16 to 21% of GDP. In addition, it is sociologically proven that an aged population is less oriented towards novelty, innovation, or structural reforms. A population of Third Age does not produce champions! The population decline has consequences on land management and on the capacity to reduce development gaps from within. This favors a concentration of population towards more developed areas and a depopulation of the poorest areas. Another consequence would be the decline of Romania’s political importance at EU level, most visibly its representation in the European Parliament.

The second “photography”, based on IMF forecasts, goes until 2030. According to these forecasts, Romania will still be the EU’s second most poor country in 2030. Thus, the nominal GDP per capita will be 14,935 USD (compared to 8,905 USD today), which would place it then, as now, just ahead of Bulgaria (12,970 USD). The biggest problem is the growth of distance between Romania and other EU states – Czech Republic (29,619 USD compared to 17,257 USD today), Hungary (20,005 USD compared to 12,240 USD), and Poland (22,898 USD up from 12,495 USD today). Even Croatia, the last to join the EU, will keep its advance with a GDP per capita of 17,373 USD compared to its current 11,573 USD. What concerns the advanced economies, these will keep their advance even after 34 years: the GDP per capita of France will reach 49,941 USD (up from 37,675 USD today), of Germany 55,217 USD (up from 40,997 USD now), of Italy 37,524 USD (up from 29,867), of Spain 36,575 (from 25,875 today), that of Great Britain will be 55,730 USD (vs. 43,771 today). This evolution of prosperity will have demographic consequences – the poorer states in the East, including Romania, will continue to supply the demography of developed Europe. Under these circumstances, the losses suffered by the Eastern countries can be higher than forecasted. The image of the IMF forecast hides a different reality which is already present: Romania has already entered the so called medium income trap, a situation determined by the predominance of manufacturing and low value added assembly activities in the economy. Certainly, this data can be further supplemented. We can only ask ourselves what can be the impact of not having even one Romanian university in the current Top 500 world universities, especially since our neighboring countries have at least one institution of higher education in the Shanghai 2015 ranking (Liubliana University from Slovenia, Eotvos Lorand University from Hungary, Warsaw and Jagiellonian Universities – Poland, Carol University from Prague and even the State University from Belgrade). Or, what will be the impact of a 27.8% early school leave (in 2016, according to the National Institute of Statistics^[5])?

In the era of informational society, investors look for countries with a highly skilled population. The period of cheap labor advantage is about to come to an end. The map of foreign investments in the EU (2015) perfectly illustrates this reality: out of 5,083 foreign investments launched that year, most went not to low wage countries, but to countries with the highest share of population with high education: Great Britain (1,065 investments), Germany (946) and France (598)^[6].

As history shows, crisis always come from within. With good reason, French researcher Xavier Raufer talks about the “Byzantine syndrome” as being the most dangerous disease a country can have. On May 29, 1453, when Constantinople was under siege, only 7,000 byzantine soldiers were facing the army of sultan Mahomed II. The rest of the population was busy with the political-religious dispute on the sex of angels. Passion for accessory and ignoring reality lead to the collapse of an empire and an entire world. Two centuries later, Machiavelli masterfully depicted in his play “The Mandrake” how Florence became an easy pray for France due to corruption and chaos from within. In a remarkable book, American researcher Jared Diamond Mason (Collapse. How societies chose to fail or succeed, Viking Penguin, 2005), after making an inventory of societies in decline, starting from the disappearance of the Easter Island civilization until nowadays crisis from Rwanda and Haiti, shows that the disappearance of nations is a collective suicide that is due to wrong decisions. There are four such mistakes:

1. Incapacity to anticipate a problem before it manifests;
2. Incapacity to perceive a problem when it makes its presence felt;
3. Incapacity to solve a problem or to, at least, try to solve it when the problem is perceived;
4. Maintaining a social value system that is not adapted to realities of the present time.

Faced with this data, the question is “Can the future be saved?” The answer can be only a positive one. The future can still be saved, on condition of long term action. But is long term action even possible in a captive state, such as Romania is today? History showed that a human community cannot deal with the future as long as it does not deal with its present problems: forcing the false elites out of the system, introducing meritocracy, bringing corruption under control, depoliticizing public administration and simplifying administration.^[7] It is a question of state capture and societal capacity to change this situation.

FOOTNOTES:

1. UN Department of Economic and Social Affairs Population Division, World Population Prospects: The 2015 Revision, available at: https://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015.pdf ↑
2. IMF, Projected Real Per Capita GDP Values, 2015. ↑
3. Together with the departments and overseas territories. The population of metropolitan France would reach 74 million inhabitants (forecast of the National Institute for Demographic Studies – INED). ↑
4. The UN Population Division thinks that the population of Netherlands will be 17.6 million in 2050. Centraal Bureau voor de Statistiek (CBS), the Dutch Bureau of Statistics, thinks that this population threshold will be reached already in 2038. Netherlands Interdisciplinary Demographic Institute (NIDI) advances the number of 21.4 million inhabitants for the year 2050. ↑
5. “School attendance by the population of age, at the beginning of the school year 2015/2016 was 72.2%”, National Statistics Institute Press Release of June 1 – International Children’s Day, available at: http://www.insse.ro/cms/sites/default/files/com_presa/com_pdf/1iunie_ziua_copilului_2016.pdf ↑
6. Cabinet Conseil Ernst & Young – France, « France – Baromètre attractivité 2016 »: http://www.ey.com/FR/fr/Issues/Business-environment/ey-barometre-de-l-attractivite-france-2016↑
7. Romania suffers from an excess of organization. Currently, there are cca. 95,000 valid normative acts (only 1,958 of which have been issued before 1990)! ↑