I have been lending brain power to an idea that resides in an argument suggesting that population growth is critical to achieving economic growth. I also want to suggest that population growth is also what jump starts a nation’s economic engine towards economic success.
The first question to ask is why would I be thinking like that?
So here is why;
Greece vs Singapore
Let us look at Greece for example on one hand, Greece population growth has been experiencing a marginal decline in population over the last couple of years and has not had a robust population growth in the last fifty (50) years. A mere 32% aggregate population growth from 1960 to 2015, this coupled with an aging population with progressive retirement age and high youth unemployment. Singapore on the other hand, is a different kettle of fish when compared to Greece in population growth over a similar fifty (50) years period as they experienced an aggregate population growth (Singapore) of 232% and would appear to have continuous pop growth going into the near future, at least for now. Both countries have high debt to gross domestic product ratios when compared though not necessarily in the same magnitude, but high nonetheless.
Greece is currently experiencing economic turmoil with the IMF and euro zone on its back and that in addition to a debt to GDP burden in the range of 180%. On the another continent outside of Europe, the Singapore economy has a debt to GDP rate of 99%, but no economic turmoil or at least no breaking news to run the circuit. I used Singapore as a comparison because they have no crisis in population growth which has essentially grown by 28% over five years and going. A complete reverse situation to Greece in term of population growth.
Nations need hands on board to do the work and to produce in order to boost export and improve gross national income. Nations need bodies to run factory floors and move goods and provide support services. The Greece challenge (video) will not go away without government spending and since debt repayment is competing for that dollar, the only thing that can help is the engagement of more people on the economic beltway.
An rapidly aging population does not help a country’s cause enough to sufficiently grow the economy unless with massive government spending as is the case with Japan who decided against austerity like Greece.
I move now to draw my conclusion in saying that; with a slow to no increase in population growth rate, a country runs the risk of experiencing a slow to no economic growth rate almost in lock step.
What I’ll say finally without the full test of all the numbers per country is that a growing population commands more;
- housing solution (construction)
- learning institutions (education)
- support infrastructure (transportation)
- banking services ( financial and insurance)
- ICT development (communication).
The country’s economic engine will jump start on these five pillars as long as the political conditions are stable, the impact of crime is tolerable and natural disaster is kept at bay.