Part one of a series on youth demographics in South Asia.
Population growth and demographic trends play a key role for the economic and geopolitical status of nation-states. In South Asia, the growth of populations under 30 mark a pivotal tipping point. Where governments can engage a growing youth population, there is great potential for economic growth. However, the failure of states to provide opportunities to a growing youth population could signal the onset of frustration, disengagement, and extremism. Within the region, India and Pakistan represent these two potential paths and illustrate how national policy can transform a burdensome swell in the youth population, or a youth bulge, into a demographic dividend.
India, South Asia’s most populous nation, currently ranks 2nd in the world for largest population at roughly 1.3 billion. While India’s population is slated to surpass China’s by 2028, it is not growing very rapidly as a whole. Rather, it is the share of India’s youth population that is swelling. As of early 2013, greater than half of India’s population was under the age of 25, and an enormous 65% of the population was under 35. Research from the Lowy Institute for International Policy projects that by 2020, the average age of Indians will be 29, considerably younger than nations comparable in size like China and America, where the average age is 37.
With an increasingly youthful population, India also harbors a shrinking elderly population. By contrast, countries like China and Japan face an aging and increasingly non-working-age population that will depend on the younger segments to sustain itself. Insofar as India can capitalize on its growing youth population with a lower share of dependents, the nation will excel economically. At the same time, there are a number of examples of countries around the world where a massive youth population lacking economic opportunity or the skills to transition effectively into the labor force, grow discontented and react against the state.
Danielle Rajendram, of the Lowy Institute, comments extensively on this fork in the road within the context of India. India’s youth population is expected to grow until 2040, and the International Monetary Fund (IMF) estimates that should India go the route of demographic dividend, the young workforce will “produce an additional 2 percent per capita GDP growth each year for the next twenty years.” Such potential depends on whether India can create enough jobs to employ the working-age population.
However, India’s education indicators are the lowest in all of the G20 members and the nation’s labor laws are incredibly rigid. The Global Competitiveness Index for 2009-2010 ranked India, referenced as the world’s poorest young country, 83rd of 133 countries in terms of labor market efficiency. By comparison, China comes in 32nd on this World Economic Forum indicator. Labor market inefficiencies in India result in a limited and dysfunctional manufacturing sector. David Karl, of the Foreign Policy Association, says the sector “remains largely skill- and capital-intensive – a disconcerting anomaly given India’s raw demographic bounty.”
Moving forward, India must pay serious attention to the allocation of labor and resources for effective economic growth and development. India’s former Minister of Human Resource Development, Kapil Sibal, notably stated in 2013 that, “it will be a dividend if we empower our young. It will be a disaster if we fail to put in place a policy and framework where they can be empowered.”
Neighboring Pakistan also houses a rapidly growing population and, like India, perilous prospects for economic growth. Pakistan’s current median age is just 22; the nation’s share of youth population swells further than India’s. In addition, Pakistan’s overall population has almost doubled in the last twenty years. While the total mass of Pakistan’s population does not compare with India’s, the population is growing at a faster rate. This population growth is due in large part to Pakistan’s high female fertility rate, which is gradually leveling off in other parts of South Asia. India’s fertility rate is nearing the replacement rate (2.1 births per woman) at 2.55 whereas Pakistan’s fertility rate is 3.3 as per the 2011 World Development Indicators.
The youth bulge will pose security threats in varying dimensions throughout South Asia, including in India, Bangladesh, and Pakistan. In the context of Pakistan, where democracy has struggled to find a foothold since the nation’s inception, the youth bulge will exacerbate an already challenging transition to liberal democracy. A burgeoning youth population mixed with weak state capacity may lead to conflict and civil unrest.
In later posts, I’ll expand on threats to India and Pakistan of the growing youth population, and highlight areas, like education and labor markets, where substantive policy reform can pave the way for economic growth instead.
Image Credit by Anurupa Chowdhury via Wikimedia Commons.