Warsaw, Poland – According to U.N. projections, the combined population of the four Visegrad countries (the Czech Republic, Slovakia, Hungary and Poland) is expected to fall by 13% by 2050, making Central Europe’s population one of the fastest shrinking in the world.
The overall population should drop from approximately 64 million people in 2017 to 55 million in 2050. In others words, a demographic decline almost equivalent to the complete disappearance of Hungary’s current population…
The biggest drop is expected to take place in Hungary (-15%, or 1.5 million people) and Poland (-14%, or 5.5 million people), while Slovakia (-10%) and the Czech Republic (-5.5%) will also face the consequences and challenges of a rapidly shrinking population in the near future.
According to the U.N., Europe is the only region in the world expected to experience demographic decline by 2050, with the Central and Eastern fringes of the continent poised to be the most vulnerable due to a strong emigration drive, restrictive immigration policies and low birth rates. Poland is the most illustrative example of the combination of those three factors. Bulgaria (-28% of its current population) and Romania (-22%) will experience the fastest demographic drops worldwide.
This dramatic demographic decline represents one of the most pressing challenges for Visegrad economies. Their booming growth rates and incredibly low unemployment conceal a darker, more nuanced picture of the state of their economies, which rely on obsolete low-cost growth models while businesses are facing crippling labor shortages.
Are those countries ready for that structural shift? Current signs seem to indicate otherwise. There are two main solutions to address the challenges of an ageing population at the economic level: immigration and automation.
On the topic of immigration, the four Central European states have, over the past few years, led the charge against any attempts at the EU level to implement burden-sharing measures or mandatory relocation mechanisms. Despite having accepted next to no refugees at all since 2015, Czechs, Slovaks, Poles and Hungarians vigorously oppose any plan to facilitate the arrival of immigrants from outside Europe. Their governments are, meanwhile, all too happy to capitalize on their fear.
Their attempt, as is the case in Poland and the Czech Republic for instance, to facilitate the arrival and long-term stay of foreign workers from other Eastern European countries, like Ukraine, Serbia or Romania, proves however that they’re aware of the need to address those labor shortages. But instead of opening their doors to people from the Middle East or Africa, they rely on workforce from their Eastern neighbours – thus potentially accelerating these countries’ dramatic demographic declines.
The other solution, outsourcing the open positions to robots, remains very divisive as well, despite a growing awareness among decision-makers. As of today, automation seems to be predominantly perceived as a threat to current jobs rather than as a driver of tomorrow’s economy. Slovakia, considered one of the world’s most vulnerable countries to automation, is a good example of that dilemma.