Page last updated at 06:06 CST6CDT, Wednesday, 23 June 2021 PH
The environmentalist affirms that a small population is good news because it would decrease the carbon footprint on our planet. Mr. Grantham, who is co-founder of GMO Asset Management, deflates such optimism. He said that to fight climate change, we still have a long way to decarbonize global industrial systems and reduce CO2 in the atmosphere to its pre-industrial level of 280 parts per million from its probable future peak of more than 550 parts. This very ambitious target can only be achieved if the world can come out with every biological and mechanical innovation of which it is capable. Unfortunately, lower economic growth caused by a shrinking and ageing population would surely weaken, not only the necessary innovation and investment, but also the resolve to do it. Much fiscal resources and regulatory reforms would be needed to get the job done. A nation on irreparable demographic decline and rapid ageing will not have the fiscal resources nor the political will to do what is necessary to combat the negative impact of climate change.
The VUCA (Volatile, Uncertain, Complex and Ambiguous) global environment is not helping to reverse the contraceptive mentality that is prevailing in the developed countries. In China, there are attempts to encourage married couples to have more children than the one child policy permitted in the past. The experience since 2016, when couples were allowed to have two children, has not been very encouraging. Fertility rates still remain below replacement. We should not be surprised with this result. Singapore, which has a similar Confucian culture as China, had been trying to reverse the declining fertile rate for at least two decades since the late Lee Kuan Yew admitted his mistake in imposing the Stop-at-two policy during his tenure as Prime Minister in the last century. The fertility rate of Singapore has been stubbornly stuck at below-replacement levels despite all the economic and other incentives given to couples to have more children. It has been a common experience that in countries in which the Government played an active and oftentimes aggressive role in inculcating the contraceptive mentally among married couples, it is practically impossible to reverse such a mentality because of socio-economic factors, i.e. the increasing tendency for both husband and wife to work outside the home, the high cost of living, the postponement of marriage to a much later age, and the many uncertainties in the economic environment that have been accentuated by the pandemic. Fortunately for Singapore, however, it has a very small population; it reached First World level before it suffered from the demographic crisis; it can rely on the best and brightest minds in the Indo-Pacific region to supplement its highly educated workforce; and it has been very successful in creating a very attractive environment for attracting huge amounts of Foreign Direct Investments. Most developing countries, especially those with huge populations , will find it hard to replicate these favorable conditions
Our young and growing population is, without doubt, the main reason why we can look forward to a robust recovery of anywhere from 8 to 10 percent GDP growth, starting 2023 when we can expect the pandemic to be put under reasonable control after we are able to acquire herd immunity. Our 112 million level of population by then would enable us to rely on an increasing number of Overseas Filipino Workers who would be in great demand in such sectors as health and wellness, caregiving, domestic services, travel and tourism, seafaring, education, business services , and other sectors requiring low and middle-level skills that will still proliferate in the advanced countries, despite the prevalence of Artificial Intelligence and robotization. OFWs and the BPO-IT sectors will account for an increasing percentage of our GDP. Our domestic market will consist of more upper-middle income households who would drive the strongest engine growth of the Philippine economy, which is consumption. A large earning population would also be a source of domestic savings that, together with increased Foreign Direct Investments, can fund the Build, Build, Build, program that will intensify over the next decade or so. We badly need these savings and FDIs because after the pandemic is put under control, we have to address the high level of debt that our Government is incurring during this crisis. We will no longer be able to borrow more so that we must rely on our own savings and on the inflow of foreign capital to fund our capital-intensive investments especially in telecom, media, infrastructures and other public utilities.
Over the longer term, we must make sure that we do not share the same fate as practically all countries that have developed before us. They all seem to have committed demographic suicide, experiencing precipitous declines in their fertility rates and very rapid ageing. There are already signs that our own fertility rates are dropping. We have to make sure that over the long run they do not drop much below the replacement rate of 2.1 births per woman. Let us learn from the experiences of the European countries like Spain, Italy and France which are culturally similar to us. In an editorial that appeared in the Financial Times (March 11, 2021), we read: “…a society where people cease to have children is often one in palpable decline, where growth stagnates and dynamism has dried up…In contrast, among high-income countries at least, higher birth rates tend to go with more optimism and keenness to plan investment in the future. The challenges of expansion are far preferable to those of decline…Policies can make a difference. In the short run, more decisive economic policy to shorten downturns and extend upswings should make couples more confident about having children. Over time, states that share the cost of childcare, offer parental leave, and support mothers to return to work tend to encourage higher birth rates—families have especially struggled with school closure…Economic policymakers should, therefore, see the fertility drop as an additional call to action, to fully power and secure a post-pandemic recovery.”
True, we are still a low middle-income country that is about to transition to an upper-middle income one, much behind our European counterparts. It is never too early, however, to make sure that we do not plant the seeds today of extreme fertility decline as we apply the wrong solutions to our existing poverty problem. The last thing we should do is to succumb to the propaganda of the birth control advocates, especially the United Nations and the World Bank, to address the very serious problem of high rates of teenage pregnancy with their usual formula of disseminating indiscriminately contraceptive devices among teenagers so that they can prevent unwanted pregnancy. That is like making illegal drugs widely available to drug addicts so that we can help them rid themselves of the addiction. The emphasis should be in strengthening the virtues of temperance and chastity among the young, using all the resources of religious and ethical beliefs about the sacred nature of sex and the inviolable institution of marriage, as articulated in the Philippine Constitution of 1987. We cannot take the defeatist attitude that it is the raging hormones of the adolescents that will determine their decisions about sexual intercourse before marriage and, therefore, have recourse to the easy solution of spreading widely the use of artificial contraceptives among the youth. The country that followed this path, with the advice of the international organizations, was Thailand. Today, Thailand is one of the unfortunate developing countries that are already ageing very rapidly before becoming rich (the biggest one is China). (To be continued).