Demographic dividend — opportunity or threat?

Published: October 17, 2011
Email
The writer works for the ministry of industries and has a master’s in public administration from Harvard University

The writer works for the ministry of industries and has a master’s in public administration from Harvard University

Pakistan has a rare opportunity to capitalise on its population bulge, fast turning into a ‘youth bulge’. It is faced with a demographic transition whereby the size of the working age population (15-64 years) will expand to occupy a larger share of the total population. This is expected to decrease the dependency ratio, lead to increased savings and long-term investment trends as more people will be working. This outcome has a direct influence on economic growth. But provided that the working age people are actually working and that the gender and educational gap do not keep potential workforces including females, out of the job market.

With around 50 per cent of the population below 20 years and 60 per cent below 30 years, Pakistan is poised for a ‘demographic dividend’, with its workforce growing at a faster rate than total population. This trend is estimated to continue for the next 30-40 years, depending upon the country’s pace of development. Pakistan’s population is projected to reach a staggering 350 million by 2050, almost double its present size, not a very encouraging indicator by itself. But the projected age structure in various demographic studies shows a sizable share to be occupied by the working age group progressively.

On a regional level, demographic changes are evident in other countries like China and India as well. China is now in the post-transitional phase with its population below 14 years declining, compared to that above 65 years which is fast increasing. China’s economic rise in the past decades, owes substantially to its demographic change that occurred early on and also the fact that it channelised its labour force effectively to boost its export-oriented industry, a policy adopted earlier by the East Asian Economies with their outward looking strategy coupled with plentiful supplies of adaptive labour force that helped them create their ‘economic miracles’. China is now faced with the next step in the process, one of an aging population and a shrinking workforce. Labour is already becoming expensive in China.

India is expected to receive maximum demographic advantage in the next few decades. With 25 per cent of the projected increase in global working population estimated to occur in India, it is poised to add over 300 million working age people to its ranks by 2040, making it the largest contributor to global workforce in the next 30 years. The challenge for both Pakistan and India is again to catalyse and capture the true strength of their burgeoning work force through effective policies in the coming decades.

So, how can Pakistan benefit from this opportunity? The immediate challenge is to educate and provide technical and professional training to its work force. Next is the creation of productive jobs in the economy through targeted expansion and growth. Pakistan should seek mutual investment opportunities with other countries in the region. But trade will spur growth and economic activities only if export-oriented policies provide the required impetus to the industry and businesses to move into high value added processes and up the value supply chains. With failing power, gas and water infrastructures, essential inputs to any industry, the challenges are varied and many.

A successful outcome will finally depend on the economy’s ability to absorb the multiplying work force into productive employment. This requires a proactive approach from policy makers to develop a comprehensive framework for infrastructure development and manpower training. The immense benefits and equally innumerable risks involved have to be timely realised.

Published in The Express Tribune, October 18th, 2011.

Facebook Conversations

Reader Comments (22)

  • fahim
    Oct 17, 2011 - 9:29PM

    we are just busy producing more and more, as well as eliminating more and more (those who disagree with our view), all based on religion. I dont think such matured approach to population control and channeling workforce will ever work for a country like us, which has not only completely failed economically, but is also totally bankrupt in modern ideas, education, health, wisdom…

    Recommend

  • Truth Seeker
    Oct 17, 2011 - 10:12PM

    Honest but futile attempt, as the policy makers are aware of the fact that
    ‘Productive Industry’ base at human couple’s level in Pakistan is so vast that huge tangible improvements in other sectors will not be able to create even trivial benefits for the public. Draconian measures to control population growth are needed to achieve those results projected by Ms. Bokhari. Why! look at the chart below and decide:

    Year World Population Addition
    8000 B.C 5,000,000
    3000 B.C 15,000,000 10,000,000 (5,000 Years)
    1 A.D 200,000,000 185,000,000 (3,000 Years)
    1800 A.D 1,000,000,000 800,000,000 (1,800 Years)
    1920 A.D 2,000,000,000 1,000,000,000 ( 120 Years)
    1960 A.D 3,000,000,000 1,000,000,000 ( 40 Years)
    1968 A.D 3,500,000,000 500,000,000 ( 8 Years)
    1999 A.D 6,000,000,000 2,500,000,000 ( 31 Years)
    31/10/2011 7,000,000,000 1,000,000,000 ( 12 Years)

    If the whole world policy makers have not succeeded to reign in this dragon, how can policy makers of an incompetent and ineffective government will do this miracle?

    Recommend

  • Oct 17, 2011 - 10:15PM

    What about madrassas and eduction provided by them? Can they reap the benefits of this demographic “bulge”?

    Recommend

  • Truth Seeker
    Oct 17, 2011 - 10:37PM

    Honest but futile attempt, as the policy makers are aware of the fact that
    ‘Productive Industry’ base at human couple’s level in Pakistan is so vast that huge tangible improvements in other sectors will not be able to create even trivial benefits for the public. Draconian measures to control population growth are needed to achieve those results projected by Ms. Bokhari. Why look at the chart below and decide:

    Year World Population Addition
    8000 B.C 5,000,000
    3000 B.C 15,000,000 10,000,000 (5,000 Years)
    1 A.D 200,000,000 185,000,000 (3,000 Years)
    1800 A.D 1,000,000,000 800,000,000 (1,800 Years)
    1920 A.D 2,000,000,000 1,000,000,000 ( 120 Years)
    1960 A.D 3,000,000,000 1,000,000,000 ( 40 Years)
    1968 A.D 3,500,000,000 500,000,000 ( 8 Years)
    1999 A.D 6,000,000,000 2,500,000,000 ( 31 Years)
    31/10/2011 7,000,000,000 1,000,000,000 ( 12 Years)

    If the whole world policy makers have not succeeded to reign in this dragon, how can policy makers of an incompetent and ineffective government will do this miracle?

    Recommend

  • Abbas from the US
    Oct 17, 2011 - 10:50PM

    Very optimistic take on the increasing Pakistani population forcasted to touch 339 million in 2040. The flip side is that an increasing male youth population that does not see an economic future in their destiny could also be available as cannon fodder to the Jihadis. As for the female population increasingly joining the work force, at this point there is a gloomy outlook as to whether the female population will be allowed to freely join the vocation of their choice or be relegated to permanent servitude of their chauvanistic male masters that is their current destiny.
    Even if this rosy picture turns out to be true, resources will have to be made available in terms of health, education and housing to fullfill expectations of this emerging middle class. Further, if the long awaited prosperity were to finally materialize that Pakistanis have dreamed of for a few generations now, the birth rate that produces this booming population would also suffer a period of decline with increasing education, along with similar problems that China faces today of the dependency ratio, would be forced onto economies like India and Pakistan when it would be a similar situation in a few decades.

    Hopefully indviduals trained in the planning side of the public administrations like the writer, would be able to deliver.

    Recommend

  • faraz
    Oct 17, 2011 - 11:50PM

    If we had been living in medieval era, with millions of indoctrinated people in gun carrying age (15-64 years), we could have launched a military offensive at a global scale, like the Mongol invasions. But in the 21st century, this will only become a dividend for terrorist, sectarian, ethnic, separatist and criminal gangs

    Recommend

  • Talha
    Oct 18, 2011 - 12:33AM

    But how many of these youths will become part of the good Taliban and shun the bad Taliban.

    Recommend

  • Arindom
    Oct 18, 2011 - 2:02AM

    350 million and 60% below 30 years?! All the more reason for US to produce more drones!!

    Recommend

  • gp65
    Oct 18, 2011 - 2:22AM

    @Truth Seeker:
    “If the whole world policy makers have not succeeded to reign in this dragon, how can policy makers of an incompetent and ineffective government will do this miracle?”
    The populations has not only stopped growing but started declining for many countries in the world. This includes most West European countries, Japan, Russia, Singapore etc. Even in India where progress has not been as good in lowering fertility as some othe rplaces, a woman in 1960 used to give birth to 6 kids on an average. The numberhas come down to 2.3 now.

    Anyway this article is ot about how to reduce fertility. But rather given that the working age population is going to swell, how can we proactively plan for this situation so that the country is able to harnes this youth bulge to the advantage of the country overall as well as its individual citizens.

    Recommend

  • Santosh
    Oct 18, 2011 - 3:29AM

    @faraz: Pakistan certainly has the millions of indoctrinated gun-toting masses, but there is no unifier and master strategist like Gengiz Khan. Pakistan has already launched a number of military offensives – 1948, 1965, 1971, 1999 against India as well as unofficial offensives in support of the Mujahideen and the Taliban in Kashmir and Afghanistan. Unlike the Mongols though, it hasn’t captured anything, though it has achieved a Mongol scale destruction of Afghanistan.

    Recommend

  • BruteForce
    Oct 18, 2011 - 10:48AM

    India is all set to exploit this advantage. It was the fastest growing Country in the World. The goal is to create enough jobs and a bit more to satisfy the people who are coming out to the job market every year. India is doing that. Pakistan is not.

    India is grew at a massive 10% last year, Pakistan at 2.5%. There is no comparison.

    Why is it so scary for Pakistan? Because it will get stuck or will continue to be stuck in a vicious cycle. Poverty -> High population growth -> low literacy -> not enough jobs -> low growth -> poverty. The cycle will continue.

    India has successfully broken this cycle. Yet, a lot more needs to be done. This decade will define India, and indeed the whole World because of it. Recommend

  • Ahmed
    Oct 18, 2011 - 11:47AM

    In 2005, Goldman Sachs had published a paper called the Next 11, countries with high potential of becoming the world’s largest economies in the 21st century. It would be helpful to revisit their criteria and see how many are still applicable to Pakistan. https://secure.wikimedia.org/wikipedia/en/wiki/Next_Eleven

    Recommend

  • Yusuf
    Oct 18, 2011 - 1:43PM

    Honestly, we do not see good future by working or investing in Pakistan. Sorry state we missed all types of sector rise like synthetic, plastic, steel, medicine, or downstream agriculture. Look, where Thailand, India, Indonesia, South Korea and Vietnam is now. Youth being wasted by running away from country Pakistan, like manufacturing we are now in exports of our educated youth. How far Pakistan policy makers bend for economic change that is being asked continously in all circles. We have a Grid Block purposely created, it is absolute maddening to work in an indusrial environment without basic delivery of basic needs of industries, trade, or shop keeping. Taxing to gain more for ” their own good,” and not for the 99 percenters of Pakistan. Its time we take honest as well as sincere approach for benefit of common Pakistanis by changing what is NOW. Lets not loose or give away the coming 21st Century. The Burden of taxation in Pakistan should be Shared, Inequality will lead to greater disaster.Recommend

  • Saad Ullah
    Oct 18, 2011 - 2:43PM

    i can feel that just PTI has the potential to capitalize the demographic trnd of Pakistan! Recommend

  • ukmuslim
    Oct 18, 2011 - 3:39PM

    last summer i went for a cruise holidays for 14 days from UK to Norway. on that cruise, (receptionists, radio officers, communication officers, chefs in the kitchen in back, chief engineer, ranked electrical and michanical engineers, sailors) atleast 60% but not less was skilled indian workforce. and rest were east europeans and west europeans. its amazing that india is supplying english speaking skilled workforce for running the businesses.

    now in pakistan’s case, talibani style rule will force women not to study or work. this single rule, will cut the workforce by half. rest of the workforce (men) mostly inclined to the extremism will not be a favourite choice (as employees) of global businesses. and to form major/global industry hub within coutry, you do not have resources or environment. current picture is not good.

    Recommend

  • Ali Tanoli
    Oct 18, 2011 - 5:22PM

    @ UK muslim,
    Its all about busniss indian english speaking labour force is much cheaper in the market
    and also indian govt does lot of afford providing jobs to there peoples and in pakistan our
    govt and army junta are just busy in loot so some one will have to fill in the gap u know
    what i am saying…

    Recommend

  • Rambo
    Oct 18, 2011 - 8:40PM

    @BruteForce – Stop boasting!! . . . . . Without exploiting the US jobs, you are shamefully nothing!!!!

    Recommend

  • ukmuslim
    Oct 18, 2011 - 9:05PM

    @Ali Tanoli
    thats the beauty of the competition and open market. not only ‘value for money’ is the prime factor but other factors like skillness, flexibility, adoptibility, availability, employability also play roles. modern businesses and its managements take such decisions after careful study of decision matrix. and every factor is in favor of indians. mostly all of the industries are short of skilled manpower and can’t find in europe. so they goes to india and comes back happily.
    sometime back, i heard a news that, established french winery employed 2 indian girls aged 20 and 23; because they couldn’t find competitive wine tasters. the girls were offerred hefty salary package, accomodation, car and other perks. world is finding indian skilled workforce with any combination of skills.
    now you being a pakistani, should more talk about your situation. or you don’t have any ?

    Recommend

  • Tariq Ahsan
    Oct 18, 2011 - 11:23PM

    Nice to read a competent and sober analysis of the subject that outlines the potential for progress as well as possible challenges. Unfortunately vulgar geopolitical propaganda using the words “bomb” and “dangerous place” often dominates mainstream media discussions of population re Pakistan in both Western as well as English speaking media in Pakistan.

    Recommend

  • jagjit sidhoo
    Oct 19, 2011 - 11:05AM

    Educated employable employed youth is a dividend uneducated unemployable and unemployed youth is a nightmare

    Recommend

  • BruteForce
    Oct 19, 2011 - 5:14PM

    @Rambo:

    I am not boasting but merely telling the truth. Boasting is when I lie. I challenge you to point out a single point.

    Why seek the truth when you cant handle it?

    Recommend

  • Oct 27, 2011 - 5:08AM

    Pakistan has the world’s sixth largest population, seventh largest diaspora and the ninth largest work force. With fertility declining and populations aging in the Europe and America, Pakistani talent pool is likely to play a much bigger role to satisfy demand for workers in the 21st century and earn valuable foreign exchange in the process.

    Pakistanis take education seriously. They spend more time in schools and colleges and graduate at a higher rates than their Indian counterparts in 15+ age group, according to a report on educational achievement by Harvard University researchers Robert Barro and Jong-Wha Lee.

    With rising urban middle class, there is substantial and growing demand in Pakistan from students, parents and employers for private quality higher education along with a willingness and capacity to pay relatively high tuition and fees, according to the findings of Austrade, an Australian govt agency promoting trade. Private institutions are seeking affiliations with universities abroad to ensure they offer information and training that is of international standards.

    Trans-national education (TNE) is a growing market in Pakistan and recent data shows evidence of over 40 such programs running successfully in affiliation with British universities at undergraduate and graduate level, according to The British Council. Overall, the UK takes about 65 per cent of the TNE market in Pakistan.
    Recommend

More in Opinion