Written By: Farrukh Saleem
Pakistan's median age of 21.2 years – with a global range of 48.9 for Monaco and 15 for Uganda – makes Pakistan one of the youngest of countries in the world. By 2050, with an annual growth rate estimated at 2.07 percent, Pakistan is expected to become the fourth most populous state. Pakistan's population growth rate, its age structure, income distribution and the development of its human capital shall be the principal determinants of Pakistan's productive capacity.
In the 1960s, population growth rates in the East Asian region began decelerating, the working age population began expanding and the age dependency ratio went down sharply. For the following thirty years, South Korea, Taiwan, Singapore and Hong Kong managed to attain exceptionally high rates of economic growth and came to be known as the Four Asian Tigers.
Ireland was once one of the poorest of European economies. Over the 1995-2007 period, the Irish economy went through a phase of rapid economic growth that transformed Ireland from one of the poorest European economies to among the richest. Celtic Tiger, a term coined by Morgan Stanley, the global financial services entity, had demographic transition, is one of the most powerful of drivers behind that rapid economic growth. In the 19th century, population growth rates in Europe began decelerating, the working age population began expanding and the age dependency ratio went down sharply. For the following several decades, Europe managed high rates of economic growth.
Pakistan's population growth rate is decelerating, the working age population is expanding and the age dependency ratio is on its way down. All of these factors point towards a demographic transition with the potential of a huge demographic dividend resulting in a “rise in the rate of economic growth due to a rising share of working age people in the population.” Pakistan, at 186 million, is the planet's sixth most populous country behind China, India, the United States, Indonesia and Brazil. Over the past six decades, Pakistan's urban population has increased by more than sevenfold whereby close to 40 percent of the population is now urban making Pakistan the second most urbanized country in South Asia.
Pakistan's median age of 21.2 years – with a global range of 48.9 for Monaco and 15 for Uganda – makes Pakistan one of the youngest of countries in the world. By 2050, with an annual growth rate estimated at 2.07 percent, Pakistan is expected to become the fourth most populous state. Pakistan's population growth rate, its age structure, income distribution and the development of its human capital shall be the principal determinants of Pakistan's productive capacity. According to the Economic Survey 2010-11, “Pakistan's population has been growing at a decelerating pace but still Pakistan has one of the highest population growth rates in the world. Population growth has decelerated from 3.06 percent in 1981 to 2.07 percent in 2011.” Between 2014 and 2040, Pakistan's working age population is expected to expand.
According to the Economic Survey 2010-11, “Empirical evidence suggests that a large part of East Asia's spectacular economic growth derives from demographic transition, i.e. from working age population bulge because those countries have invested in their population and converted them in highly skilled human capital. This transition from a young to prime age population presented a demographic gift because East Asia has had relatively fewer young population compared with earlier periods which resulted in small group of dependents/non productive population. In countries where an increasing share of the population is of working age, economic growth per person tends to be highest and national saving tends to rise.”
Jack Goldstone, a professor in the School of Public Policy at George Mason University and a consultant to the U.S. Government, has argued that a fast growing young adult population unable to find productive employment is a recipe for “social unrest, war and terrorism.” A study by Population Action International suggests a “strong correlation between countries prone to civil conflicts and those with burgeoning youth populations. Social scientists label this demographic profile 'youth bulge,' and its potential to destabilize countries in the developing world is gaining wider acceptance among the American foreign policy community. The theory contends that societies with rapidly growing young populations often end up with rampant unemployment and large pools of disaffected youths who are more susceptible to recruitment into rebel or terrorist groups. Countries with weak political institutions are most vulnerable to youth-bulge-related violence and social unrest.” Demographic dividend has to be reaped within a demographic window of opportunity. The Commission on Population and Development defines that window as the period “when the proportion of children and youth under 15 years falls below 30 percent and the proportion of people 65 years and older is still below 15 per cent.”
As per Woodrow Wilson International Center for Scholars, “Pakistan's population promises to remain youthful over the next few decades. In the 2020s, the 15-24 age bracket is expected to swell by 20 percent. Pakistan's under-24 population will still be in the majority come 2030. And as late as 2050, the median age is expected to be only 33.” Europe's demographic transition opened up the demographic window that remained open for some five decades. The Chinese window opened up in 1990 and is expected to remain open till 2015. Pakistan's window of opportunity won't remain open forever and Pakistan would have to build schools, hospitals, housing and roads – and build them fast. Pakistan would have to keep its youth educated, healthy and employed.
For Pakistan, would there be a demographic dividend or would it be a youth bulge? According to the Pakistan Institute of Development Economics: “For economic benefits to materialize, there is a need for policies dealing with education, public health, and those that promote labour market flexibility and provide incentives for investment and savings. On the contrary, if appropriate policies are not formulated, the demographic dividend might in fact be a cost, leading to unemployment and an unbearable strain on education, health, and old age security.”