By Rawle Lucas
Rawle Lucas is a Guyanese-born Certified Public Accountant and Assistant Vice-President of the Lending Services Division.
Mr Lucas has agreed to serve as a columnist with the Stabroek Business and will be contributing articles on economic, financial and development matters.
Declining Population
Over 6.7 billion human beings currently live on this planet. All of them consume resources and create pollution. An ever-growing appetite for material wealth makes humanity encroach upon other species and in some cases exterminate them. The effects of human activity on the environment have caused people to ask themselves if there are too many human beings on Earth, and whether the current rate of population growth is sustainable. More children, who become more adults, who consume ever more resources! The preoccupation has been with over population. Hardly does anyone even consider the opposite problem, the impact of a declining population on a country. The issue might not be grabbing global attention but it is real and its consequences severe, especially for a country like Guyana that has been unable to grow its population in any meaningful way. An obvious reason for the fall or stagnation of Guyana’s population is emigration, but declining fertility is just as problematic. On the celebration of its 40th anniversary as a Republic, it is something on which the country might want to reflect.
Replacement
Guyana is not the only country haunted by population torpor. Today, in some European countries, the population crisis is not that there will be too many people consuming too many things, but that there will be too few working-age people to sustain it. Given the current social and economic imperatives, countries need working-age people to pay taxes, which, in turn, pay for old-age pensions and other social benefits. Without the necessary population, many national economies were likely to shrink. Absent high death rates, many European societies estimate that they need a “total fertility rate,” or TFR, of 2.1 children per woman to maintain current levels of population. Simply put, two children merely replace the two that were responsible for them being on earth. Many western industrialized countries have come to realize also that to make a difference in the demographic structure of their societies, the population trend has to skew younger. This requirement is typically met in mostly poor countries where the fertility rate is often well above three and four children per woman, and the opportunities for good care are absent.
Fertility Trends
The stark consequences of a downward trend in fertility rates started showing up early in the decade in some rich countries where the population was skewing older. This dynamic forced many of them to rethink population policy and for good reason. Germany, with a TFR of 1.33, has seen several towns being reclaimed by nature due to lack of children. Spain had a TFR of 1.3 less than three years ago. Italy, once known for its fecundity, has a TFR of 1.36 and, like Spain, now struggles to achieve new births just to maintain its workforce. Spain has joined Italy and France in offering women and families an incentive widely known as the “Baby Bonus” to encourage women to have more children. The financial payout occurs for each new child born to legal residents of those countries.
The crisis in Japan is even more dramatic. With a TFR of 1.27, there are schools where the student body can be counted on one hand. South Korea, in the 1960s, encouraged its citizens to have fewer children, and this campaign, along with the rising cost of living, succeeded far too well in achieving that goal. Today, South Korea has a TFR of 1.2. The United States heroically bucks the low-fertility trend with a TFR of 2.09, but even that positive trend has not saved the US from encountering a crisis in its Social Security system due to the retirement of people who were born during a period of much higher fertility.
However, declining fertility is not only a problem of wealthy countries. Even places such as Iran, Vietnam, and Thailand already have below-replacement fertility, and many others in the developing world are catching up. Guyana is no exception; after its TFR peaked in 1955 at about 6.9 children per woman, it has fallen every year since. Though the rate of fertility decline has slowed considerably since the 1990s, Guyana’s current fertility rate, at about 2.3, places it well compared to mature societies. However, if current trends continue, the fertility rate will likely slip below 2.1 by 2020 if the decline is not arrested soon.
Risk Averse
Fertility freefall creates several pressing issues. Apart from the above-mentioned problem of an eroding tax base, fewer children also mean a smaller workforce and fewer consumers.
As both producers and consumers shrink in number, less wealth is generated, endangering the country’s prosperity. That is the experience of Guyana. Additionally, older people tend to be more risk-averse and save, while younger people tend to take risks and spend. If citizens do not voluntarily spend money, the economy does worse. In most developing countries, where structural constraints to production and competition dominate, adding the dynamic of an overly aged, risk-averse workforce would make development a Herculean task.
Perils
The fertility issue aside, Guyana is no stranger to the perils of population decline. Emigration in the 1970s and 1980s took its toll on the economy as people, both educated and uneducated, left the country for the greener pastures of the Caribbean, Europe, and North America. Without the know-how of the educated and the labour of the uneducated, Guyana has struggled, leaving the country one of the poorest in the Latin America and Caribbean region, and increasing the incentive for even more people to emigrate. The saving grace for Guyana has been remittances from its expatriate population that helped to soften the economic blow struck by a declining population. But while emigration offers some hope through remittances, declining fertility could lead to trouble. Think about it! Guyanese who are never born because of sub-replacement fertility cannot send money home, not even from the land of make-believe.
Grim Situation
If Guyana does not address this problem, it will have to become even more dependent on the outside world for survival. This trend has deepened every year since 2005 under this administration. It will continue to need the foreign markets to achieve cost efficiencies. It would need to import skilled labour from abroad. If Guyana is to stem its coming fertility crisis, it must increase economic opportunities for Guyana’s children to keep emigration in check. It will also have to ease the burden on women and families of caring for children and develop sensible land-use policies that could make it easier to live in Guyana. If Guyana cannot address this problem, it may well find that it has grown old before growing rich, and a country so poor can hardly afford such a grim situation. A sustained low birthrate is a modern innovation that Guyanese can do without, for the future belongs to those who show up for it.