Economics and changing demographic trends in Asia | Sunday Observer

Economics and changing demographic trends in Asia

A map developed by The Economist journal, shows South Asia, South East and Far East Asian region what to expect by 2030, resulting from very different economic growth pattern and demographic changes that had taken place in the past few decades in various countries.

What the map conveys is interesting from many angles, economics, politics and development setting, reflecting the shape of things to come in this part of the world.

The Asian region has already attracted world attention with emerging markets and fast growing economies, increasing interactions, co-operation, presence of geopolitics shades of conflicts, and trouble spots every now and then in the region. These make the region internationally visible in the radar of world view.

Asia consists of 51 countries in the demographic map of the world and are geographically to be found in West Asia, Northern Asia, in the Far East, South-East and the South.

The world population stands at 7.486 billions now and the map shows some 23 countries. (Seven in the Far East, nine in East Asia and seven in South Asia).

The 51 countries account for some 4.516 billions of people which is 66.1 percent of the world population Now of this ,the Asian of component of 4.516 billions, just five countries (China, India, Indonesia, Pakistan and Bangladesh) account for 74.93 percent, making these countries to possess very large populations within their territories. The map shows the emerging trends in the region following very different demographic changes and more important differing economic development and growth rates in the last few decades in each economy, following different planning strategies for socio-economic development in their respective countries.

We need to take a good look at the predicted picture by the year 2030 in this region. Two groups of countries with different labour supply and labour demand are shown two different colours and those expected to possess excess labour resulting from past high birth rates and low death rates due to improved health facilities are indicated in blue and shades of blue.

They are reportedly with large populations with high proportion of young age groups in the age bracket of 20 to 30 plus, available for employment. These are counties that contain in their respective economies the excess labour that migrate to other parts Asia, to Far East and South East, up to 2030 and beyond, as it happened with respect to Gulf countries in West Asia since mid 1970 following oil price rise resulting booming economies there.

Many countries in South Asia sent very large numbers there, including Sri Lanka, which began exporting some two million workers to Gulf countries annually earning foreign exchange to a tune 7.5 billion US dollars, to spend on import consumption, largely since late 1970s with very little or no substantial transformation in the economy, despite strategies for industrial development and export led growth with foreign direct investments (FDI). With liberal trade policies, however, the flow of imports led to expansion of trades and it led to expansion of the service industries and this of course absorbed the annual increase in the labour force reducing the then existing unemployment, specially that of the youth. This trend, however, did not lead to a fundamental change in the economy by way of substantial industrial development and technological changes leading to new export-earning sectors, except perhaps tourist-services and the garment industry.

However, these developments have not lead to improving the economy’s income status and a substantial growth as in Far East economies.

In the map, Sri Lanka, shown in light pink, is somewhat misleading, but shows that the country is going through a demographic change resulting from an aging population and not genuine labour shortage resulting from industrial development of a genuine nature as in Malaysia and other south East Asian countries.

It is also to be observed that Sri Lankan population is not growing either, thereby creating a premature labour shortage.

This will affect the plantation industry as well as the food producing paddy sector creating serious problems related to labour.

This trend of development in Sri Lanka shows that in the past 30 odd years the economy has not taken a genuine transformation process to increase both income and employment as well as export earnings. Only a mighty effort to develop genuine industrial development outside the Western Province attracting the best technology from foreign entrepreneurs with local participation can reverse this trend and achieve high level economic status with export-led industrial growth and escape the possible middle income trap.