Arvind’s Newsletter

My newsletter will be away for a few days as I am travelling.

1.Philanthropy by India's super rich falls by a third in FY22, says report in Business Standard.

Philanthropic contributions made by India’s ultra high networth individuals (net wealth of over Rs 1,000 crore), also known as UHNIs, have fallen sharply to Rs 4,230 crore in FY22, from Rs 11,821 crore the previous financial year, according to the India Philanthropy Report 2023 by Dasra and Bain & Co, which was released on Wednesday.

The report says that the dramatic fall, almost by a third, was due to the fact that contributions by the Azim Premji Foundation dropped by Rs 9,000 crore due to a share buyback of Wipro, which helped the foundation to access liquidity directly.

However, the report laments that even excluding the Premji Foundation’s contribution, “Indian UHNI contribution has not kept pace with wealth creation” and is “below par, with a 5 per cent contraction in FY2022”.

2.Canada Pension Plan Investment Board (CPPIB) has become the majority owner of ReNew Energy Global plc with it agreeing to buy $268.6 million worth of shares from Goldman Sachs.

Post the transaction, CPPIB owns over 76 million Class A shares, one Class D share and over 118.363 million Class C shares, taking its total economic interest to 51.6%.

CPPIB has significant investments in the renewable space. The group holds a diversified portfolio, primarily long-term tangible assets, including renewable energy sources such as wind, solar and hydro, as well as conventional power, upstream oil and gas, energy midstream, carbon capture and liquefied natural gas.

3.Indonesia — home to huge deposits of the minerals required to fuel the green energy transition — is banning or restricting the export of its valuable commodities. Its president is already considering the establishment of an OPEC-like cartel for nickel, has hinted at export bans for tin and gold, and said his government will ban copper and bauxite exports, Nikkei reported. Jakarta wants to develop the downstream industries that could help it capture more of the economic value of the minerals. Iran, meanwhile, claimed to have discovered a major deposit of lithium, a necessary commodity for batteries and electric vehicles. The new geography dictated by the shift away from fossil fuels is taking shape.

4.A demographic tragedy is unfolding in Russia reports the Economist.

Over the past three years the country has lost around 2m more people than it would ordinarily have done, as a result of war, disease and exodus. The life expectancy of Russian males aged 15 fell by almost five years, to the same level as in Haiti. The number of Russians born in April 2022 was no higher than it had been in the months of Hitler’s occupation. And because so many men of fighting age are dead or in exile, women outnumber men by at least 10m.

War is not the sole—or even the main—cause of these troubles but it has made them all worse. According to Western estimates, 175,000-200,000 Russian soldiers have been killed or wounded over the past year (Russia’s own figures are lower). Somewhere between 500,000 and 1m mostly young, educated people have evaded the meat grinder by fleeing abroad. Even if Russia had no other demographic problems, losing so many in such a short time would be painful. As it is, the losses of war are placing more burdens on a shrinking, ailing population. Russia may be entering a doom loop of demographic decline.

The roots of Russia’s crisis go back 30 years. The country reached peak population in 1994, with 149m people. The total has zig-zagged downwards since. It was 145m in 2021 (that figure, from the un, excludes the 2.4m people of Crimea, which Russia seized in 2014 and incorporated into its national accounts). According to un projections, the total could be just 120m in 50 years if current patterns persist. That would make Russia the 15th-largest country in the world, down from sixth in 1995. According to Alexei Raksha, an independent demographer who used to work for the state statistics service, if you look just at peacetime years, the number of births registered in April 2022 was the lowest since the 18th century. April was a particularly cruel month but it was a revealing glimpse of a chronic problem.

Population decline is not unique to Russia: most post-communist states have seen downturns, though not like this. Their declines have been slow, manageable diminutions. Russia’s population in recent decades has seen a precipitous slump, then a partial recovery (thanks to a period of high immigration and more generous child allowances after 2007), followed by a renewed slump.

According to the state statistics agency, in 2020 and 2021 combined the country’s population declined by 1.3m and deaths outstripped births by 1.7m. (The un also shows a fall but it is shallower). The decline was largest among ethnic Russians whose number, the census of 2021 said, fell by 5.4m in 2010-21. Their share of the population fell from 78% to 72%. So much for Mr Putin’s boast to be expanding the Russki mir (Russian world).

All this began before the war and reflects Russia’s appalling covid pandemic. The official death toll from the disease was 388,091, which would be relatively low; but The Economist estimates total excess deaths in 2020-23 at between 1.2m and 1.6m. That would be comparable to the number in China and the United States, which have much larger populations. Russia may have had the largest covid death toll in the world after India and the highest mortality rate of all, with 850-1,100 deaths per 100,000 people.

If you add pandemic mortality to the casualties of war and the flight from mobilisation, Russia lost between 1.9m and 2.8m people in 2020-23 on top of its normal demographic deterioration. That would be even worse than during the disastrous early 2000s when the population was falling by roughly half a million a year.

What might that mean for Russia’s future? It is worth remembering that demography is not always destiny and that Russia did begin to reverse its decline in the mid-2010s. The impact of population change is often complex, as Russia’s military mobilisation shows. The decline in the number of ethnic Russians of call-up age (which is being raised from 18-27 to 21-30) will make it harder for the military to carry out the regular spring draft, which begins in April. It will put an even greater burden on young men in non-Russian regions such as Dagestan, where protests have already broken out. It is also likely to hamper plans to increase the size of the armed forces by 350,000 over the next three years. On the other hand, there is little sign that Russia is running out of young men to sacrifice in the bloodlands. In October the government claimed it had reached its target of drafting 300,000 extra troops to bolster the occupation.

Such complications notwithstanding, the overall effect of demographic decline will be to change Russia profoundly and for the worse. Most countries which have suffered population falls have managed to avoid big social upheavals. Russia may be different. Its population is falling unusually fast and may drop to 130m people by mid-century. The decline is associated with increased misery: the life expectancy at birth of Russian males plummeted from 68.8 in 2019 to 64.2 in 2021, partly because of covid, partly from alcohol-related disease. Russian men now die six years earlier than men in Bangladesh and 18 years earlier than men in Japan.

And Russia may not achieve what enables other countries to be rich and ageing: high and rising levels of education. Nicholas Eberstadt, a demographer at the American Enterprise Institute in Washington, dc, argues that the country presents a peculiar combination of third-word mortality and first-world education. It has some of the highest rates of educational attainment among over-25s in the world. But the exodus of well-educated young families is eroding this advantage. According to the communications ministry, 10% of it workers left the country in 2022. Many were young men. Their flight is further skewing Russia’s unbalanced sex ratio which in 2021 meant there were 121 females older than 18 for every 100 males.

The demographic doom loop has not diminished Mr Putin’s craving for conquest. But it is making Russia a smaller, worse-educated and poorer country, from which young people flee and where men die in their 60s. The invasion has been a human catastrophe and not only for Ukrainians.