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Society
Population, Poverty and
Affluence
The Case of India and China
by
Rajesh Talwar
Quite often nowadays the global media focuses on comparisons between
India and China in terms of their economic growth and potential. It was
not too long ago that the world spoke of how in India and China their
massive populations were in a sense responsible for their relative
poverty compared with the affluent West.
A few decades ago in both China and India the national planners accepted
the then international consensus that population and poverty were
connected. China put into place its one child policy. India attempted
enforced sterilization during the Emergency but huge public protests
followed and the Government was unseated, so that today no politician
can even dream of suggesting anything similar. And it appears now that
the connection between population levels and poverty was tenuous to
begin with.
Nearly fifty years ago, Galbraith, writing in ‘The Affluent Society’
(1958) that is now a classic, explains how economists were even then not
clear on this issue. The example he gives in his book is an interesting
one if we see it in the modern context. He says that if we were to
compare India and Japan and ask an economist why India was poor and
Japan rich one of the first reasons he would come up with would be that
India has too large a population and Japan has a more manageable one.
However, he asks strangely, just suppose for one crazy moment that it
was India that was rich and Japan poor. What would the economist say
then?
Probably, wrote Galbraith, rightly critical of oversimplifying
economists, (even though he himself was one of the tribe), the economist
would then just as confidently argue that India had a huge working force
and Japan did not have enough human resources. It is so simple for
economists to turn an argument on its head and so difficult to be clear
of the real reasons for poverty and affluence.
Reexamining Galbraith’s hypothesis in modern times, economists now often
accept that India and China’s population is actually an asset. Certainly
these two countries are amongst the two booming economies of the world
and both of them have huge populations outstripping their nearest rival,
the United States of America by at least three times (the US population
is the third largest in the world at 298 million). President Abdul Kalam
of India also believes that the huge Indian population is a resource: an
asset and not a liability.
Population explosion is not an issue for affluent societies in the West.
The concern there is that figures for their populations are not growing
and may even be falling. People living in many affluent Western
societies are not having children and some governments (including
Germany) have even introduced policies that will encourage their
citizens to have more children.
West European countries need young immigrants to work because of the
reduced population growth there. The percentage of elderly people
relative to a youthful youth force is too low, and this can be a cause
for economic slowdown. When Western Europe encourages qualified people
from the third world to come and work there it does so for its own
survival and not out of some sense of charity.
The modern revised thesis seems to be that population may or may not be
an asset but a high percentage of elderly people relative to the youth
force almost certainly will not bode well for the economy. And here some
economic pundits argue that India has actually been smarter than China
(though quite unintentionally) by not limiting the size of the family.
India’s youth to elderly population ratio is far better than that of
China.
February 3, 2007
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