Population Growth and Economic Development in LDCs
The concept of population growth is critical in developmental economics. Its role in economic growth and development is not definite, a factor that has raised the interest of scholars on the subject. The complexity of the relationship between the notions population and economic welfare arises because of the lack of agreement among scholars and policymakers on the role of population growth in economic empowerment. Peterson evaluates the issue and notes that some researchers believe that economic growth in high-income countries is likely to slow down as population growth rate declines (1). Contrarily, others hold the view that sustained growth in the populace places severe pressure on scarce resources, a factor that lowers the developmental outlook of the affected society. This rationale applies primarily to Less Developed Countries (LDCs). The justification for this contention is that a large population reduces the amount of resources available for savings and investments. Yet, the two elements are perceived as the basis for the growth of wealth and subsequently, living standards. Consequently, in this paper, an assessment of these concerns will occur. It will include an examination of pertinent concepts that relate to population growth, such as fertility and birth rates, dependence, as well as inequality. The focus of the research will be on LDCs.
The Definition of LDCs and Reasons Behind Poor Development
The United Nations Conference on Trace and Development (UNCTAD) defines LDCs as “low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets” (iii). As of 2018, 47 countries, majorly in Africa and Asia, fell under this category. Multiple attributes are associated with low-income nations. They include high poverty levels. UNCTAD estimates that over 50% of their populations live below the poverty line. Additionally, the countries are characterized by the lack of adequate capital for investments, high indebtedness, poor infrastructure, and a large public sector. The high level of dependence on the public sector for growth, coupled with other systematic barriers, have restricted private enterprise.
Developmental variables concerning health and education are poor. Accordingly, the level of technology available is minimal. Most of the LDCs are described as being technologically backward. The lack of effective governance structures is also prevalent; hence, regulations and laws are either inadequate or ineffective. This situation creates loopholes that political and economic elites exploit, an occurrence that produces high levels of income inequality in these states. Moreover, infrastructural development is minimal; thus, restricting much-needed investments, especially by the private sector. More critically for this research is that LDCs tend to have high population growth rates. As an illustration, the average crude birth crude rates in the developed countries is less than 20 while that of low-income countries is 50. The attributes highlighted above imply that critical indices like the Human Development Index (HDI), Adult Literacy Index (ADI), Purchasing Power Parity (PPP), and the Gross Empowerment Index (GEI) are relatively low when compared to their more developed counterparts.
UNCTAD asserts that numerous structural barriers prevent economic growth from occurring. One such obstacle is the poverty trap whose main feature is the low income per capita. This occurrence hurts economic growth because it leads to low levels of consumption. Notably, consumption is a vital driver of economic growth. Further, depressed incomes are an indicator of low productivity. As an illustration, most of the individuals are employed in smallholder farming enterprises (UNCTAD iv). Therefore, such persons are not only risk-averse to investments but are equally unable to make enough savings to warrant investing in economic activities that would improve their incomes significantly.
Secondly, the countries also suffer from commodity traps. Most of the nations depend on the production and export of commodities for income, employment, taxes, and foreign exchange. According to UNCTAD, of the 47 nations classified as low-income, 38 of them have commodities as constituting about 70% of their exports (iv). Countries like South Sudan, which depends on oil exports, and Togo, which relies on coffee and cocoa exports, illustrate this trend.
While the resources are a desirable source of income, they are prone to external factors, a situation that increases the prices’ volatility. Some of the events that may impact the price include economic shocks like the 2008 financial crisis, climate change, and geopolitical events like the breakdown of diplomatic relations between the U.S and Iran. Therefore, in the long run, they are not a reliable source of income. Moreover, most of these nations export commodities in their raw form. The minimal value addition limits the income earned from the trade, especially considering that intermediate and processed goods attract high prices when compared to their primary forms.
Additionally, the dependence on commodities also creates the notion of a natural resource curse. The disadvantage is prevalent in two ways. First, high commodity exports lead to an appreciation of the exchange rate. Consequently, this situation leads to poor performance in other sectors of the economy like manufacturing, whose performance improves when the local currency is weaker relative to international currencies — it makes such exports cheaper. Thus, in such a circumstance, the volume of non-commodity exports would rise while also providing a foundation for domestic technological advancement. Therefore, the absence of alternatives to the commodity-based economy, especially in its primary form, leads to a cycle of low incomes. This occurrence exacerbates the resource trap.
Secondly, high commodity exports create opportunities for rent-seeking and corruption. This condition arises because of weak governance structures. Consequently, self-serving individuals and multinational corporations corrupt local officials to obtain the resources at relatively lower prices. It reduces the ability of the LDCs to maximize the potential benefits from their natural resources. This situation is made worse by the lack of technological knowhow to exploit the commodities. Further, dependence on exploitation and trade of commodities for income tends to lower investments in other crucial sectors of the economy. This outcome leads to high levels of importation, including that of essential productions like food. This circumstance depletes foreign exchange reserves. In response, the affected countries often resort to debt and dependence on aid. The combination of these factors deepens the poverty and resources traps.
Population Growth and Development
LDCs and Population Growth
Notably, high population growth rates are a common feature among LDCs. As an illustration, the United Nations Population Fund (UNFPA) holds that as of 2011, the total population of persons in LDCs was 851 million (n.p). This figure is expected to have doubled by the year 2050. Additionally, the region accounts for 12% of the global population; yet, presently and in future (until 2050), UNFPA estimates that the region is responsible for 40% of the entire global population growth rate.
One of the core reasons behind this phenomenon is the high fertility rates — the number of births per woman —in the areas. It is essential to note that fertility rates across the world have been on a decline, including in LDCs. However, the rate of decline in this group of countries is lower when compared to middle income and developed countries. For instance, two of the least advanced states are South Sudan and Burundi. Data from the World Bank (b) illustrates that the number of births per woman was 4.78 and 5.5 for South Sudan and Burundi, respectively (n.p). In contrast, the rate in the U.S and Japan in 2017 was 1.77 and 1.43 respectively. The two countries fall in the developed category.
Numerous underlying reasons to justify the phenomenon exist. Children are seen as a source of cheap labor. Given the low levels of technological advancement in the region, most of the economic welfare require intensive work, especially smallholder farming, which is the most prevalent income-generating activity. This occurrence is more prevalent in rural areas where agriculture is common. Accordingly, this outcome is perverse because the rate of urbanization in these areas remains considerably low. Therefore, the more the children that a family has, the easier it is for them to undertake their subsistence economic activities.
The inadequate or lack of a credible pensions system also contributes to the problem. Children are perceived to be a form of social security for their parents when they age. This situation arises because of a combination of structural factors such as poor governance, a factor that leads to the pilferage of the existing social security systems. Further, low incomes make saving for the old age difficult. The combination of these factors increases the perception of children as a means of security; hence, the high birth rates.
Moreover, infant mortality rates tend to be high when compared to the rest of the globe. For instance, data from the World Bank (b) indicates that the infant mortality rates in South Sudan and Burundi were 63.7 and 41.58 per 1000 live births, respectively (n.p). Meanwhile, in China — a recently economically developed state — the rate is only 7.4 per 1000 live births. The expectation that a child is likely to die creates the need for enhanced procreation, a factor that has contributed to the high population growth rates. Additionally, the overall death rates (including adults) remains high. This circumstance occurs because of factors like high incidents of communicable diseases, such as tuberculosis (TB) and poor nutrition. Wars, poor access to healthcare services, and susceptibility to natural disasters also contribute to this outcome. Like infant mortality, these aspects create an urgency for high numbers of births.
Low levels of contraception use also contribute to the scenario. Contraceptives play an essential role in family planning. In LDCs, structural and cultural barriers contribute to the low usage of contraception. Firstly, access to family planning tools is a challenge. This case arises because of low levels of income which implies that contraceptives are not a priority for many of the families. Essentially, it is not perceived as a basic need. A similar situation is also present at the macro-level. The state’s priority areas in healthcare funding include combating communicable illnesses like Human Immunodeficiency Virus (HIV) and TB. Other non-communicable diseases given preference include malaria. Consequently, reproductive health services fall in the low ranks within the hierarchy of healthcare needs. This outcome illustrates the assertion of Creanga et al. The authors contend that wealth-related inequality is a major contributor to high population growth rates in LDCs when compared to developed countries (261). Therefore, as long as low incomes continue to define poor countries, their access to population health services will remain restricted; hence, sustained high fertility rates relative to the other countries.
Secondly, cultural factors also contribute to the low levels of family planning use in such countries. In many of the LDCs, most individuals still hold conservative norms. Therefore, the use of contraceptives is discouraged and is associated with social stigma. Religious rules may also prohibit their use. In some communities, a belief exists that many children are a sign of good health and wealth. Further, early marriages in some areas imply that a significant portion of women in LDCs spends a much high proportion of their fertile years giving birth when compared to their counterparts in developed societies. The lack of adequate awareness of the possible side effects of contraception use has also created fear among women. Moreover, in most families, the decision to use family planning methods is not collective. Instead, it is perceived as an issue that only relates to women. The low levels of participation from men have led to relatively low success rates in controlling birth rates using contraception.
The combination of the factors highlighted above has led to the considerably high levels of population growth in LDCs in comparison to other middle- income and developed countries. Ostensibly, such an outcome has an impact on economic growth and development. However, scholars do not agree on the actual effects. Consequently, in the following section, an evaluation of various schools of thought on the subject will occur.
Theoretical Perspectives on High Population Growth Rates in LDCs.
One of the schools of thought regarding population growth in LDCs supports the high population growth rates. The argument is that reducing the population growth rate is a conspiracy by developed nations. Its aim is to depopulation the victimized states for purposes of neo-colonialism. A small population would be easier to control; hence, creating a suitable environment from where they can exploit natural resources.
Accordingly, proponents of this perspective hold that high population growth rates are beneficial. They offer a competitive advantage to the affected countries; thus, providing them with an opportunity to graduate into middle-income states. The benefits arise because a high population implies the existence of a large pool of labor and market for goods and services. This situation leads to economies of scale. Consequently, it helps in improving production and consumption within the economy; hence, increasing disposable incomes. The rise in incomes would, in the long run, cause improvements in welfare.
However, many development economists do not prefer the pro-population perspective. It is because the dividends of high population growth are yet to materialize in most of the affected countries. Therefore, the prevailing belief among developmental stakeholders is that high population growth rates restrict the improvement of economic welfare. The rationale for this counter-approach is that low population growth helps to reduce the extent of the resource drain. Therefore, more resources would be available for savings and investments. Additionally, the threat of a declining pool of labor would be offset by the expected technological advancements. This circumstance is plausible because the increase in resources would allow the nations to acquire capital wealth and invest in education; thus, raising their technical capacity. The combination of these variables would increase economic output and development in the long term.
Numerous scholars have evaluated the subject of population and its impact on economies, especially those in regressive states. One such scholar is Thomas Robert Malthus. In his assessment, he came up with the concept of the Malthusian catastrophe. It refers to a situation where the level of population growth would outpace the rate of agricultural production; thus, creating a scenario where a state with a large population would be unable to feed its citizens. Applying the same logic, if income growth rates do not surpass population growth rates in LDCs, the countries would be left worse off and would not be able to afford their sustenance. The possibility of such an outcome arising is high because of the perennial low levels of technological advancement and the lack of capital resources in LDCs. Additionally, emerging challenges like climate change are also likely to add to the difficulties that the affected countries face. Such an outcome is probable because mitigation measures are resource-intensive; yet, these nations have a shortage of them.
Dependence and High Population Growth
The high population growth in LDCs implies that the absolute population is similarly high. Peterson affirms that 43% of the people in Sub-Saharan Africa (SSA) — a region with a high share of LDCs — are below the age of 15 years while an estimated 3% is above 65 years (9). The data showcases that the age dependency ratio is significantly high. The dependence ration refers to the proportion of the labor force that supports individuals that are not part of the pool of labor. As an illustration, the World Bank (c) contends that the age dependency ratios in Togo and Afghanistan 79 and 84, respectively (n.p). Substantively, it means that in Togo, every working individual supports at least 7.9 persons. Instructively, the income used to support the other persons goes to consumption. Consequently, the amount of income available for savings and investments is low. Accordingly, the affected person is unlikely to invest sufficiently, either in enterprises that pay profits or in education, a factor that would have otherwise improved their employment prospects.
The dependency ratios availed by the World Bank could also be deceptive because they mask the real extent of the problem. The focus of the statistic is on age dependence; however, another broad cross-section of society is also affected. For instance, the data does not cover students, the unemployed, those that took early retirement, or those with health complications and disability. Therefore, the dependency ratio because of the high population relative to employment could be significantly higher. This factor contributes to the persistent underdevelopment of the LDCs.
The Way Forward
While debate remains on the role of population growth on the economic growth and development of LDCs, evidence exists to the effect that unrestricted growth could have a negative impact. Therefore, the prevailing thesis in this paper is that authorities and communities in LDCs need to adopt proactive measures to restrict population growth. This step implies that measures to lower birth rates are necessary.
Some of the measures that can reduce birth rates include lowering the cost of education. According to UNCTAD, education is a necessary condition before a country graduates from being an LDC to the middle-income status (v). It ensures that women stay longer before initiating childbearing activities. Additionally, it also forms the foundation for creating awareness on family planning methods. It also enhances a woman’s employability, thus increasing their likelihood of raising personal wealth. This occurrence helps to reduce wealth-related inequality that Creanga et al. hold is a significant contributor to low contraceptive use (261). Further, the authors illustrate that countries like Kenya whose access to basic education to both men and women has increased significantly have made positive strides in encouraging the use of contraception (262). Therefore, enhancing access to education is a valuable element.
Authorities and other stakeholders should also take steps to reduce infant mortality rates. Notably, high rates of infant mortality create the need for women to bear more children to replace those that might die. However, if incidents of child deaths are reduced, women would not have to view many children as a form of security for the family. Applicable measures include improving access to population health.
Further, states should institute effective retirement benefit schemes. This measure would require the establishment of solid governance structures to prevent incidents of corruption and pilferage. This occurrence would lead to a reduction in the perception that children act as social security for their parents in their old age. Moreover, governments should restrict welfare benefits to society. High welfare benefits serve as an incentive for sustained childbirth. This strategy would increase the cost of delivery and rearing; thus, discouraging individuals from having large families. The blending of these measures would reduce population growth rates in LDCs; hence, creating a foundation for economic growth.
Works Cited
Creanga, Andreea A, et al. “Low Use of Contraception among Poor Women in Africa: An Equity Issue.” Bulletin of the World Health Organization, vol. 89, no. 4, 2011, pp. 258–266, 10.2471/blt.10.083329. Accessed 28 Apr. 2020.
Peterson, E. Wesley F. “The Role of Population in Economic Growth.” SAGE Open, vol. 7, no. 4, 2017, p. 1-15. doi:10.1177/2158244017736094.
World Bank (a). “Fertility rate, total (births per woman).” 2020. www.data.worldbank.org/indicator/SP.DYN.TFRT.IN. Accessed 28th April 2020.
World Bank (b). “Mortality rate, infant (per 1,000 live births).” 2020, www.data.worldbank.org/indicator/SP.DYN.IMRT.IN. Accessed 28th April 2020.
World Bank (c). “Age dependency ratio (% of working-age population).” 2020. www.data.worldbank.org/indicator/SP.POP.DPND?locations=TG. Accessed 28th April 2020.
United Nations Conference on Trade and Development (UNCTAD). “The Least Developed Countries Report: 2016.” www.unctad.org/en/PublicationsLibrary/ldc2016_en.pdf. Accessed 28th April 2020.
United Nations Population Fund (UNFPA). “Fact Sheet on LDCs.” 2020. www.unfpa.org/publications/fact-sheet-ldcs. Accessed 28th April 2020.