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FEATURES |
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SOME HAVE
BABIES; OTHERS, REGRETS!
(Part 6)
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Philip P. Eapen |
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Author's webpage:
http://philip.eapen.googlepages.com
In this series, Philip P.
Eapen examines the claim
that the world is over-populated in the
light of biblical, historical, and scientific
data
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Will a Growing Population Slow
Economic Growth?
Related to the claim that a robust population growth
rate will usher in famines and resource crunches is the
claim that rapidly growing populations will suffer
poverty and slow economic growth. Rich
nations/communities may find it easy to blame the high
fertility of poorer nations/communities for the latter’s
poverty. Politicians too find “population explosion” a
welcome excuse for failed economic policies. (A good
example is China, after the failure of Mao’s policies in
the 1960s. Whelan, Choices in Childbearing.) Governments
therefore pursued population control policies to ensure
a better future for their people.
However, in the 1980s, there came about a great change
in the field of economics—economists discovered that
there was no scientific basis to link population growth
negatively with economic development. (Myers and Simon,
Scarcity or Abundance.) According to Simon, such a sea
change came about in economics with the publication of
Population Growth and Economic Development—a report of
the National Research Council (NRC) and the National
Academy of Sciences (NAS) in 1986. Contrary to what was
reported in 1971 – that population growth would
adversely affect “savings, investment, food supplies,
unemployment, modernization, technological change,
industrialization, social areas, education, health and
child development, and the environment” – the 1986
report concluded that “the concern about the impact of
rapid population growth on resource exhaustion has often
been exaggerated.” (National Research Council,
Population Growth and Economic Development: Policy
Questions. Washington D. C.: National Academy Press,
1986). This report thus differed from all previous
economic reports that portrayed population growth as a
deterrent to economic development.
However, the effects of population growth depend on
various factors such as the economic system and
efficiency of a country, political stability, rate of
population growth, population structure, etc. While
population growth may favour a country that enjoys
economic freedom and political stability, it may result
in adverse effects in a country that has a centrally
planned economy and/or political instability. This was
conclusively proved in a study that compared the
development of pairs of countries such as East and West
Germany, North and South Korea, and China and Taiwan. (Myres
and Simons). These paired countries differed mainly in
the economic system that they followed—one was
capitalistic while the other was communist. They started
out with comparable birth rates. However, over a period
of time, it was noted that the countries that followed a
free market system outperformed their counterpart that
had planned economies. Poverty and slow economic
progress that countries such as India, North Korea,
China, and other socialist or communist countries
experience (in comparison with similar countries that
chose a capitalistic economy) cannot now be ascribed to
“population explosion.”
A recent study on the economic future of four highly
fertile countries – Brazil, Russia, Indian and China (BRIC)
– brought forth astonishing results. Dominic Wilson and
Roopa Purushothaman, “Dreaming with BRICs: The Path to
2050,” Goldman Sachs Global Economics Paper No. 99 (1
October 2003) This book has mapped out the GDP, per
capita income and currency movements in these BRIC
countries till the year AD 2050. They have concluded
that:
• In less than 40 years, the BRIC countries would have a
combined economy (in USD) that is larger than that of
the G6 nations—USA, UK, Germany, Japan, France and
Italy.
• One of the main factors that would help the BRIC
countries is their growing population, especially their
swelling productive population in the age group 19 to 50
years.
• Among the BRIC countries, rate of population growth
differs. The working population in BRIC will eventually
decline over the decades; however, the decline will be
less steeper in Brazil and India than in Russia and
China. The strength of Indian workforce is set to peak
by 2020 and will not decline quickly as compared to a
similar decline in other countries because India’s
fertility and population growth are not expected to have
an abrupt decline. graph below illustrates the rise and
fall of the work force in BRIC countries and of G6
countries. What is perceived commonly as “population
explosion” in Brazil and India is responsible for this
favourable development!
• India could show the fastest economic growth over the
next 30 and 50 years. Growth could be higher than five
percent over the next 30 years and close to five percent
even upto AD 2050 if economic development continues
steadily. These predictions work on certain assumptions
such as political stability, sustained economic growth;
spread of education to the masses; openness to trade and
foreign direct investment. India needs to improve on
trade practices and in her investment in the field of
education. Optimism about India’s 540 million youth (54%
of population below 25 years) is shared by many leaders
and entrepreneurs . Cf. Azim Premji, “Writing is on the
wall: Get the A,B,C right,” Outlook (12 January 2004).
Also, Paromita Shastri, “Tender Shoots,” Outlook (12
January 2004).
• The wealth and productivity of BRIC countries may not
be reflected in the commonly used measure, the “per
capita income.” This would mean that individuals, on
average, in the BRIC countries, though their countries
are richer, could be earning much less than individuals
in the G6 countries. By 2050, India’s per capita income
(in USD) will be 35 times that of her per capita income
in the beginning of this century. Yet, the BRIC study
notes that “India’s income per capita will be
significantly lower than any of the countries we look
at.” (Dominic Wilson and Roopa Purushothaman, “Dreaming
with BRICs: The Path to 2050,” Goldman Sachs Global
Economics Paper No. 99 (1 October 2003)) This should not
be a matter of concern because per capita income is not
a good measure of the prosperity of a country; its value
can go up just by a decrease in population! (The
usefulness of per capita income as a measure of
inequality is called into question by the NRC report of
1986. National Research Council, Population Growth and
Economic Development: Policy Questions (Washington D.C.:
National Academy Press, 1986), 64-65.) Countries that
attempt to maintain a high per capita income by
maintaining a negative population growth will miss out
in the larger arena of absolute national productivity.
Many years before the BRIC study was done, The Economist
had predicted a windfall of fortune for Asian countries
that achieved a rapid demographic transition
“Demographic transition” here refers to the change in
the structure of a country’s population from that which
has a large dependent population (both younger and
older) to that which has a greater productive
population.) and attained a favourable population
structure with higher proportion of working people.
On the other hand, many European countries are facing
grave economic problems due to declining fertility
rates. (“Europe’s Population Implosion,” The Economist,
17 July 2003.) Low fertility rate resulted in a skewed
population structure with lesser number of earning
members having to support a larger number of ageing
pensioners. If present trend continues, by 2050, Europe
will have to support 75 pensioners out of the earnings
of every 100 workers. Currently, as workers in Germany
and Italy pay close to a third of their earnings to
government pension accounts, it is not surprising that
these countries faced labour unrest. European countries
such as France and Sweden now offer financial incentives
to families that choose to have more children. In spite
of local opposition to immigration of skilled workers
from Asian countries, the United Kingdom, like other
European countries, is promoting immigration in order to
sustain economic growth. Minister McNulty said, “We need
the numbers that the country needs for economic
success.”
(“British Immigration Map Revealed,” BBC News, 7
September 2005.)
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This page
is updated on Nov 2, 2009 |
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PRAISE THE ALMIGHTY
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