02 January 2009

Capuchins in 2050, part 2

In a previous post, I wrote about two articles* I read recently on world demographic trends and about the implications of those trends for the Capuchin Order. As I wrote in that post, the main focus of the articles was on the financial implications of demographic trends. Since Capuchins are affected by the economics of the society in which they live, these demographic trends will have implications for the Order’s finances, as well.

The basic premise of one of the articles is that demographics have a determining effect on economics. One of the most widely-used indicators of a country’s economic well-being is the Gross Domestic Product, or GDP, which measures the amount of wealth produced in a country each year. Citing studies by Jeffrey Williamson, former head of the Harvard economics department, the article “The Pig in the Python…” noted the strong influence demographics have on economic growth. In somewhat oversimplified terms, one can say that there is a positive correlation between a country’s economy and the number of its 40-year-olds. This is so because the years surrounding the age of forty are generally the most productive years of a person’s life, at least in terms of economic output. (It is an oversimplification, however, since it ignores issues such as the distribution of wealth, tax structures, bribery and corruption within the country).

Accepting this basic premise and applying it to the demographic situation presented in my previous post, points to declining wealth in areas such as Europe and, to a lesser extent, North America over the next forty years, whereas in parts of Asia and Africa wealth will gradually increase over the next forty years. This process has already begun. The economic growth of India and China, for instance, is obvious. In recent years, the GDP of each country has grown as a percentage of the world’s total GDP. This growth has come largely at the expense of Japan, which has seen its share of world GDP slip from 18% in 1995 to 8% in 2007. Japan, as I noted in my last post, is in a period of negative population growth. Europe’s share of world GDP fell from 40% to 27% in that same period. The United States, on the other hand, saw its share of world GDP increase from 24% to 26% from 1995 to 2007. Looking forward, however, both the United States and Europe will face greater social spending costs because of its aging population. This in turn will limit their economic growth and cause their share of world GDP to slip even lower.

Under the leadership of Br John Corriveau, the Order set up a Solidarity Fund to support its missionary efforts in poorer areas of the world. The Fund has been instrumental in allowing the Order to bring the Franciscan charism to new areas of the world and to support many of its traditional missions. As of last year, 30% of the money distributed for mission solidarity was supplied by the Fund’s investments. Most of the other 70% came from contributions by the Order’s jurisdictions, mainly in Europe and North America. If, as expected, those countries have fewer economic resources in the future, donations received by our jurisdictions there will also decrease. Fewer donations means fewer financial resources available to the Solidarity Fund. In addition, many of the jurisdictions in Europe and the United States who so far have been able to support their missions without recourse to the Solidarity Fund may have difficulty doing so in the future. This could lead to more requests for financial support in the future, placing increasing pressure on the Fund.

With good management and a disciplined approach, the investments of the Solidarity Fund will continue to grow, thus providing critical, long-term support to the Order’s missions. It seems clear, however, that the growth in its investments will not be able to offset the expected decline in contributions to the Solidarity Fund from the Order’s European and American jurisdictions. We have no reason to panic at this point, but neither can we afford to ignore these “signs of the times”.

This emerging situation is yet another reason for Capuchins throughout the world to review their lives in light of the principles enunciated by the Sixth Plenary Council of the Order. Transparency, participation, equity, subsidiarity, solidarity, austerity and co-responsibility within the Order were never more important than they are now. In particular, we need to re-discover the value of austerity, the “mother of solidarity”. By practicing austerity, brothers in wealthier societies will have more to share with their brothers in need, and brothers in poorer societies will allow more of the available resources to go where they are most needed. The future of the Order’s ability to bring the message of the Gospel to the world depends on the actions we take today.

* The two articles in question are:
Verne Sedlacek, “The Pig in the Python and Other Reports from the Front Lines of Demography,” in Mission Matters. Spring/Summer 2008, pp. 2-7.
Michael Strauss, “World Potrait, by the Numbers,” in Mission Matters. Spring/Summer 2008, pp. 8-13.