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  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Dec 16, 2024
  • 4 min read

A demographic alarm bell is ringing in Japan, where the birthrate fell last year to its lowest point in recorded history. The sharp drop in births from the previous year marks the eighth consecutive year of decline. Former Prime Minister Fumio Kishida labeled this demographic crisis Japan’s greatest challenge. But this is more than just Japan’s story.


The world is aging, fast. As it does, global trade will shift in unexpected ways. Japan offers a preview of what much of the world will soon face, as economies everywhere start to see record-low birthrates. South Korea recently recorded the lowest birthrate globally, while Italy hasn’t seen an increase in births since 2008. And this is no longer just a challenge for wealthy, industrialized countries.


In Latin America and South Asia, the population ages 65 and older is quickly rising. Life expectancy is rising even as fewer people are being born. The result: Nearly 1 in 4 people worldwide will be 65 or older by century’s end. That shift could reshape the world in ways we’re only beginning to understand.


Countries are scrambling to adapt to the financial strain of aging populations.


Germany has raised the retirement age, a move echoed across Europe. Greece has introduced a controversial six-day workweek, while China, reversing its one-child policy, now urges families to have three children. Japan is turning to automation to fill the gaps left by retiring workers, and is bringing in more migrant workers.


Amid these shifts, Africa’s youthful population remains a demographic outlier, with over half of its population younger than 25 years old. As economies age, they may experience a decline in overall production and consumption. With fewer workers available, production is likely to move away from labor-intensive to more capital-intensive industries, making capital productivity crucial for sustaining output and growth.



The “consumption- retirement puzzle” adds uncertainty to consumption patterns. While traditional theories suggest consumption remains steady throughout life, in reality, some retirees may spend less due to insufficient savings, shifting their focus to essentials. In aging economies, consumption is moving toward goods and services that cater to an older population. Industrial equipment, transport, and work-related expenditures are giving way to increased spending on healthcare and other essentials for seniors.


In Japan, for example, demand for strollers and baby diapers has plummeted while demand for adult diapers has surged. Similar patterns are emerging globally. In China, spending on medical care and food is rising, while expenditures on transportation, household durables, and recreation are declining with age.


Simulations done by economists Sagiri Kitao and Tomoaki Yamada for Japan through 2050 suggest consumption will fall across the board as the population continues to age, with nondurable goods declining the slowest. The U.S. and Singapore are following a similar trajectory, reflecting a broader global realignment in consumption driven by demographic changes.


As populations age, changes in consumption and labor supply will reshape the structure of global trade, though the full impact isn’t yet understood and depends on the import content of consumption. Some studies hint that older economies might altogether trade less, focusing instead on more capital-intensive goods, while the aging workforce may change the skills used in producing traded commodities. Impacts on trade composition, however, remain an open question. Industrial and durable goods are among the top import and export categories globally.


We can expect these categories to shrink as work-related expenditures decline. Similarly, as birthrates fall and fewer children are born, the global market for toys, infant products, and sports equipment may contract. Such imports are already declining in countries with a higher average age, such as Japan. However, these trends are suggestive, as reduced imports could potentially be offset by increased domestic production.


Conversely, we can anticipate an increase in the trade of services, particularly in areas like healthcare and eldercare. Medical services, provided remotely or through medical tourism, will likely become a more significant component of global trade. Japan’s digital health industry is already growing fast. Its telemedicine market is expected to reach $404.5 million by 2025 (due to “shortages in medical specialists”), and broader healthcare IT, including wearable tech and online monitoring, is projected to hit $16 billion.


The changing demographics suggest a major transformation in global trade. And as the goods and services exchanged shift, there will be opportunities for countries to change their standing in global trade. For younger, less industrialized African economies, the challenge is to leverage their demographic advantage and pivot toward sectors that can thrive in a world less reliant on industrial goods.


Traditional paths to higher-income status, like export-driven industrialization, may lose their effectiveness in an aging global economy with diminishing demand for such products. Wealthier nations will need to delay retirements, rely on migrant labor, and invest in technology to sustain productivity.


Developing nations with aging populations face challenges without access to new technologies, potentially relying on older workers for longer. Addressing this demographic shift will deeply affect markets, production, and trade. It will also demand unprecedented global coordination to ensure that the world can produce and afford what it needs, with no one—and not a single country—left behind.


Source: Barrons

  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Aug 10, 2024
  • 1 min read

Weather events exacerbated by climate change will threaten many places in the coming years, and many of these locations are also projected to gain a lot of new inhabitants.


In the world’s largest cities, governments will have to do more to protect the millions of people in danger from a hot planet.


Growing Exposure


Countries with surging urban populations are also the most vulnerable to climate change.


Sources: Notre Dame Global Adaptation Initiative, UN-Habitat

Note: Color indicates climate vulnerability (red = highest). Countries without ND-GAIN index scores or negative projected urban population growth not shown


  • Drought has edged Mexico City close to “Day Zero,” when it would run out of water.

  • Phoenix has a director of heat response and mitigation whose department runs, among other things, a tree-planting program to provide shade.

  • Cairo’s $390 million Abu Rawash wastewater treatment plant is one of the world’s largest. Almost 60% of city adaptation funding goes to water and waste.

  • Jakarta is the fastest-sinking megacity in the world. If managers don’t stop groundwater withdrawals, the subsidence, coupled with sea level rise, will spell doom.

  • About 90% of domestic migrants to Niamey, the capital of Niger, cited climate change as their reason for moving in a 2021 United Nations survey.

  • India and Bangladesh are home to three of the world’s 10 most populous cities. Yet they receive only 6% of all urban financing.

  • Ten Philippine cities have a disaster insurance pool to help them cope with increasingly severe typhoons.


Source: Bloomberg

  • Writer: Ziggurat Realestatecorp
    Ziggurat Realestatecorp
  • Jun 25, 2024
  • 3 min read

The Philippines has to take advantage of the changing population structure in the next 25 years, when the working-age population will outnumber dependents, according to the World Bank (WB).


“The country has a 25-year window to harness the benefits of a changing population structure. So, the country will have a larger working-age population relative to dependents,” Toni Joe Lebbos, World Bank economist for human development, East Asia and the Pacific, said.


“If we invest today wisely in education, health, and jobs, this demographic shift can boost economic growth. This is a chance to stress that this opportunity won’t last forever and not taking action now would mean missing out on a lot of benefits,” he added.


The Philippines’ latest Human Capital Index (HCI) stood at 0.52, which means that a child born in 2020 can only achieve about 52% of their productive potential by the age of 18. This is lower than the average HCI of upper middle-income economies at 0.56.


The HCI measures the health, education, and training of individuals — indicators deemed crucial to a country’s economic growth.


“In our aging region, the Philippines’ human capital provides an important lifeline of services that are needed for growth. Yet the Philippines is only utilizing only half of its human capital investment,” Mr. Lebbos said.


According to the World Bank, key challenges affecting the Philippines’ human capital include high fertility, limited and unequal access to education and healthcare, poor learning outcomes, low-quality jobs and skills, persistent poverty and inequality, and vulnerability to global headwinds like climate change and pandemics. 


For the Philippines to realize its human capital potential, it must invest in the development of children below 10 years old, the World Bank said in its latest report.


“To ensure optimal start in life for every child as a foundation for boosting human capital, holistic services in the early years including maternal and child health, nutrition, early education and stimulation, development of foundational skills, and social protection in the first 10 years are paramount,” it said.


The World Bank said the Philippine government must also improve the delivery of social protection services.


Local government units (LGUs) have a key role in ensuring on-the-ground investments for human capital, it said. Disadvantaged LGUs, especially those farther from the capital region, are at risk of losing about 26 percentage points of human capital potential, it added.


“The LGUs that have lower indicators seem to be hindered by capacity and governance challenges that often lead to inequitable access to services, and unequal access to services,” Mr. Lebbos said.


Asked which policies can support the development of human capital, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan suggested a possible expansion of the government’s conditional cash transfer program to support out-of-school children.


During the forum, Mr. Balisacan called on lawmakers to approve the Academic Recovery & Accessible Learning Program, which mandates students to take refresher courses in the summer break and address the learning gap. It also backed the passage of the Enterprise-Based Education and Training Framework Act to fit workers’ skills to industry demands.


Meanwhile, the World Bank also expects the country to reach upper middle-income status by 2026, but its key human capital indicators remain below the average of such an income class.


“Whether the Philippines will reach a high-income economy and developed status will really depend on investment in human capital today,” Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand said during the forum.

The multilateral lender classifies the Philippines as a low middle-income economy, but the government is hoping it can gain upper middle-income status by next year. 


Upper middle-income economies have a gross national income per capita of $4,466 to $13,845, according to the World Bank.


© Copyright 2018 by Ziggurat Real Estate Corp. All Rights Reserved.

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