Boon or Bane

Often, to understand the events of a period, one has to be given context: what was the value system of the day? What was taken as obviously true? Or the “right” thing to be doing? That’s obvious; but it came as a shock to me to see that it can be true even when analyzing seemingly recent events. Like the infamous sterilization drive of Sanjay Gandhi & Co.

In his book Imagining India, former Infosys CEO, Nandan Nilekani says that as recently as the mid-twentieth century, even the West was fearful of the Malthusian population bomb, namely that population would grow much faster than food supply. India and China were watched with the utmost fear on this front. In that age, sterilization of the unfit and termination of “defective” babies were considered reasonable even in the West. Is it really a surprise then that both Sanjay Gandhi in India and the Chinese government enforced population control? Hell, as recently as 1983, Indira Gandhi and China’s family planning minister received the UN award for “the most outstanding contribution to the awareness of population questions”. Yes, you heard it right: the UN gave that award!

But then the wheel turned full circle: as agricultural output increased, the world stopped being afraid of the population growth. In fact, the idea of “population as an asset rather than a burden” caught on: a larger population that starts stabilizing, especially a young one, means a larger labour pool; and also a larger consumer class. This is called the “demographic dividend”.

Ironically, the one-child policy enforced on all in China and the voluntary stabilization approach of India are now yielding different consequences. China’s pause/decline happened uniformly across the country (after all, it was government enforced), which meant they got a “single hump” growth period. While China got rich, they didn’t get rich enough before the population inversion (more older people than younger people) has started. As Nilekani writes:

“(China) is becoming gray before it has become rich.”

India, on the other hand, saw the southern states stabilize much earlier than the northern states. This means we’re headed for a “double hump”: the first demographic dividend from the south (almost over now) followed by a second one as the northern states have started stabilizing.

Of course, says Nilekani, a demographic dividend still has to be managed right. Latin America blew their’s when they lost a decade to hyper-inflation and total mismanagement. And both Russia and Cuba failed to gain any benefits from their’s. And so says Nilekani:

“The chance is not a certainty.”