Millennium Post

Asset or liability?

Asset or liability?

Two of South Asia’s greatest powers — India and China — are facing population challenges of differing shades. The way these two countries will manage their respective population problems/opportunities in the following decades will also by and large affect the entire globe. China is witnessing a strange slump in population while India is projected to surpass China in a couple of months to become the most populous country in the world. Last week on Tuesday, China’s National Bureau of Statistics reported that the country’s population declined by 8,50,000 to reach 1.4118 billion — the first decline in the past six decades. Shrinking population is not an odd phenomenon, and is rather a part of the larger population cycle. For China, however, the problem is the rapid pace at which its population is declining. India, on the other hand, is just marginally behind China in terms of numbers but its population is on the rise. The United Nations and the Institute for Health Metrics and Evaluation have estimated that India’s population will peak around 2050 at nearly 1.6 billion and would start declining steeply after that to come down to as much as 1.1 billion by 2100. More importantly, India has an enviable young demographic dividend, which is one of the reasons behind the so-called “population explosion.” China, on the contrary, by 2050, will witness the population of the elderly peaking at 487 million, accounting for 35 per cent of the overall population. The country’s National Working Commission on Ageing apprehends that healthcare spending on elderly will claim 26 per cent of the GDP by 2050. Everything said and done, China is in a vulnerable spot and India has a tactical advantage of sorts but it doesn’t mean that China is approaching a doomsday situation and India’s growth prospects can be taken for granted. Challenges are plenty for both nations. From being a nation that formally shed its long-held position of fostering population growth in 1980, by announcing the one-child policy, China began to make attempts to increase birth rates nearly two decades back and formally scrapped the one-child policy in 2016. In 2017, it announced a two-child policy and rolled-out three-child policy in 2021. In addition, China also showed intent to announce a host of measures to bring down economic expenses on healthcare and education. All this government backing, it seems, has been proved inadequate to reverse the declining trend of population growth in the country. Parallel to the efforts of arresting the decline in population figures, Chinese policymakers should realise the need to focus on boosting productivity with the human resources they have in their kitty. Experts suggest that China might still have ample human resources, a large part of which is sub-optimally utilised. Also, the adverse impacts of population shrink are not likely to set in immediately. China has ample time to ward off potential hikes in wage rates and consequent withdrawal of global investments. There are numerous instances of countries coming out from the problem of shrinking and ageing populations successfully. Japan and South Korea are shining examples. All that China needs to do is to tick the right boxes, policy wise. As far as India is concerned, it unquestionably has an invaluable human resource potential. Much depends on the policymakers to turn this resource pool into an asset rather than a liability. Multiple apprehensions loom large on this front. In the first place, the quality of this vast pool of human resources — measured in terms of health and education — is not very encouraging. Secondly, even for the educated and healthy sections, employment opportunities are hard to come by, as reflected from the high unemployment rate and low labour force participation rate (LFPR). Thirdly, several Indian states, particularly those ruled by the BJP, are ambiguously rooting for population control measures even when the national fertility rate is within the desirable limit. Fourthly, the population control measures are allegedly targeted towards a particular community. Such sort of internal discrepancy is bound to harm national prospects. Fifthly, as indicated by the recent Oxfam report, Survival of the Fittest, inequality has been at a threatening level in the country — hollowing it from inside. How can a nation achieve optimal productivity if the majority of the population simply doesn’t have the resources? Looking at the overall scenario of India and China, it can be said that the Malthusian principle of large population being a problem stands disapproved. It is all about how nations bring the best out of their human resources. The challenge before both India and China is to optimally utilise their human resources, though the nature of their motivation is different.

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