Migrants as the ‘Fuel’ of Western Development

The demographic balance of European countries is changing, with the number of senior citizens increasing. This shift has also impacted their economies. Asian and African countries, where the youth population is on the rise, will benefit from these changes. Thus, migrant workers will play the most crucial role in sustaining the growth rate of Western nations.

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Migration is an inevitable component of globalization. As globalization accelerated over the past three to four decades, migration across the globe also increased. While this has triggered varied reactions, opposition to migration has been particularly strong in Western countries—the very nations that were the first and the greatest beneficiaries of globalization. However, in order to keep economies dynamic and expanding, the migration of both essential and skilled manpower becomes unavoidable.

In developed countries, including Europe, the demographic balance is shifting, with the number of senior citizens increasing. Hence, to maintain their pace of development, these nations are increasingly dependent on migrants from Asia and Africa.

The annual Jackson Hole Economic Symposium, organized by the Federal Reserve Bank of Kansas City, was held recently. This conference brings together all major Western countries and organizations to deliberate on global economic challenges. This year, the discussion particularly focused on demographic balance and its economic consequences. It was highlighted that the demographic balance in developed countries is shifting, with the population above 65 years steadily increasing.

Already, migrant workers and employees are playing a vital role in stabilizing the economies of Britain, Japan, and several key European nations. In the coming decades, this reliance is expected to increase further.

Christine Lagarde, President of the European Central Bank, also addressed this issue with supporting data. She pointed out that migration in Europe has risen overall, with the share of migrants in employment increasing significantly. Particularly after the COVID-19 pandemic, this process has accelerated. In 2022, foreign workers made up 9% of the workforce. In the subsequent three years, half of all new jobs created were taken up by foreign workers.

Lagarde emphasized that without foreign workers, Germany’s growth rate cannot remain above 6%. Spain’s economy, which has recently started to grow again, also owes much to migrant labor. The availability of foreign workers has enabled many companies to expand their businesses. She also highlighted that by 2040, 40% of Britain’s population will be over 65 years old.

 

Japan Worst Affected

The impact of demographic changes will be most severe in Japan. Foreign citizens account for only 3% of Japan’s total workforce. However, post-COVID, nearly half of the new jobs created were filled by foreign workers.

Japan’s total population is 124 million, of which 28.2%—about 36.2 million—are aged over 65. Among these senior citizens, 34% fall in the 75–84 age group, while 16% are above 85. According to World Economic Forum statistics, one out of every ten Japanese citizens is over 80 years old.

The rising cost of living, long working hours, and limited childcare facilities have discouraged young Japanese couples from having children. Moreover, Japan has one of the highest life expectancies in the world—ranking fourth globally. For a population to remain stable, the birth rate must be at 2.07. In Japan, however, the birth rate in 2022 was recorded at a historic low of 1.256.

All these factors have contributed to Japan’s demographic crisis, leaving the country with little choice but to increase its reliance on migrant workers to sustain its economy.

 

Rising Share of Elderly Population

Africa to Benefit

The shifting demographic balance will benefit Africa the most. Africa’s population in 1960 was 283 million; it has since grown fivefold to reach 1.5 billion in 2024. This number is projected to rise to 2.5 billion by 2050. By then, Africa will account for 25% of the world’s population.

The main reasons behind this growth are increased life expectancy and reduced child mortality rates. Currently, Africa’s working-age population (20–64 years) stands at 883 million, which is expected to reach 1.6 billion by 2050.

Within this, the youth population (aged 15–24) is projected to be 138 million. At that time, one in every three youths globally will be from Africa. This indicates that Africa will contribute the largest share of young workers to newly created jobs in the future.

 

India’s Present Situation

India has a large young population, which will benefit the country in the coming years. Especially, India is poised to supply the skilled manpower required worldwide.

So far, Indian migration has largely favored West Asian countries due to employment opportunities available for semi-skilled workers. However, with rising education and skills, the proportion of Indians in the US and Europe has been steadily increasing.

 

Indian Population Worldwide in 2024

Women Migrants Prefer the USA

When analyzing Indian migrants, a gender-based migration pattern also emerges. The highest number of male migrants is in the United Arab Emirates (2.28 million), followed by Saudi Arabia (1.77 million). The USA ranks third with 1.65 million male migrants.

However, the USA has the largest number of Indian women migrants—1.31 million. In fact, the ratio of male to female migrants in the US is nearly equal.

The UAE comes second for women migrants with 0.968 million, while Saudi Arabia ranks fifth with 0.179 million. In Canada and Britain as well, the proportion of male and female migrants is almost the same.

In summary, Western countries, which have so far reaped the maximum benefits of globalization, are now facing new challenges in the form of demographic imbalance. The advantage of this situation will go to Asian countries, which have been somewhat behind in the development process so far, and to African nations in the near future.