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Aging populations will cause severe discomfort in the United States and extreme pain in Japan and Europe by mid-century. But the same trends will devastate the frail economies of the Islamic world, and likely plunge many countries into social chaos.
By 2050, elderly dependents will comprise nearly a third of the population of some Muslim nations, notably Iran – converging on America’s dependency ratio at mid-century. But it is one thing to face such a problem with America’s per capita gross domestic product (GDP) of $40,000, and quite another to face it with Iran’s per capita GDP of $7,000 – especially given that Iran will stop exporting oil before the population crisis hits.
The industrial nations face the prospective failure of their pension systems. But what will happen to countries that have no pension system, where traditional society assumes the care of the aged and infirm? In these cases it is traditional society that will break down, horribly and irretrievably so. Below, I will review the relevant numbers.
In a recent essay, I argued that declining Muslim population growth rates give the Islamists just one generation in which to strike out for their goal of global theocracy (The demographics of radical Islam, August 23). Muslim birthrates are collapsing as literacy rises, that is, as the modern world intrudes upon traditional society. Islamic traditional society is so fragile that it crumbles as soon as women learn to read.
But the Islamists will not wait for traditional society to unravel. I grossly underestimated Iran’s new president Mahmud Ahmadinejad in a report on the Iranian elections (Iran: The living fossils’ vengeance, June 28).
In programs made public on August 15, Ahmadinejad revealed a response worthy of Adolf Hitler or Joseph Stalin to the inevitable unraveling of Iran’s traditional society. He proposes to reduce the number of villages from 66,000 to only 10,000, relocating 30 million Iranians. That is a preemptive response to the inevitable depopulation of rural Iran, in keeping with a totalitarian program for all aspects of Iranian society.
As Amir Taheri wrote in Arab News on August 20, “He [Ahmadinejad] wants the state to play a central role in all aspects of people’s lives and emphasizes the importance of central planning. The state would follow the citizens from birth to death, ensuring their health, education, well-being and leisure. It will guide them as to what to read and write and what ‘cultural products’ to consume so as not to be contaminated by Western ideas.”
Reengineering the shape of Iran’s population, the central plank of the new government’s domestic program, should be understood as the flip side of Iran’s nuclear coin. Aggressive relocation of Iranians and an aggressive foreign policy both constitute a response to the coming crisis.
Iran claims that it must develop nuclear power to replace diminishing oil exports. It seems clear that Iranian exports will fall sharply, perhaps to zero by 2020, according to Iranian estimates. But Iran’s motives for acquiring nuclear power are not only economic but strategic. Like Hitler and Stalin, Ahmadinejad looks to imperial expansion as a solution for economic crisis at home.
Iran wants effective control of Iraq through its ascendant Shi’ite majority, and ultimately control of the oil-rich regions of western Saudi Arabia, where Shi’ites form a majority. As Pepe Escobar reported from Tehran (Iran takes over Pipelineistan , Sep 10), Ahmadinejad wants to make Iran a regional power not only in production but in transmission, through a proposed oil pipeline through Iraq and Syria.
This may appear to be a desperate gamble, but conditions call for desperate gambles. Ahmadinejad is not a throwback, as I wrote with a dismissiveness that seems painful in hindsight. He has taken the measure of his country’s crisis, and determined to meet it head-on. Washington, from what I can tell, has no idea what sort of opponent it confronts. Iranian dissidents were supposed to push their country toward democratization, following the glasnost model of Soviet deterioration, and contagion from the new democracy in Iraq was supposed to hasten the process. Ahmadinejad’s ascendancy took Washington by complete surprise. Now there is nothing obvious the US can do to reduce Iran’s influence among Iraqi Shi’ites, or to prevent Iran from pursuing its nuclear ambitions.
The rising elderly dependent ratio, that is, the proportion of pensioners in the general population, has given rise to a genre of apocalyptic literature in the West: governments will raise taxes, debase the currency, cut pensions and flail about hopelessly as the cost rises of supporting the rising number of aged. In the US, pensioners now are 18% of the population, but will become 33% by 2050, according to the United Nations’ medium forecast. In other words, a full additional 15% of the population will require support from the remaining population.
Shifting a full 15% of the population from the ranks of the working to the ranks of the retired will place an uncomfortable burden on American taxpayers, to be sure. But the shift in the case of Muslim countries is much worse. Between 2005 and 2050, the shift from workers to pensioners will comprise 21% of Iranians, 19% of Turks and Indonesians, and 20% of Algerians. That is almost as bad as the German predicament, where the proportion of dependent elderly will rise from 28% in 2005 to 50% in 2050.
Each employed German worker will have to support a pensioner in 2050. A simple way to express the problem is that German productivity must rise by 0.8% per year between now and 2050 simply to maintain the same standard of living, for that is the rate of productivity growth that would allow a smaller number of German workers to produce the same amount of goods and services. That is not inconceivable; during the 1990s, German productivity grew at such levels. Productivity growth in the Arab world and Iran has been low or negative, and is not likely to improve.
As I observed in my June analysis of Iran’s presidential election, “From an economic standpoint, Iran is a changeling monster, an oil well attached to an iron lung, as it were, maintaining with subsidies a rural population that is no longer viable. Oil and natural gas earn $1,300 a year for each Iranian, roughly a fifth of per-capita GDP. The Islamic republic dispenses this wealth to keep alive a moribund economy. Government spending has risen by four-and-a-half times during the past four years, financed via the central bank’s printing press, pushing inflation up to 15% pa [per annum], while unemployment remains at 11%.”
Iran’s ultra-Islamist government has no hope of ameliorating the crisis through productivity growth. Instead it proposes totalitarian methods that will not reduce the pain, but only squelch the screams. Iran envisages a regional Shi’ite empire backed by nuclear weaponry. And Washington, from what I can tell, has not a clue as to what is happening.
Apart from Iran, the population dynamics described above will lead to more rather than fewer terrorist demonstrations. A school of thought represented by Daniel Pipes, for example, holds that “terrorism obstructs the quiet work of political Islamism,” as Pipes wrote on August 3 in the New York Sun. “In tranquil times, organizations like the Muslim Council of Britain and the Council on American-Islamic Relations effectively go about their business, promoting their agenda to make Islam dominant and imposing dhimmitude (whereby non-Muslims accept Islamic superiority and Muslim privilege). Westerners generally respond like slowly boiled frogs are supposed to, not noticing a thing.”
Here I think Pipes is wrong; the Islamists have to strike quickly and decisively, not only to advance their cause in the West but also to consolidate their power in home countries where conditions will become unstable before long.