Mariano Browne
“Time is not measured by the passing of years, but by what one does, what one feels and what one achieves.”–Jawaharlal Nehru
In 1998 the world population was six billion. In 2010, 12 years later, it was seven billion. This week, 12 years later, the UN calculates that the world’s population crossed eight billion. Further, it estimates that the world’s population growth rate will fall to its lowest rate ever (0.8 per cent) since 1950 as women are choosing to have fewer children. But as the Economist magazine pointed out this week, population growth is like a train; even with the brakes on the train only stops eventually. The UN estimates that the world population will continue to grow, albeit more slowly, reaching 10.4 billion people by 2085 before it begins to decline.
Before that happens, the UN estimates that 61 countries will begin to see their populations fall by at least one per cent (1.0 per cent) by 2050. As Malala Yousafzai explained, “When girls are educated and when they stay in schools, they get married later in their lives, then they have less children...” This explains why the UN spends more time promoting access to education for girls than promoting modern contraception. This “education dividend” has already impacted T&T as girls have been outperforming boys in education as in many other western countries. This has already impacted T&T’s birth rate as it is one of those countries that will experience a population that is both declining and ageing simultaneously.
Since independence, T&T has moved from a low-income country to a middle-income country with a commensurate improvement in its living standards. Life expectancy has improved, as has health care and education. However, the country remains stuck in this middle-income position. To improve its income/living standards T&T would have to grow faster than its population growth. This will require much higher levels of investment in the productive sectors (energy and non-energy) and infrastructure, meaning better roads, transportation systems, water, more modern technology and the spillover benefits that accrue.
From a demographic perspective, a youthful age structure ensures that a country’s population will continue to grow even if average fertility drops immediately to the “replacement level”, at which each generation bears the exact number of children needed to replace itself. That means that on average, every female of childbearing age must bear two children. Unfortunately, T&T’s reproduction rate has fallen below this replacement level.
The average fertility rate for the 2000-09 period was 1.7 whilst CSOs more recent observations are 1.5. Therefore, the most important demographic challenge facing T&T is an ageing population. This is incompatible with sustainable economic growth unless policies are implemented to reverse this trend. The projected impact is shown in the following table (Table 6.2, pg33, NIB’s 10th Actuarial Report):
*********** Table to be inserted here, emailed to joel
The table shows a rising over-60 population segment, whilst the under-14s and under-59-year decline. Living longer creates additional burdens; the growing burden of chronic illnesses, injuries, and disabilities and increasing concerns about future caregiving and healthcare costs. Chronic diseases, which affect older adults disproportionately, contribute to disability, diminished quality of life, and increased healthcare costs. As the Health Ministry has advised, the chronic illnesses of diabetes, hypertension and renal failure are a result of poor lifestyle choices. An ageing population increases demands on the public health system, medical and social services, and social security costs.
Given this background, creating more sustainable economic growth requires decisions on many fronts that have already been postponed for too long. All governments must cater for those who have been challenged by unforeseeable economic circumstances. But the working poor and the indigent must be identified by an up-to-date survey of living conditions which quantifies what they need to become self-sufficient. That includes improving the education system to ensure that remedial learning is embedded so that the school system does not perpetuate underdevelopment.
One implication of the foregoing is that the transfers and subsidies element of the budget must be overhauled and transfers to state enterprises radically rethought. The fiscal regime must be adjusted to encourage more individual savings and the social security system calibrated to complement private pensions. And, of course, the retirement age must be adjusted.
None of these proposals will adjust the demographic trend noted in the table above. If we want to accelerate, maintain, sustain or encourage growth, then the number of working people must be increased before it becomes a bigger, irreversible problem. Therefore, economic policy must adopt a more forward-looking, proactive perspective that addresses the demographic trends today. That requires a well-thought-out immigration policy and a more sensible approach to the Venezuelan refugee crisis than has been demonstrated thus far.