Demographic dividend

  • Nepal needs to quickly come up with a decent policy if it is to benefit from its youth bulge
Demographic dividend

Jun 23, 2014-

The First National Population Conference was recently held in Kathmandu. The theme of the conference was ‘Communicating Population for Development Planning’. Its importance lay not simply in the inauguration by Honorable President Ram Baran Yadav but also in the relevance of the topics tied to Nepal’s current socioeconomic development, ie, the demographic dividend from the changing age structure. Nepal needs to urgently develop an appropriate policy to benefit from this increasing a demographic dividend.  

Reaping benefits

A demographic dividend or bonus refers to a period of approximately 20 to 30 years wherein the working-age population increases due to decreasing fertility and increasing life expectancy. This condition is recognised as a window of opportunity because it provides a temporary expansion of the labour workforce. It is critical to recognise this demographic dividend in time because experts believe there is a short timeframe for reaping the demographic dividend. Worse still, if we do not make use of this, it can end up being very costly and turn instead into a ‘demographic nightmare’.

In Nepal, the total fertility rate (TFR)—the number of children that would be born to a woman if she were to survive till the end of her reproductive years and bear children in accordance to current age-specific fertility rates—was more or less constant until the mid-80s, at around 6.3. It began to rapidly decline thereafter. The Nepal Demographic and Health Survey estimated the TFR to be 3.1 in 2006 and 2.6 in 2011. Due to the declining fertility rate and increasing life expectancy, the young population under 15 is decreasing but the relative size of the population in the 15-59 age bracket is increasing. The population pyramid of the country clearly shows that the new cohorts in recent years are smaller. So there is no doubt that Nepal is in a demographic transition and stands to gain its demographic dividend.

The important issue to be remembered, however, is that  the demographic dividend exists only for a short period. China provides a good example where fertility started to decline quickly in the 1970s. It effectively utilised its human workforce, which contributed 15 percent of China’s economic growth between 1982 and 2000. If we look at the examples of East Asian countries, myriad studies suggest that the demographic dividend accounts for one-fourth to two-fifth of East Asia’s ‘economic miracle’.

Population problems

According to the United Nations, rising unemployment among a country’s youth may indicate inadequate preparation to benefit from the demographic dividend. High unemployment, especially among the youth, wastes human resources and can lead to higher rates of crime, social unrest and political instability. Unfortunately, unemployment among the youth is currently very high in Nepal and the crime rate is increasing. And despite monumental changes, politics remain unstable. As a consequence, a large number of Nepalis continue to leave the country in search of employment—around 1,800 people everyday. Although remittance makes a significant contribution to the Nepali economy, in 2008, the Nepal Labour Force Survey reported that most of the money coming in is used to meet basic needs. Likewise, both social and developmental activities are less participatory, due to the lack of human resource in many parts of the country. That is why, it is not only the family and the community that bears the cost of labour migration but also the country.

Policy problems

However, it is still not too late to redress the situation. The afore-mentioned conference played a vital role in raising awareness among stakeholders, including policymakers. While the importance of a proper policy to reap the benefits of the demographic dividend was demonstrated in East Asia, we should not delay in formulating social and economic policies to reap the demographic dividend. Minister for Health and Population Khagaraj Adhikari recently mentioned developing a new policy to involve the population for sustainable development. There is hope that the process will start soon and that experts will be involved in the policy development and implementation processes.

If the appropriate polices are  put in place immediately and pursued dilligently, the country would be able to develop easily and quickly. Although political commitment is key, the participation of experts without any political interference is crucial for the successful formation of an appropriate policy and its implementation. If we cannot make use of this opportunity soon, it could be very costly for the country.

Paudel is a doctoral student in research methodology at the Prince of Songkla University, Thailand

Published: 24-06-2014 09:15

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