When we’re talking about growth, demographics is a key factor and is probably the most reliable indicator (albeit incomplete) in forecasting the long term future. The productivity of a country is not determined by the size of its population but rather the size of its working age population. It is the people of working age who contributes the most to the output of the economy, not the seniors or the children.
We can already see this phenomena starting to take place, it is no coincidence that Europe and Japan’s slowdown in growth coincides with its stagnating or even diminishing population. A Government can do so much in sustaining economic growth but ultimately they are working with less and less people which makes it difficult.
Image taken from– A common age demographics of a developed nation, the decline in the number of young population indicates a decrease in the workforce and the overall population in the near future.
This phenomena does not occur without a cause, as countries develop, they will incur inflation and in the long run will become more expensive to live in. This causes many people to have less kids. Some may even choose to not marry at all which has become quite common in modern cultural values.
That being said, there are several countries and regions in this world that will have a burgeoning workforce in the next few decades. This provides them a solid base for development.
Note: China is a very special case, they are currently at the peak in their workforce numbers, unlike Japan and the other developed nations which are gradually declining naturally. However, their past one child policy can potentially be a huge blunder as they will experience drastic demographic changes in the next few decades.
Peaking in the next 10–30 years:
South East Asia Region
These are the countries that have the potential to be the next bull markets in the near future. Much has been said about the 21st century being Asia’s century and looking at the demographics, it’s really not hard to see why. The next decade or so, the countries in Asia (barring East Asia: Japan, South Korea and China) and several countries in South Africa region will have an optimal number in their workforce which would lead to greater productivity in their respective economies.
Will peak in the next 30–50 years:
West Africa Region
There is a strong case that after Asia develops, it will be Africa’s turn. Many countries especially in West Africa have overcome their turbulent past and is now looking forward to a bright future. Their population is rapidly increasing and its very possible that in the not so distant future, they too will enjoy rapid economic growth.
There are 2 types of countries and regions that i have exempted from this analysis. The first type of countries are countries that have a high turnover in immigration. These countries are usually English speaking and are the business and financial hubs in the world. This includes the USA, UK and Singapore. Demographic changes are almost unpredictable in these countries as people continuously migrate in or out. They already have a highly dynamic economy and looks likely to stay that way for a while.
The other type of countries i have omitted are countries that are still continuously mired in conflict and political uncertainties. These countries will have no clear pattern in their demographics until stability is achieved. This includes several Arab states and countries in Central Africa.