Pakistan's Demographic Challenge

All countries that have had high rates of fertility and, therefore, high rates of population growth now have very young populations. Pakistan along with almost all countries of the Muslim world falls into this category.

For several decades the rates of fertility ‚ the number of children born per woman in the reproductive age ‚ was more than five. It is only when the fertility rate falls to 2.1 that a population reaches the level of replacement. Below that rate the size of the population begins to decline as is happening in Japan and in most European countries.
A high rate of fertility combined with a high incidence of marriage as is the case in Pakistan has meant high birth rates. As death rates declined with better reach of health services and better availability of healthcare, the rate of population reached historic highs. In the 1960s and 1970s, population increased by slightly more than three per cent a year, one of the highest rates of increase in the world. At this rate of increase, the size of population doubles every 23 years which is what has actually happened.
Although some recent surveys suggest that the rate of fertility has declined in the last decade and the rate of population increase has dropped below two per cent ‚ it is perhaps 1.8 per cent in 2008 ‚ the population still remains very young.
The data in the accompanying table shows how the drop in fertility has begun to affect the age distribution of population. There is a noticeable decline in the increase in number of children in the age of 0-15 compared to the next age group, the young between the ages of 15 and 30. For the first group, the number increased by 20 per cent in the ten year period between 1998 and 2008.
However, because of the higher fertility rate a couple of decades ago, the increase was more than 33 per cent for the 15-29 year old cohort. Experts call this phenomenon "demographic inertia" ‚ even when the rate of fertility has declined, the consequence of past high rates linger on for a while. This is happening and poses real challenges for public policymakers. They will be able to meet them only by working closely with the private sector.
Pakistan today has the youngest population among all those countries that have more than 100 million people. In its case, the median age of the population is only 17 years which means that of the 162 million people in 2008, some 81 million are below the age of seventeen. The relative youth of the population is a real challenge. The young can become a tremendous economic resource, if they are properly educated and trained to participate productively in a growing and modernizing economy. Properly trained and educated they can also fill the skill shortages that have appeared not in Japan, North America, Europe but also in the booming economies of the Middle East.

That this can be done has been am ply demonstrated by some states in India that trained a vast army of engineers and computer scientists to take advantage of what Thomas Friedman called the "flat earth" in his best selling book published a couple of years ago. He gave this name to the emergence of an integrated work place that encompasses several parts of the evolving production system. In the case of India many back-office functions are provided by computer programmers working out of places such as Bangalore, Chennai, Mumbai, and Gurgoan near Delhi.

However, if the development of the human resource is neglected, as Pakistan has done, than the youth become economically and socially marginalized. Such people can become easy recruits for those who wish to disrupt the established order in favor of creating some promised but unrealizable utopia. This is happening, not only in the country's tribal belt adjoining Afghanistan. There are also thousands of young men being educated and trained in the seminaries located in the Punjab, the country's most rapidly growing provincial economy. They have begun to join the jihadists fighting against the forces of the government in the tribal areas and in some parts of the settled districts of the NWFP.
That, in spite of rapid economic progress, the Punjab has also become a recruiting ground for the pursuit of extremist causes is due to the lopsided way the economy has expanded in recent years. The 7- 8 per cent rate of growth over the last six yeas was led by the sectors that offered few productive jobs to the young. The result was that the respectable rate of economic growth did not create a sufficient number of jobs for young people.

In other words, even if the country makes an effort to provide training and education to its population it must ensure that the structure of the economy and the way it grows creates opportunities for them in the work place.

What is the role of the state to ensure that the young are appropriately employed and don't drift into the pursuit of activities that are damaging? The state must do a number of things; of these three are particularly important. The first is for the state to pick the "winners" in which the government can help the private sector to develop lines of product for which there is demand in both the international market place as well as in the domestic economy.

The products on which emphasis needs to be placed are those in which the country has a comparative advantage. High value agricultural products, leather and fashion goods, engineering products for use in automobiles and tractors are some of the items in which the country has developed some expertise and which can absorb a fairly large number of new workers.

The government also needs to involve itself in providing education and training to the young so that they can get productively employed in the changing economy. The private sector is active in this area but it is unable to cater to the demands of low income families his is precisely the segment of the population that needs to be assisted.

The government could help by subsidizing the tuition fees and other expenditures related to attending the institutions that are providing this kind of instruction. Some countries have used the banking system to provide loans and other type of financial assistance to the deserving families who can't afford to send their children to private, fee-charging institutions. Mexico ran this kind of scheme with the help of commercial banks who were responsible for identifying deserving students in need of assistance and for collecting repayments once the students were productively employed. The World Bank joined in this programme with a loan to the Mexican government.

The third area needing government's involvement is research and development. Here it would be helpful to study the Korean approach which involved the state partnering with the private sector to set up applied research institutions whose work was available to be purchased by private enterprises.

These institutions became major employers of the graduates who had acquired skills in various disciplines from technical institutions funded and managed by the private sector. These skills were needed to develop new lines of products and develop processes that could be used for their production.

Finding productive opportunities for employment for a large army of young people who are now working their way through the demographic pyramid has to be one of high priorities for the new government as it finds its feet now that it has managed to bring about a dramatic change in the political landscape.

Shahid Javed Burki
Courtesy Dawn