Who is reaping the demographic dividend?

Spearhead Analysis – 02.06.2014

By Enum Naseer
Research Analyst, Spearhead Research


Today, Pakistan is the sixth most populous country in the world with a population of an estimated 190 million and by 2020 it is expected to be home to 210 million. It is argued that with nearly 50% of its population below 20 years and 60% below 30years, Pakistan may actually be able to accelerate economic growth owing to an expanding workforce.  While this is an optimistic take on an otherwise depressing situation, given the prevailing conditions in the country and the multiple challenges that have arrested growth and progress it may be the best time to take our rose-colored glasses off. The job market clearly cannot keep up and the government seems more concerned with the task of navigating a way out of a fiscal crisis as it trades long-term benefits for momentary relief.

As the population continues to grow at 1.7% per year (2012 estimate), Pakistan’s problems reflect the impact of that growth in magnitude and gravity. Resources are scarce and continue to grow scarcer while demand grows—the energy deficit (3,100MW on Thursday) and water scarcity (expected to increase to 31% of people’s needs by 2025) are just two examples of problems that will continue to haunt policy-makers in the future if the population problem is not addressed. In this context, the argument that the population bulge provides a window of opportunity is too simplistic. It should also be pointed out that it is the poor that continue to have larger family sizes because of the lower perceived cost of having a child— a new addition to the family is seen as an additional hand to earn rather than another mouth to feed. The more affluent tiers of society still stick to smaller family sizes so as to maintain a comfortable standard of living—the children get access to quality education and health services and can contribute better to the economy when they grow up. Pakistan may not be able to benefit from the maturation of its previously young population because it is lagging far behind in framing effective education, health and economic policies to capitalize on the so-called opportunity.

The ILO expects Pakistan’s unemployment rate to rise to 5.29%–this is an indicator of the shrinking income opportunities available in the legal labour market. In the state’s failure to provide its citizens with job and career opportunities, anti-state elements see a huge opportunity. The demographic dividend is theirs to reap and this is fully reflected in Pakistan’s increasing crime rate. In the absence of good reforms in the social sector, they are able to capitalize on the disillusionment and frustration among the youth. While gangs promise quick money and power, terrorist outfits promise glory and a ticket to Paradise in case of death as additional benefits. To the Taliban in particular, low-income areas provide cannon fodder. They reach out to the families of the recruits as well by paying monetary compensation. Through an extensive network of extremist madrassas that provide free education to the poor, the Taliban are able to lure young people into joining their ranks. Anti-state elements thus, are quick to exploit the situation by using the weaknesses of the current system to make a pitch for fighting for the establishment of an ideal Islamic state and they have been successful to a great degree.

Recently, a doctor belonging to a minority community was brutally shot down in front of his wife and two-year old son. This is just one of the many times top professionals belonging to minority sects have been targeted in the country. Fascism is spreading like the plague– religion today is little more than a cover to provide legitimacy to the motives of the power-hungry. The security situation has forced many intellectuals and professionals to flee the country for fear that they might be next. As Pakistan struggles to position itself as an appealing investment destination–an emerging economy against all odds, it bears the brunt of targeted killings of its very best and the resulting massive brain drain. Hence, the narrative that very strongly argues about the possibility of taking advantage of the country’s high population growth rate ignores the demographics and psychographics of a growing portion of this population and overlooks the problems that Pakistan faces. When yay-sayers press for the realization of the opportunity, they ignore the fact that the policy environment needed for this to happen is missing and creation of such requires serious thought and action.

That the Sharif administration has expressed its resolve to work for regional peace and economic prosperity in collaboration with regional players comes as good news. The Prime Minister’s visit to India on his counterpart’s invitation will usher in a new era of friendly ties with our neighbors and might help make a case for greater social sector spending. The preparations for the new budget are also in full swing now and it is hoped that this time around, the sector will be allocated sufficient funds to help pave way for a complete overhaul. Improving the education sector with a view to countering the madrassa system, providing different avenues of employment to the youth and facilitating the workforce in upgrading its skills will be helpful. The country is also aiming to reduce it population growth rate from nearly 2% per year to 1.2 percent per year by 2025.

The population problem is the root cause of many of Pakistan’s woes and therefore, needs immediate attention. Pakistan is poised to touch the 300-million mark by 2050– resource-allocation is bound to become more challenging hence, sparking unrest and allowing greater room for enemies of the state to propagate a venomous narrative. Action must be effective and timely, because as optimists and pessimists bicker among themselves about whether Pakistan’s population growth rate restricts or promotes economic growth, opportunists see it neither as a glass half-full nor a glass half-empty situation and continue to benefit from the inaction of both.