As shown in the above table, there is a systematic pattern where younger countries run current account deficits whereas older countries run the surpluses. Developed countries are generally older than emerging markets but the US and the UK are young by advanced country standards and run deficits. Aging developed countries like Netherlands, Germany and Japan run surpluses. Similarly, China, Russia, South Korea and Taiwan are old by emerging market standards and run surpluses while younger countries like India, Brazil and Turkey run deficits. Notice the strong impact of demographics irrespective of the level of development. Admittedly, there are some exceptions – Saudi Arabia (where demographics is overruled by a natural resource) and France – but the overall pattern is undeniable. The link is even clearer if one considers the pace of aging by comparing the current median age with the expected median age in 2030. For instance, Japan will then have a median age of 51.6 years while China will go from being significantly younger than the US in 2010 to becoming significantly older after two decades. The aging of South Korea is even faster. It is no coincidence, therefore, that all of today’s current surplus countries (ignoring oil producers like Saudi Arabia) will have a median age above 40 years in 2030.

Eoin Treacy's view The creation of the Euro afforded countries such as Germany, Austria, and the Netherlands the opportunity to invest excess savings in high growth economies on the periphery without currency risk. We know what the result of such profligacy was, but the need to get a return on savings remains relevant nonetheless.

This suggests that countries with positive demographics will remain targets for global savings. However, this will also be dependent on improving standards of governance, respect for property rights and recourse to an independent judiciary. Countries that aspire to these attractive characteristics are likely to be among the most successful in attracting investment to spur growth.