♠ Posted by Emmanuel in Development
at 1/15/2010 03:32:00 PM
"What price progress?" It's one of the things that has continually puzzled those studying development. Reiterating the conviction that there is no such things as a free lunch (Cheneynomic sympathizers aside), the gradual shift to industrialization and urbanization has often resulted in long-term changes in demographic trends. In demographics, a model for interpreting these changes in population as development proceeds is called, fittingly enough, the demographic transition model (DTM). First outlined in 1929 by Warren Thompson, it has remained quite illustrative in explaining population changes during subsequent periods.The Wikipedia entry describes the four theorized stages in the demographic transition quite nicely. Although never a perfect mirror of reality in many countries, it works well enough for more than a few instances:
- In stage one, pre-industrial society, death rates and birth rates are high and roughly in balance;
- In stage two, that of a developing country, the death rates drop rapidly due to improvements in food supply and sanitation, which increase life spans and reduce disease. These changes usually come about due to improvements in farming techniques, access to technology, basic healthcare, and education. Without a corresponding fall in birth rates this produces an imbalance, and the countries in this stage experience a large increase in population;
- In stage three, birth rates fall due to access to contraception, increases in wages, urbanization, a reduction in subsistence agriculture, an increase in the status and education of women, a reduction in the value of children's work, an increase in parental investment in the education of children and other social changes. Population growth begins to level off;
- During stage four there are both low birth rates and low death rates. Birth rates may drop to well below replacement level as has happened in countries like Germany, Italy, and Japan, leading to a shrinking population, a threat to many industries that rely on population growth. As the large group born during stage two ages, it creates an economic burden on the shrinking working population. Death rates may remain consistently low or increase slightly due to increases in lifestyle diseases due to low exercise levels and high obesity and an aging population in developed countries.
While statistical compilers rank them differently, Asian tigers have a near-lock on being the least fertile places on the face of the Earth. For the period 2000-2005, the UN says Singapore had a fertility rate of 1.35, South Korea 1.25, and Hong Kong 0.94. (There are no statistics from the UN on the Republic of China or Taiwan as it isn't a member, of course.) However, this recent TIME report quotes statistics suggesting Taiwan has overtaken Hong Kong to become the world's worst no-kiddo zone. The forthcoming demographic vacuum has caused alarm and occasioned some government action:
"This is a tragic society," Taiwan's Health Minister Yaung Chih-liang proclaimed in a Nov. 28 speech at the National Science and Technology Museum. He warned that if the island continues on this track, the population would experience a future labor shortage and that the next generation of children would have significant difficulty covering the health costs of their aging parents. That intense financial pressure, he said, could raise the future suicide rate. The Education Minister, in a separate statement, predicted that one-third of Taiwan's colleges will close in just 12 years if the trend continues.Should migration be the encouraged to counter these demographic trends? Singapore's example is illustrative of the challenges in accommodating large-scale migration. It's a mirror image of debates occurring in the Western world:
In a society where the cost of living is high, the notion that kids are an unwelcome burden — taboo in many cultures — has become an accepted idea. Take the title of a recent panel discussion put on by Taiwan's Human Social Sciences Foundation: 'Having Children! Does It Hurt That Much?' "The hurt," explains the foundation's president, professor Liu Pei-yi, "refers to financial loss." In a research poll administered by Kun Shan University in 2007, students interviewed 100 residents of Taiwan between the ages of 20 and 40 about their family plans. One-third didn't plan to have any children for fear of losing two precious things: money and freedom.
Balancing work and family life has proven to be a challenge for both men and women in Taiwan. According to the Swiss-based International Institute of Management Development, Taiwanese work some of the longest hours in the world, averaging nearly 44 hours a week, and Taiwan's women are very career-oriented. "Most women are afraid of losing their jobs" by taking time out to have a child, says Liu. He says Taiwan should follow the lead of European countries like Germany, where women are entitled to up to three years of maternity leave by law. Taiwan has been making progress in this area; in 2002, the government passed a law requiring companies to allow their employees two-year parental leaves without pay. This year, a policy came out that enables parents to take six months of parental leave while receiving 60% of their salary. But many say these changes only look good on paper, as most bosses discourage people from taking the time off.
By some estimates, a third or more of Singapore's 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations.At the same time, though, foreign workers have driven up real estate and other prices and made the city-state's roads and subways more congested. Their arrival has kept local blue-collar wages lower than they would be otherwise, exacerbating Singapore's gap between rich and poor.Asian tigers will invariably use a combination of incentives for increasing birthrates (paid maternity leave, larger tax breaks for families, etc.) and attracting skilled migrants (visa requirements skewed towards college graduates, residency opportunities, etc.) to deal with this issue. But to me, the question is, hasn't everyone else in a similar situation tried doing the same?
Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 207—a phenomenon that could eventually translate into lower standards of living...
On Temasek Review, a Web site dedicated to Singaporean affairs, one writer recently warned Singaporeans would be "replaced" as "3rd class citizens" by foreigners, while another said that immigration "will emerge as the single most important issue" in Singapore's next general election, due by 2011.
Immigration "kept our economic growth high but, at a tremendous cost," says Kenneth Jeyaretnam, the secretary-general of Singapore's Reform Party, a small opposition party founded in 2008. Relying on foreign labor to help boost growth is unsustainable, adds Choy Keen Meng, an assistant professor of economics at Singapore's Nanyang Technological University. He says a better model would involve the reining in immigration and accepting that Singapore is becoming a more mature economy like the U.S. or Europe, with a long-term growth rate of 3% to 5% a year...
Still, Prime Minister Lee Hsien Loong, speaking at a Singapore university in September, said there was a need to be "mindful of how quickly our society can absorb and integrate" new arrivals, and vowed to curb immigration.
The government is also studying immigration as part of a wide-ranging review of the city-state's economic model launched in 2009. Results of the review, due this month,are expected to include steps to diversify Singapore's economy and reduce its reliance on exports to the United States and Europe by boosting domestic consumption, among other things.
Yet people familiar with the government's plans say it is unlikely to press for deep cuts in immigration, and will aim to find other ways to restore productivity growth. Singapore remains committed to a long-term goal of increasing the population to 6.5 million, though it would do so by prioritizing high-skilled residents as opposed to blue-collar workers. Immigration "is not a weakness, it's a strength," said one person familiar with the long-term economic planning process. "People want to come here, why not make use of that strength?"
In these societies at least, children truly are a blessing.
