Russia’s Peacetime Demographic Crisis: Dimensions, Causes, Implications

Foreword

ii Foreword T hisreportrepresentstheculminationofathree-yearresearchproject,commissionedbyThe National Bureau of Asian Research and led by Nicholas Eberstadt (American Enterprise Institute), to investigate Russia’s emerging political economy through the unique prism of that country’s demographic profile, and assess the implications thereof for Russia’s future. As posited by Dr. Eberstadt in his initial research proposal, Russia’s dependence on resource extraction for economic wealth at the expense of investment in human resources and capital not only bears inherent risks for Russia’s ability to sustain domestic economic prosperity and stability in the long run, but also has significant implications for Russia’s future political outlook and foreign policy framework. The challenge of the project undertaken by Eberstadt was to synthesize the disparate issues of Russia’s demographic prospects, educational situation, economic outlook, institutional and legal development, domestic political tendencies, foreign policymaking, and security policy into a coherent overall explication of modern Russia’s political economy. Toward this effort and to help inform Eberstadt’s research, the project’s first phase (2007–08) brought together an international team of experts in April 2008 to discuss “Russia’s Political Economy: Trends and Implications” at a workshop co-sponsored by NBR and the Hudson Institute in Washington, D.C. Through a series of panels addressing Russia’s demographic challenges; policy priorities in the country’s health and education sectors, natural resource development, and public finance infrastructure; and the impact of Russia’s resource-based economy on its domestic politics and foreign policy outlook, workshop panelists discussed and assessed the complex interplay among social, economic, and political pressures shaping Russia’s emerging political economy. It is significant that the workshop took place prior to the global financial crisis, and the subsequent fluctuation in resource prices, of late 2008. Confidence in Russia’s ability to sustain its decade-long economic successes, attributed largely to its vast natural resource wealth and fortunate happenstance of high global price and demand for oil and natural gas, took on a new meaning in the face of the inevitable impact on gas demand and price of a weakened global economy. In that light, the portent of the workshop’s conclusions that the “long term growth potential, and indeed the health of its socio-economic fabric, will be threatened when Russia either runs out of resources or when global demand and oil prices decrease” loomed closer on the horizon than perhaps anyone had anticipated. The impact of the crisis also spotlighted the workshop’s findings regarding the vulnerabilities of Russia’s political economy, described as a “political complacency and lack of economic diversification” that is “compounded by the country’s looming demographic problems in the face of a declining population and the concomitant challenges of a healthy and viable critical mass working force to contribute to long-term sustainable growth.” iii The implications of Russia’s demographic crisis are explicated in grave detail in this final phase (2008–09) project report on “Russia’s Peacetime Demographic Crisis: Dimensions, Causes, Implications.” Eberstadt paints a compellingly grim picture of Russia’s future demographic profile, which has serious implications for the country’s domestic policy priorities as well as its ambitions to regain a preeminent position on the world geopolitical stage. Indeed, Eberstadt’s report leads one to question the very viability of Russia as a resurgent power of the 21st century. The “haunting specter of depopulation,” as described by Eberstadt and exacerbated by the policy framework of Russia’s political economy today, portends a crisis of alarming proportions for Russia’s future human and social capital, with critical implications for the country’s internal stability as well as for its future security outlook. Given the importance of Russia today on the global geopolitical stage, Eberstadt’s report is a highly recommended read for anyone interested in Russian affairs. NBR would like to thank the Smith Richardson Foundation for its generous support of this project. We are also grateful for the support of Pfizer Inc. toward research for this study. Finally, we would like to acknowledge the NBR project team, fellows, and editors, whose efforts contributed to the success of this initiative. A. Mahin Karim Senior Project Director The National Bureau of Asian Research iv v Russia’s Peacetime Demographic Crisis: Dimensions, Causes, Implications Nicholas Eberstadt NICHOLAS EBERSTADT holds the Henry Wendt Chair in Political Economy with the American Enterprise Institute. He is also a senior adviser to the National Bureau of...