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Demographic change affects economic prospects

History will record October 31, 2011 as the day when the family of humanity reached seven billion.

For most people it would have been an ordinary day, at best ignored.

Obviously, reaching this milestone will not invite worldwide celebrations but will certainly invoke intense scrutiny by futurists, demographers, economists, scientists and politicians to analyse and evaluate its impact.

Some interesting figures have emerged, which indicate that since 50,000 BC, 108 billion people have lived in this world.

Interestingly, the growth of population is highest among the poorer nations, away from the basic and vital resources required to support the growth.

Countries with rich resources experience low fertility rates, small nuclear families and increased life span, causing Governments to worry about maintaining productivity and increasing financial provision to provide old-age care.

According to Time, the world added a billion people to its population in 1804, 1927, 1959, 1974, 1987, 1998 and 2011 (to reach 7 billion). Global population is projected to reach eight billion in 2025 and nine billion in 2043.

According to statistics, China has 19% of the world’s population, of which 50.4% are men and 50.5% live in urban areas.

Eroding the Earth

While providing for the physical needs of the people is not seen as an immediate problem (barring iniquities in income generation and distribution), the growth is not matched by the physical expansion of the Planet. It has remained static whereas arable land is shrinking because of desertification, soil erosion, soil contamination, rise in salinity of soil precipitated by rise in sea levels, uncontrolled urban sprawl, pollution and indiscriminate use of chemicals.

Despite these factors, people are living longer!

The irony is that while longevity is a positive factor, the cost of providing for the aged is becoming a major challenge, squeezing the already scarce resources and forcing some countries to borrow. Such approach has negative impact on economic and social development and to make it worse, borrowing is usually at the expense of not only the present but also future generations.

Uncontrolled population growth in Third World countries is a worrying trend, as fighting against hunger, poverty and other needs overwhelm those caught in its swirl.

Unfortunately, millions succumb to such pressures. However, illiteracy plagues most survivors, with many becoming consumers and not producers of wealth.

Liberation from this cycle is the cry of most countries but there is little in sight for a global shift to reverse this cycle.

Falling fertility

The rate of fertility has fallen in developed countries and people are deliberately opting for smaller families. One or two children per family are the emerging trend as cost for their welfare and education impose heavy financial burden on parents.

China has relaxed its ‘One Child Policy,’ allowing people to have two children.

The country now foresees grave problems in maintaining economic growth, as its aging population begins to lean on state resources.

India on the other hand is blessed with an extremely youthful population, becoming a major source of human power in the decades ahead.

However, gender imbalance may have an adverse affect on the Indian demography. According to estimates, men will outnumber women because parents continue to opt for male children for socio-economic reasons.

Japan is in dire straits, as its aged population is a major consumer of state resources.

The country’s birthrate has fallen dramatically with scarce human resources impacting social and economic growth.

Worldwide demographic trends show significant similarity. In 1950, there were 12 working-age people for every person over the age of 65 and by 2050, it would reduce to three working people for every person. Experts say that the current economic crisis pushed an additional 64 million into extreme poverty.

Challenges ahead

The future is beset with challenges that would require leaders of vision, courage and commitment to make choices that may bring short-term pain but long-term gain. Sadly, leaders of virtue are a dying breed and political opportunism is driving a new set of leaders to power, opting for choices that enhance their political tenure.

There is nothing on the political landscape of the world to make us feel optimistic about our future.

However, as New Zealand goes to the polls next month, we have an opportunity to make the difference for our nation. We need good, brave, honest and sincere leaders who can steer the ship of the nation safely through the troubled waters.

Rajendra Prasad is our columnist known for his analytical thought and wisdom.

Email: raj.prasad@xtra.co.nz

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