Treat or trickBy Michael L. Tan |Philippine Daily Inquirer
Last Sunday I was driving on Edsa when, approaching Quezon Boulevard, I saw a horde—and I am not exaggerating—of young boys, running down two lanes of Edsa, screaming like they were fleeing some disaster. I counted at least 18 of them before losing track.
They were, of course, just having fun, deriving cheap thrills from running against the traffic. These are the batang hamog, children of the morning dew, urban poor kids out for Sunday sun, fun and exercise.
“There’s your demographic sweet,” I said to no one in particular, the term having been used lately by central bank and finance officials, as well as groups opposed to the Reproductive Health bill, to argue that our large population has been beneficial because we now have many young people who will drive the economy forward as consumers.
The term has been used interchangeably with “demographic dividend,” again to argue that we are reaping, or about to reap, the benefits of a large population so we don’t need to legislate support for family planning.
But I’m afraid the talk of demographic dividends and sweets in the Philippines are more tricks than treats. The terms have been distorted and mangled, misleading people. Let’s get the definitions, and the facts, straight.
It was a US group, Rand Corp., that popularized the term “demographic dividend” in a report published in 2003. The study was backed by various US philanthropies supporting family planning, including the Hewlett Foundation, Packard Foundation and others, the very ones anti-RH groups have attacked as “imperialist.”
The Rand report says that it is not population growth per se that affects economic development but the age structure, meaning the breakdown of the population by age groups. This structure changes across time, depending on public health interventions, including family planning. As a country’s public system improves, you have higher rates of child survival, which will lead to a “youth demographic bulge.” Without strong family planning programs, this bulge can extend over time, as is the case with the Philippines.
A first demographic dividend can come with the youth bulge, if a country generates enough jobs for this growing work force. A second demographic dividend comes later, with strong family planning programs, where smaller families mean more savings and more opportunities in terms of education and health care. For governments, too, there will be more money to go to public services including, yes, safe playgrounds. This healthier and better educated young population will still be sizeable, but will contribute to slowing down population growth even further, by postponing marriage and child-rearing.
At the same time, these young people enter the work force with more available capital, knowledge and skills, contributing to economic development through entrepreneurial, technological and engineering innovation. That is what happened to the East Asian economies, the so-called Asian tigers, and is also happening now to neighboring countries like Singapore and Thailand, and emerging economies in other parts of the world, notably South Africa, Brazil and India.
The “demographic sweet” concept seems to be a more recent creation, concentrating more on young upwardly mobile professionals (yuppies), with emphasis on their spending as a plus factor. This still relates to Rand Corp.’s observations about age structure, with the demographic sweet referring to young people of working age being able to spend more when there is a lighter dependency burden.
A demographic sweet is there when you have an age-dependency ratio below 50, meaning the total number of very young (below 16) and the elderly (above 64) is less than 50 percent of the population. An example is Thailand, where 29 percent of the population is aged below 16 and 13 percent are aged above 64, to give an age-dependency ratio of 41.
Let’s get to the facts now for the Philippines:
First, we are still in a youth bulge, one of the last countries in the region still in this difficult and precarious stage of a large population of young dependents, many neglected and doomed to unemployment and underemployment. We are missing out on the first demographic dividend, unable to create enough local jobs and exporting Filipinos instead, with social costs in terms of the young and the elderly left behind.
Second, talk about a demographic sweet is premature. Let’s look at the age dependency burden of our neighbors as of 2011. I mentioned Thailand’s figure of 41. Singapore’s age-dependency ratio is 36, China’s 38, Vietnam’s 41, Indonesia’s 48. These countries can talk of a demographic sweet.
The Philippines? The elderly comprise 6 percent of the population and the very young account for 57 percent of the total, giving an age-dependency burden of 63, the highest in the Southeast and East Asia.
Club sandwich gen
Let’s move away from the numbers to better explain the dependency. Many Filipinos know what it’s like to be part of the sandwich generation, where you have to support your children, and your parents. In recent years I’ve met more people in even direr straits, who, besides supporting their parents and children, sometimes have to shoulder the expenses as well of grandchildren, because their children are jobless or are not earning enough. The bittersweet reality is that we have here a “club sandwich generation,” where even the middle class has great difficulties making ends meet.
Yet a study by a group called CLSA, released in October and based on interviews with 400 Filipino yuppies, claims we have this demographic sweet because yuppies, comprising 3 percent of the total population, account for 20 percent of discretionary consumption, meaning luxury items, recreation, vacations and nonessential goods and services.
I do not see that as a source for rejoicing. Discretionary spending is not development. That in fact has been one of our biggest problems throughout our history, particularly in the postwar period. While our neighbors scrimped and saved, and had smaller families, our upper classes excelled in conspicuous consumption—weekends in Hong Kong, expensive imports like cars and other luxury items—while neglecting the development of local manufacturing, and the creation of jobs.
Today the pattern of consumption-driven “development” in the Philippines has worsened, with a flood of imports from China, Korea and other countries that are truly reaping their demographic dividends by producing stuff to sell to the Philippines, where our young are enticed to spend beyond their means.
I shudder to think, too, of what happens to the young and elderly dependents. The batang hamog I saw on Edsa reminded me of slightly older ones, fathers at age 15 or 16, in government hospitals’ obstetrics wards, desperate in their last-minute search for money for their girlfriends’ delivery, clutching a cell phone, some even two cell phones, but not having enough credit load in their phones to call or text. That’s discretionary spending, too, a demographic sweet causing pain.
Let’s not be tricked by all this talk of treats.
The Rand Corp. report is available on the Internet, Look up The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change. You can also find the various references to “demographic sweet” online.
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