Mercedes B. Suleik
“92.3 MILLION AND GROWING!” screamed the headline of one broadsheet. This was followed by the sub-headline “100 million Filipinos by 2015” which would simply scare the heebie-jeebies out of anyone. And of course, seized upon by the proponents of the RH Bill, as a great way of pushing their agenda forward—how are all those mouths going to be fed?
Once again one of oldest myths of economic literature which continue to belabour the consequences of population on the pace and process of economic growth is being rehashed. The Malthusian proposition of 1798 has become some kind of dogma to population junkies. Proponents of this doctrine have sanitized it to look like an innocuous, reasonable proposal to promote economic development. Poor countries, let’s be honest and say, the Philippines, has been the target of this campaign to “manage population” as a national policy.
Expanded elaborations of the Malthusian theme raised the bogey of difficulties of feeding expanding populations and of pressures on capital formation – assessments we might say were mostly concerned with short-run, direct impacts and downplayed indirect and longer-run effects that would likely occur due to price responses, institutional changes, and certainly technological innovations that poor old Malthus never imagined would ever come to pass. As a matter of fact, well-known economist Simon Kuznets, basing his conclusion on longer-run assessments, found that based on simple correlations, a net negative impact of population growth on per capita output was not obvious in the data. Indeed, a number of findings highlighting both the productivity of human capital and the importance of technical change put into question the highly pessimistic Malthusian underpinnings of the population bomb theories.
Now comes an even more positive window of opportunity in the development of society and a nation—studies that show a demographic dividend that countries such as our may exploit, by laying down appropriate policies that would make possible faster rates of economic growth and human development as fertility rates decline.
In the case of the Philippines, its population has increased at the average rate of 1.9 percent annually for the period 2000-2010 (in contrast to the lie that has been fed to our legislators and RH advocates – 1.9 percent versus the touted 2.3 percent, happily endorsed by USAID and UN-MDG people who have dangled the carrot of development with the stick of birth control—even non-statisticians can see the huge difference!
What is this demographic dividend? Simply stated, the demographic dividend occurs when a falling birth rate changes the age distribution so that fewer investments are needed to meet the needs of the youngest age groups and resources are released for investment in economic development and family welfare. A falling birth rate makes for a smaller population at young, dependent ages and for relatively more people in the adult age groups – who comprise the productive labor force. It improves the ratio of productive workers to child dependents in the population, allowing for faster economic growth and fewer burdens on families.
It may be mentioned that the effect of this drop in fertility rates is not immediate. There is a lag that produces a generational population bulge that for a time exerts a burden on society and increases the dependency ratio. Eventually this dependent group will reach the productive labor force, and the dependency ratio will decline dramatically, leading to the so-called demographic dividend. This is the time when effective policies can facilitate more rapid economic growth, putting less strain on families. During the course of the demographic dividend, four mechanisms that will benefit society may be delivered through increased labor supply; increase in savings; human capital; and increased domestic demand.
Indeed, no less than BSP Gov. Amando Tetangco Jr. stated that the country’s large population of young workers with purchasing power provides the economy with the demographic dividends that are good for consumption and investments. This period in an economy’s history where more people or a prominent portion of the population is of working age results in greater purchasing power which can drive consumption, savings, and investment. He said that our average age is 22.2 years, with nearly half a million graduates entering the labor force each year, providing companies with a large pool of manpower to fill their requirements. By 2015, Tetangco said, we will reach that demographic sweet spot.
Our country should take advantage of the opportunity to enhance the key features of the economic life cycle. The productivity of young people depends not just on the availability of jobs but on their capacity to take up employment opportunities, i.e., education. As an aside, it has also been mentioned that there is a “second demographic dividend” which relates to a large proportion of older working age people who face longer periods of retirement, accumulate assets, and contribute to the economy’s consumption, savings, and investment. May I appeal to the one-track minded anti-life advocates to sit up straight and think through the benefits of the demographic dividend that we have been blessed with – and by the way, this dividend period, according to Wikipedia, is neither automatic or permanent and would last approximately five decades. So we better not muff it!
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