Demographic Dividend or Time Bomb?

March 16, 2014 at 12:20 pm

According to the Times of India (TOI),  “About 50% or India’s I.21 billion population is less than 25 years old.”   This  bulge is frequently referred to as a demographic dividend that provides an advantage for India when compared to other emerging or growing economies such as China’s.  However, rather than being an advantage it could be a disadvantage.   The public sector needs to be cleaned up and the private sector needs to be freed up  in order to provide jobs for this generation of the future as illustrated by the following statistics cited by TOI:

“India ranks 134th of 189 countries, according to a World Bank report on ease of doing business.  On ease of starting a business, it ranks even lower: 166.  The report says that 35 permissions/procedures are required to construct a warehouse.”  To open a bar and restaurant in one of the states ( Maharashta)  requires 38 licenses.  All of these steps create opportunities for bribery.    Corruption is cited as the first or second issue by voters in this year’s  political campaign.   There is constant discussion in the newspapers that this red tape needs to be eliminated to free entrepreneurs from “rent seeking” bureaucrats.

The  corrupt political ruling class does very well for themselves.  They are definitely in the 1 percent if not the .1 of one percent.  It is hard to imagine that they will be interested in Lenten repentance ( 🙂 ) .  There is an election coming up in a couple of months and the anti-corruption party that  won popular support in Delhi a few months ago is attempting to field a national party.  Unfortunately, its leader is making one mistake after another.  He resigned after being in office less than one month to make a political point and has threatened to jail the media recently since they are acting like a free press acts.    India is another democratic experiment.  60 years old.   Folks here are frustrated as they are in the US with the political process and lack of effective governance.  A “tough guy” is running ahead in the polls presently.

Speaking of the election, the press commonly refers to “Sops”.  Sops are what the politicians not only promise but actually provide to certain constituencies.  Want to pay less for your water?  We can arrange that!   One of the more interesting sop requests was reported in today’s paper.  In the state of Haryana, a group of men have banded together because of the “ gender imbalance resulting out of widespread female” infanticide.   The guys have coined a slogan “Get us a bride to get our vote.”   20 is considered the ideal age for marriage in the rural areas of Haryana.  Surveys have shown that almost 15 percent of the men 25-29 remain unmarried.  While the bachelors are not really serious about a candidate or the government finding them brides,  they have contributed to raising awareness about the need to save female infants.    The ratio of women to men in Haryana is 877:1000.  See one of my earlier posts about why female infanticide is so prevalent.  The men are also complaining that unemployment is the reason why they cannot find a suitable woman.

According to the Economic Times, there is some good news on the poverty front in India which may be encouraging for employing the demographic bulge. In the past decade, more than 140 million people or 2.18 percent of the population have moved past the poverty line.    Ten years ago 40 percent of the population lived in extreme poverty earning $1.25/day.  Now it is 25 percent.  The “moderately poor”  earn from $1.25-2/day. That percentage has stayed relatively stable as it increased from 35 to 37 percent.  The increase in the standard of living is more apparent among the next two categories of “near poor” and the “developing middle class”.  The near poor ( $2-4/day) have increased form 20 percent to 29 percent and the developing middle class ( $4-13/day) has gone from 4 to 8 percent.   Stats are from the International Labor Organization.

Some quick observations:

1)      This is good news?  I suppose it is positive that there is a bit of a rising tide.  For India’s sake, I hope that people do not feel left behind by the benefits of globalization.  Otherwise, it would not be surprising to see either a Fascist leader or the Great Socialist leader emerge.

2)      Wonder how differently it feels to be moderately poor versus extremely poor?  A distinction that is perhaps meaningful to those who talk about the poor rather than to the poor themselves.

3)      Provides new perspective on the beggars that I see daily to whom people will give coins that are the equivalent of nickels and dimes.   Mr. Shah has counseled me in the past that these folks all have homes and families to which they can return.  He is a bit impatient with them.   I often wonder if one should encourage young children’s begging as it may become their lifelong occupation.

4)      Anirudh Krishna of Duke has shown that folks in the developing middle class are one illness away from slipping back into poverty.

5)      Add up the percentages and you have 99 percent.   Reminds me of the 99 percent movement a few years ago in the US.  Curious coincidence or an economic global phenomenon?

6)      Our driver and housemaid fit in the developing middle class along with  textile mill workers, cash crop farmers, shop salesman, carpenters, auto rickshaw drivers.   The term of developing middle class seems a misnomer.  Mr. Shah would like to leave India and go to Dubai or somewhere where he would make enough money that he could save some.  He promises to wait until we go back to the US. 🙂

7)      Perhaps we have adjusted to India, but it does seem that in general folks are making do albeit at a subsistence level.  Yet, there is still plenty of work for the Missionaries of Charity.

India is Blessed Teresa’s land where she desired to do what is pleasing to God in the smallest detail.  She sought to “ discern carefully and obey the slightest manifestations of God’s will.” ( Mother Teresa  Come Be My Light by Brian Kolodiejchuk).  She knew that she was called “to bring Christ into the unhappy holes of the slums of the Calcutta poor…nursing the sick in their homes—helping the dying to make their peace with God…helping the beggars of the streets to lead respectful lives.”  Making a “home for the lame, the blind , the outcasts of human society…to bring souls to God, and God to souls.”