By 2020, the global south will be home to nine out of every ten people around the world. At the same time, at least one in five in Italy, Germany and Japan are 65 or older. Two worlds that couldn’t be any further apart. The reasons for these contrasting realities are complex; cultural distinctions and education quality are two major factors that can possibly explain such paradoxical demographics. As birth rates have plunged in Europe, there has been a subtle shift in how we look at global population dynamics over the past decade or so. We once viewed countries like India and Indonesia as densely and overpopulated. We now covet their youthful populations. Investors, think tanks, and the media are increasingly bullish about a large, young population being a key engine for economic growth. The shrinking populations of Japan, Italy, Spain and South Korea, in particular, have raised concerns, about how growing dependency ratios, heightening pension payments and increasing medical costs will slow economic growth.
Delving deeper into the numbers behind the global South’s population rise, it is important to note that Africa has the most under-20 population in the world currently and India has the world’s largest youth population (10-24 years). Particularly, India’s plausible workforce is predicted to go from 885million to 1.08 billion in the next 20 years. Indonesia and the Philippines can similarly boast of a wide-base population pyramid. Such demographic projections have led to optimism regarding their futures. On the flip side, declining birth rates in Scandinavian countries, Italy and Japan have led to health officials and politicians to rally a cry to increase the population. Italy’s health minister, Beatrice Lorenzin, has on multiple occasions called the country a dying one and has been quite vocal about boosting Italy’s plummeting birth rate (8.4 births for every 1,000 citizens in 2015). She went so far as to promote a Fertility Day Campaign, which has been criticised in various quarters as being sexist, denigrating and failing to grasp the real factors behind the low birth rates.
Compare this situation to India or Egypt or Nigeria and the image couldn’t be more different. National and international news outlets are gripped by the dramatic expansion of working age populations in these countries, fuelling investment optimism in the manufacturing and services sectors and raising the feel-good factor publically. Many have even labeled this century as an Asian or African one. Unsurprisingly, European and US economies are concerned. However, their private sector is excited by the new opportunities presented by an expanding youth population in the developing world. So, are these happy days for countries like India, Indonesia and Nigeria? Not quite.
The public and media-driven optimism surrounding these demographic projections has created an environment where we’re starting to forget the difference between potential and reality. Global investment firms and consultancies in their monthly or annual reports of global economic trends and investment opportunities rely on and engage in short-term and long-term predictions. This optimism regarding youthful populations urgently needs a dose of reality and caution. A burgeoning young population is as likely to be a bane as much a boon. This is especially the case for countries like India, Pakistan, Indonesia and Nigeria. Consider India, for instance. With a weak, out-dated, unequal education system that stifles creativity and critical thinking, India immediately needs an education reform if it wants to realise its demographic-driven economic potential.
These countries have two other potential slippery slopes to contend with, which are arguably more difficult to address: automation and socio-cultural diversity. Ethno-fractionalization indices compiled by researchers rank countries based on religious, linguistic and ethnic diversity. Most African countries feature high on such measures and India and Indonesia aren’t far behind. With greater diversity comes a higher probability for social unrest, instability and violence, and has been proven throughout history. Combining high diversity with a large youthful population is a risky proposition, where social unrest can instantaneously spark conflict.
Automation is another obstacle that can derail demographic potential. Many semi-skilled jobs in the manufacturing sector that employ millions of people in India and Indonesia are heading towards automation. As the working age populations of these countries keep expanding, not only do the number of jobs have to rapidly increase but also the types of jobs. The past mantra of global corporations outsourcing of manufacturing to developing countries, thus providing millions of jobs, is fading and will not be sustained with developing technologies. The foundations of the international economy are increasingly moving towards automation, calling education systems to keep up. Rising unemployment in South Asia and sky-high levels of joblessness in the Middle East, is daunting and can trigger surges in crime and extremism, as the youthful populations continue to expand.
Investment in education, inclusive and stable governance and dynamic job creation are fundamental to realise India, Indonesia or Nigeria’s demographic potential. Otherwise, we could be heading towards unprecedented civil conflict and social division that can threaten the long-term futures of these countries. Fulfilling such demographic potential is a challenging prospect that should keep governments on their toes. A youthful population can translate into economic power, if and only if governance is responsible, accountable and able to undertake important reforms. This is a watershed moment. We would do well to not lose ourselves in the hype and optimism and squander such an opportunity.