Thursday, April 17, 2014

Population Growth does not mean Economic growth

In 2011 the world surpassed the 7 billion mark, a significant milestone which was recognised by several countries and international development agencies. In its state of the world population report to mark the event, the United Nations Population Fund (UNFPA) noted some implications for this rise in population. Among the concerns was that population growth would outpace economic growth and where there was a lack of family planning this could cause severe problems. The report also emphasized that the attainment of a stable population was necessary for economic growth and development. We can assume that by a stable population we mean one in which there is a steady increase with a slightly higher birth rate to the death rate. 
Caribbean countries have faced the problem of population growth outstripping economic growth before. In the 1940s period the Moyne Commission reporting on the living conditions in the West Indies expressed its fears at the growing population, the lack of economic and social development and the need for family planning measures to be introduced. Population growth at that time certainly did not result in better economic conditions. There is a link between economic growth and population to be explored but one also has to consider economic development. Economic growth is related to an increase in a country’s output and income, it is largely fuelled by greater consumption. So that population growth necessitates a rising demand for products and certainly the need for more persons to work and to deliver these products and services.

We often speak of economic growth without considering economic development. Economic development is traditionally seen as the move from an agriculturally based economy to an industrial or services based economy through a range of policies including the adoption of new technologies. It usually results in an increase in living standards for a population. It is therefore possible to have economic growth without economic development, but growth alone fuelled by a larger population and increased consumption does not mean better living standards for a people. There are many places across the world which have had massive increases in population yet there are thousands of citizens without meaningful jobs and without access to basic things such as food, water, shelter, access to proper health care and education.

Resources such as land, water and energy will also come under increased strain with population growth. The British political economist Thomas Malthus’ writing at the height of the industrial revolution posited that population growth outstripped the rate at which food could be produced thus inevitably leading to hardship and suffering. While Malthus’ theory has been disproved by the ability to significantly increase food production through new technologies, there are still concerns over the ability to sustain large population with scarce natural resources. A country such as Barbados with very limited natural resources and a limited land mass will face unimaginable problems with a rapid population increase.

The recent suggestion by a senior government official of increasing our population to over 300,000 people will certainly create an increase in demand. However it does not mean that such demands will be met unless persons have the necessary disposable income to purchase these products and services. Higher incomes are achieved through economic development and economic growth. Economists have noted that there is a strong correlation between the reduction of population growth rates and increases in economic growth and higher incomes. Those countries with a higher level of economic growth also have a lower rate of population growth while conversely those with higher population growth rates have a lower economic growth. 

The introduction of a family planning policy and access to free education have both prevented a population explosion in Barbados. Those with a higher degree of education usually delay or limit the number of children they have. On the other hand those without such tend to have more children. These policies have worked in Barbados with a reduction in the population growth rate and a strong investment in our human resources leading to economic growth, higher wages and greater consumption.

At the beginning of the new school year last September, a local radio station in its newscast highlighted the plight of a young mother with six children. The mother lamented that the monies which she received previously from her Constituency Council had been reduced unexpectedly and queried how she was going to find school supplies. This is not an uncommon occurrence. Any increase in population growth is likely to be done by those who can least afford to support their offspring. It is a signal of the hardship and difficult circumstances which we are likely to find ourselves in if we pursue a population growth strategy without thought to sustainability and the implications it will have for our resources and economy. Population growth therefore does not lead to economic growth it is a false assumption. 

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