Demographic Growth, Resource Constraints and Conflict

The UK’s Ministry of Defense has a Strategic Trends Programme that made a report in 2008 called “Global Strategic Trends – Out to 2040”. If you skim through the report, there are some very enlightening charts.

-Page 28 lays out the population growth and aging forecasts for the different regions of the world.

-Page 42 has a very interesting chart of global infrastructure and resources.

-Page 67 contains a map highlighting the areas with the most potential for conflict driven by frontier disputes.

One of the most interesting charts is on page 69 of the report. It highlights areas where there will be an overlap of at least two of the following: demographic growth, water and food shortage and crop decline. The top chart looks at the current situation, which shows that current stress zones are correlated with conflicts containing greater than 8000 fatalities since 1997. The bottom chart uses forecasts to identify where the future stress zones will be in 2040.

Image002

The forecast of larger stress zones in China is particularly interesting. China is going to have water management issues that they will have to deal with as they try to keep their economy on course. Water treatment facilities are a large part of this solution, but since they require a lot of energy, this will add to China’s energy demand.

About

I studied Bioengineering at the University of California at San Diego. While there I served as a trustee on the investment committee of the UCSD Student Foundation, a group that manages an endowment to fund scholarships. While in college I applied my interest in finance and economics by working as a summer associate at Clarium Capital Management, working part time my senior year, and joining full time when I graduated in 2006, staying there through August 2010. I am currently working as a portfolio manager at another global macro hedge-fund in the Presidio (And blogging about more directly market related ideas at their restricted blog). I’ve been focusing on quantitative finance, currencies, commodities, the interplay between finance and politics, demography and other long term trends.

Disclaimer: You shouldn’t consider anything on this site to be a recommendation or solicitation to buy, sell, or hold any securities or commodities. I’m not offering you investment advice. I or the company I work for may hold positions in securities that I mention.