Paradox of depopulation

In 2023, India replaced China as the globe’s top-populated country. Having peaked at 1.413 billion in 2021, the Chinese population contracted the following two years to 1.409 billion.

Beijing, which had announced, and subsequently strictly enforced, a one-child policy in 1980, introduced a two-child policy in 2016 before allowing families to have three children in 2021. The policy has been augmented with monetary and non-monetary benefits (such as paid leaves) for men and women who opt to enlarge their families. However, as initial statistics together with prevalent social trends bear out, the success of the three-child policy remains doubtful.

Several other countries, particularly advanced economies, are facing depopulation. In Japan, the world’s third-largest economy and Asia’s most advanced nation, the population peaked in 2008 and then began to fall. It’s projected that the Japanese population will shrink by 50 per cent from the peak level by the end of this century.

South Korea, one of Asia’s biggest success stories in high-quality development, has the lowest fertility rate in the world. Like Japan, South Korea is also projected to have its population shrunk by half at the turn of the century from the current level of 51 million.

Why should depopulation be a matter of concern in the aforementioned countries, and other such nations? As a rule, depopulation together with increased life expectancy is accompanied by a growing share of old people in the total population. In China, the old (aged 65 and above) currently constitute 14 per cent of the total population and may exceed 25 per cent by 2050. In Japan, the old account for 29 per cent – the highest anywhere in the world – of the population and are forecast to make up 35 per cent by 2040. Currently, 19 per cent of South Koreans are aged 65 or above. The share is likely to rise to 37 per cent by 2045.

This means that in the coming years in these countries, social security spending will go up substantially at the cost of, say, infrastructure-related expenditure. Not only that, but the labour force will also shrink, economic output fall, and the dependency ratio rack up by a long way.

A study published in the July 2020 edition of the prestigious journal ‘The Lancet’ predicts that the Chinese economy will overtake the US to become the largest by 2035. However, the demographic shifts in the two countries will make the US reclaim the top slot before the end of the century. China and the US will be the second and third most populated nations respectively behind India and Nigeria.

Unlike Western countries, notably the US and UK, the East Asian nations are not likely to open their borders to absorb workforce from outside, given the exclusive character of their cultures. So, depopulation seems inevitable.

Japan and South Korea have for several years taken to capital-intensive and information and communication (ICT), including AI-based development, to shed reliance on labour, while China is trying to catch up with both its neighbours. The growing number of the old is also giving rise to the silver economy – dedicated to providing goods and services to senior citizens – which will create jobs and contribute to economic expansion. However, only the affluent among the aged will be able to become part of the silver economy. Alternatively, the state will have to bankroll such services, which will make a big hole in its kitty.

At any rate, depopulation is the price of development. When a nation moves up the economic trajectory, people tend to become more pragmatic. Having more children, or having them at all, is felt as an economic burden or a distraction from the more important pursuit of career development.

Both men and women also tend to marry late, which shortens their biological parenting period. Once such patterns become a norm, like old habits, they’re difficult to discard. That’s why the government’s efforts in China to encourage large families aren’t likely to bear fruit, even though the Chinese are the most disciplined nation on earth.

Having fewer kids is not only an effect but a cause of economic development as well. Francis Bacon once remarked that one who marries and has children has made himself hostage to fortune. What he meant was that married people are on the whole more risk-averse and are less likely to get out of their comfort zones than single ones. For economic development, two conditions are essential: the presence of risk-taking entrepreneurs and the perfect mobility of labour. All else equal, unmarried or small families are better placed to satisfy these conditions than married people and couples with no or fewer children.

At the other end of the scale, many developing countries are facing relatively high population growth. A case in point is Pakistan. At the turn of the century, the country’s population was 139.55 million, which by 2017 had risen to 207.77 million, registering a rather high cumulative growth of 49 per cent. The 2023 Digital Census puts Pakistan’s population at 241.5 million, meaning that in 23 years our population has increased 73 per cent, at an average annual rate of 3.2 per cent. Youth bulge is one principal consequence of rapid population growth, as more than 64 per cent of the people are below 30 years of age.

The above-referred Lancet study predicts that Pakistan’s population will peak at 314 million in 2049. However, by 2100, the number would come down to 248 million. Pakistan will still be the fifth most populous country. The fertility rate for Pakistan will decline from a high of 3.4 per cent in 2017 to 1.3 per cent in 2100.

The higher the relative size of the young population, the greater the supply of the workforce and the less the spending on old age and post-retirement benefits.

A predominantly young population also means a growing demand for goods and services. Such demographic credentials can, however, prove an asset only if substantial investment is made in human resource development and employment generation. Jobless and disgruntled youth are highly susceptible to indulging in deviant behaviour swayed off their feet by dream sellers and fortune seekers masquerading as saviours.

Economies like Pakistan with abundant unskilled labour and scarce capital and land are already subject to the law of diminishing returns, which translates into decreasing marginal productivity of labour, as the workforce expands. Because of a highly skewed resource distribution, a significant segment of the labour force remains unemployed and needs to be exported to the economies that are better off. Not only that, the people’s wants well exceed public resources. No matter how many schools and hospitals the government sets up, such facilities will remain in short supply in the face of a spiraling population. Such societies are overpopulated and thus need to cut down on the birth rate.

The notion of a high or low population is relative. A nation is over- or under-populated relative to its resources. By the same token, a baby boom or bust is good or bad depending on the resource base of a country. This accounts for the notion of an optimal population size, which is commensurate with the national resources available to sustain it.

By all accounts, Pakistan’s population is far above the optimal level, putting severe strains on its scarce resources, and stretching them to their limits. The current population growth rate of 2.5 per cent is again too high for the country. The high and fast-growing population is a ticking bomb that needs to be defused before it wreaks havoc.

The writer is an Islamabad-based columnist. He tweets/posts @hussainhzaidi and can be reached at:

hussainhzaidi@gmail.com