Page last updated at 06:05 CST6CDT, Wednesday, 23 June 2021 PH
The pandemic has highlighted the greatest economic treasure the Philippines has, its human resources. We continue to have a young, growing and English speaking population that is referred to as our demographic dividend. In contrast, all developed countries as well as some of the emerging markets in Asia like China, Thailand, Vietnam and Indonesia are already showing signs of rapidly falling fertility rates and ageing that can dampen their economic growth in the next decade or so. Heavy pressures on pension funds and social security systems, labor shortages, and dwindling domestic markets are already worrying the leaders of even the most populous country in the world, China. Because of unwise population control programs in the past, China is already rapidly ageing before becoming rich. We should be thankful that population control programs that some of our past Governments tried to impose were not successful. Our population today of close to 110 million is still expected to swell to 142 million in 2045 according to the Philippine Statistics Authority. We will still be experiencing population growth of 0.65 percent annually during the 2040 to 2045 period. Our East Asian neighbors will have fertility rates much below the replacement level of 2.1 births per woman. These low birth rates are coupled with an ageing population in which those who are over 65 account for 20 to 30 percent of the total. For example, Japan and South Korea are predicted to see their population drop by more than half by the end of this century. In contrast, even in 2045, Filipinos over 65 will be only 11.4 per cent of the total, resulting in a ratio of young to old that will still be very manageable. Because of very low fertility rates and a high percentage of the population over 65 years of age, our Asian neighbors (not to mention countries in the European Union) will be weighed down economically by a huge proportion of senior citizens and very few workers to take care of them This will require these countries to open up to immigrant workers like our OFWs, with the consequent cultural and social frictions we are now witnessing even in so-called democratic America where some of the most productive citizens, the Asian Americans, are objects of discrimination and hatred.
In a series of articles in the Financial Times (March 11, 2021), there were reports of how the COVID pandemic delivered falling birth rates in the heart of Europe, already suffering from serious demographic declines even before the pandemic. France was one of those hardest hit. In January 2021, nine months after the country was stuck in its first COVID-19 lockdown there was a 13 percent decline in the number of births compared to January 2020. This was especially noteworthy because France has traditionally enjoyed the highest fertility rate in the 27-member European Union (EU). It marked the biggest decline in births since the abrupt end of the baby boom in the 1970s. An official from the country’s Institute of Demographic Studies threw cold water on the romantic notion that couples make more babies when they are locked down at home for months on end. She quipped wryly: “There are a lot of fantasies that when couples find themselves at home they will have more children. But that is something of an idyllic vision.” I would be very interested in any forthcoming data from our Population Commission about how many babies were born from March 2020 to March 2021! As a matter of fact, predictably the United Nations—the incorrigible purveyor of prophecies of doom and gloom about the so-called population explosion—already made a negative comment about what they noticed as a birth boom in the Philippines during the pandemic. According to the Financial Times article I referred to, the UN was lamenting as a cause of the baby boom the difficulty of obtaining contraceptives, their usual panacea to the problem of mass poverty in developing countries.
France was not the only one suffering from an acceleration of fertility declines during the pandemic. Preliminary data also showed sharp declines in the number of births in Spain and Italy, two countries with ageing populations (in fact, the high mortality rates from COVID-19 in these countries was partly due to the large number of senior citizens who succumbed to the sickness). Italy, the first European country to feel the full force of the COVID-19 crisis, recorded 21.6 percent fewer births in December—nine months after the country went into lockdown—compared with the same month in 2019. What made matters worse was that the gap between the number of births and number of deaths during the same period widened greatly, thus leading to a big decline in total population. The Italian Statistics Office linked the collapse in births to the drop in the number of weddings, which fell more than 50 percent in the first 10 months of 2020.
The authors of the articles observed that if the “baby bust” that occurred in many European countries during the pandemic were to persist, it would have profound implications for economies and societies, affecting everything from immigration to education and pensions. In fact, in an Opinion article that appeared in the same publication on March 13, 2021 (The Severe Cost of the World’s Baby Bust by Jeremy Grantham), the long-term implications of fertility declines were more fully discussed. The pandemic just worsened a trend that started many decades ago. As Mr. Grantham observed: “The worldwide fertility rate has already dropped more than 50 percent in the past 50 years, from 5.1 births per woman in 1964 to 2.4 in 2018, according to the World Bank. In 2020, the 20 percent shortfall below replacement rate in US fertility, together with low net immigration, produced the lowest population growth on record of 0.35 percent, below even the pandemic of 1918.”
Mr. Grantham spelled out in the clearest terms possible the adverse impact of lower population growth, which has been unfortunately the obsession of world organizations like the United Nations, the World Bank and even private institutions like the Rockefeller Foundation and the Bill Gates Foundation. Let me spell out what, according to Mr. Grantham, are the dire effects of slowing down population growth: “Lower population growth directly causes slower economic growth. A falling fertility rate also increases the proportion of older adults in the population. In China, for example, the percentage of people aged 60 or over has risen from 6 percent in 1970 to 17 percent today and is predicted to reach an astonishing 35 per cent in 30 years…This trend will result in a greatly increased burden on pension and medical systems as fewer workers struggle to look after a growing number of retirees. With the old taking up more resources, and the shortage of young workers requiring more capital spending to maintain productivity, the current era of excess savings is likely to end…This is likely to lead to the higher inflation and real interest rates typical of the pre-2000 era. This would almost certainly be accompanied by a reversion towards the lower average levels of asset prices that characterized the 20th century.” (To be continued)