PHILIPPINES – At the ASEAN Summit Japanese Prime Minister Shinzô Abe told his confreres that the biggest threat to the world today is under population. Coming from the head of state whose country is suffering from the “grey dawn” brought about by a fast aging population, this did not come as a surprise. In Europe German Chancellor Angela Merkel has uttered the same sentiments in European councils. In the meanwhile, France and Singapore are busy granting bonuses to newlyweds to reproduce more even as China has revised her population policy to allow for two children per family.
No such problem exists in this country. The Philippine population is our gift to the world. We are not referring to Manny Pacquiao or our beauty queens. We are referring more to the doctors, nurses and health workers that one can find in abundance in hospitals in the US, Europe the Middle East and Asian countries. We are referring to the thousands of sailors that are on board the hundreds of vessels that sail the seven seas. We also refer to the thousands of service industry workers from the domestic workers in Western Europe, Hong Kong and Singapore as well as the salespersons that take care of retail outlets in Doha, Dubai and other Middle East capitals. Not but not the least the Filipino priests that work in many parishes all over the world. Indeed as the third biggest Catholic country in the world Filipino missionaries are the vanguards of the church evangelization efforts in many continents.
For every 10 Filipinos 7 are under 40 years old that is three-fourth of the population. One half are 24 years and younger – these are mostly found in the primary, secondary and tertiary educational facilities with the exception of dropouts in rural areas. We have been described as a nation in short pants whose median age is the early twenties. Our population growth has happened and will continue to happen due to improvements in medical knowledge and practice.
In my travels abroad I have exhorted industrialists to take advantage of the demographic dividend enjoyed by this country whose lower labor costs will allow industries abroad who suffer from a dwindling and ageing labor force which now results in a higher wage bill to outsource their production activities in this country to be more competitive.
For societies living by traditional methods of agriculture, the case in this country which by benign neglect produced agricultural under-productivity, low incomes and low employment opportunities large families brings about economic hardships but, but it is also true that large families have provided millions of overseas workers who have buoyed up the country’s economy with substantial inward remittances of hard-earned foreign exchange. It has also provided the world of opportunities for business process outsourcing for overseas companies who have a hard time coping with higher labor costs in their own economies because of the scarcity in their labor force.
Indeed the beneficial economic effects of large and expanding markets such as those in BRIC (Brazil, Russia, India, and China) are abundantly clear. The principal problems created by population growth are not those of poverty, but of the unequal distribution of the exceptionally rapid increase of wealth in favor of rich regions at the expense of developing nations.
In hindsight, the correlation between population growth and economic development has been a recurrent theme in economic analysis since at least 1798 when Thomas Malthus famously argued that population growth would depress living standards in the long run. The theory was utterly simplistic – given that there is a fixed quantity of land, population growth will eventually reduce the amount of resources that each individual can consume, ultimately resulting in disease, starvation, and war. The way to avoid such dire consequences was ‘moral restraint’ (i.e. family planning). He did not foresee however that scientific and technological advance would raise agricultural productivity and extended the life span, enabling the world’s population to grow from 1 billion in 1798 to some 6 billion today.
Since Malthus however, numerous empirical studies, utilizing the growing volume of comparable international data, has failed to detect a close relationship between national population growth rates and per capita income growth.
Julian Simon in 1980 summarized this research, emphasizing that “[empirical studies find no statistical correlation between countries’ population growth and their per capita economic growth”. Indeed, he maintained long run effects were positive. This “unorthodox” view influenced the policy position of the US government at the World Population Conference in Mexico City in 1984—namely that “population growth is, by itself, a neutral phenomenon [with respect to economic growth]” It also contributed to a major fall in international funding for family planning programs, beginning in the 1990s.
The conventional wisdom today is that when fertility rates decline over a sustained period of time the proportion of the working age population (i.e. over 15) grows relative to the economically dependent youth population. This change in age composition creates a window of opportunity during which a country can potentially raise its level of savings and investment—a phenomenon now known as the ‘demographic dividend’. This finding prompted a subsequent reconsideration of the potential importance of reducing fertility in pursuit of growth.