Tuesday, December 02, 2003

If demography is destiny...

A demographic challenge that lies ahead is the growing strength of Dalits. Given their higher birth rates, Dalits today matter more in elections than before, says R Jagannathan

States in the US are worried that Indian software engineers will take away their jobs. Unions in the UK are up in arms because Indian BPO firms can endlessly undercut them and grab contracts.

The Assamese are angry that Biharis — not to speak of Bangladeshis — are reducing their job opportunities and making them a minority in their own state. In metros like Mumbai and Delhi, the growth of migrant workers from the poorer states of India — apart from Bangladesh and Nepal — is already spreading angst among the locals.

Despite the short-term worries about local jobs, what’s common to all the above cases is the demographic challenge. In the West, the median age of the population is rising due to declining birth rates and increased life expectancy — exactly at a time when India has a surplus of educated employed. Skill shortages are now surfacing as there exists a higher demand for Indian software services, teachers and doctors.

In fact, a recent study by a high-level strategic group headed by Planning Commission member N.K. Singh says that skill shortages in countries such as the US, UK and Germany will rise to around 32-39 million over the next two decades.

This constitutes an opportunity for India to grab business worth $ 133-315 billion in remote services like BPO and through the import of customers (like bringing in patients for surgery and recuperation in India.) Even China and Russia may not be as well placed as India to serve this market gap due to changes in their own demographics and ageing populations.

Of all the problems faced by societies, it is always the demographic challenge — whether of high birth rates or low — that is the most difficult to confront. The reason: Demographic change compounds at a slow rate — slow enough for most people to miss its import in everyday life, but it’s faster than the ability of communities to change course.

The developed world knew long ago that it had a problem with the rapid ageing of its workforce, but it could do little about it because decisions to reproduce (or not to) are made by individual couples. It’s not something a state can influence beyond a point. What makes sense for an entire community — having more children — may not make sense for an individual couple because of economic factors.

Even in India, there are huge demographic challenges ahead. Internal migration — assuming it to be a function of wage differentials and the relative growth rate in populations — could start increasing from the Bimaru areas due to the huge drop in birth rates, especially in the south.

States like Kerala, Tamil Nadu and Andhra Pradesh have already achieved a net reproductivity rate of one — which means they are only producing enough children to replace the ones dying off. Bimaru migration, I surmise, has thus far been concentrated in the northern and eastern states due to closer linguistic affinities. But this could change as the southern economy booms and the workforce starts developing gaps.

Politically, the relative drop in the population share of the south means that every Lok Sabha seat represents fewer people in the south than in the north. But internal migration could change this — making ethnic Hindi-speaking people an even stronger political force than before.

We should thus be prepared to face more calls for regionalism than before. The massacre of migrants in Assam is only an early warning signal of what could happen elsewhere in India. The Shiv Sena’s muscle-flexing over railway jobs in Mumbai is one such straw in the wind.

Another challenge will be the growing strength of Dalits and the underclass. Given their higher birth rates so far, Dalits today matter more in elections than before. The rise of Mayawati is in no small measure due to this demographic change. With the upper castes, and increasingly some of the better-off OBCs, slowing down in terms of reproductive rates, the Dalit voice will get stronger in the future.

A even bigger demographic challenge — perhaps spread over a longer timeframe of 40-50 years — will be the growth of the Muslim population in India and the rest of the subcontinent. It is no secret that the Muslim population in India, and the subcontinent as a whole, is growing much faster than the other communities.

One research study by the Chennai-based Centre for Policy Studies shows that the number of people belonging to religions of non-Indian origin (basically Islam and Christianity) could exceed those that were indigenous to India by the 2050s if one takes the subcontinent as a whole. (Demography is no respecter of national boundaries, as the Mexican influx into the US or the Bangladeshi influx into India shows.)

During these 50 years, the economic challenge will be of an ageing Hindu population, and a much younger non-Hindu population. That will bring its own political and social challenges. Demography offers a new challenge to democratic societies — and this challenge cannot be ducked by shying away from the numbers.

Source: Business Standard, December 2, 2003

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