The economics of population growth

THE cliché “an increase in population is not an additional mouth to feed, but additional hands that will feed the mouth” is one of the most common excuses by advocates of religious conservatism with reference to justifying population growth. This so-called truism, meant to establish moral traditions, has more often than not hindered the Philippine government’s thrust of economic development.

There is no need to enumerate a litany of niceties that will prove to all and sundry that countries that have high population growth are the ones least developed. We need not go far to prove the overwhelming truths behind that unabated increase in population serves to hamper economic development.

In the early 1960s when the Philippine population was less than 25 million, the economic growth rate was almost always running to double digits. Those were the glorious days of the Philippine economy when the exchange rate was somewhere between P2-P4 to the US dollar (the rate today is around P44 to the dollar). The quality of problems that beset the nation now was unthinkable during that time. Despite relatively “cheaper wages,” labor unrest was taboo because people could uphold their living standard. Government leadership was less of a factor in the economy, because if there was any problem along this line, it was well within the reach of the national leadership. Hands-on management was attainable because of the trimness of the population, and delivery of basic services could be done promptly without much bureaucratic interference.

Perhaps those in control did not foresee the damage that could be created by unabated population growth or, more likely, their religious ideologies may have confined them to the false belief that God commands man to “go forth and multiply” without regard to the responsibility that goes with it.

The belief in population growth as additional hands that will feed the mouth has long outlived its efficacy. In fact, the only thing that has been consistent insofar as the Philippine scene is concerned is that the steady growth in population (at an annual rate of 2.3 percent) has complemented the country’s poverty incidence. Poverty incidence refers to the proportion of families (or population) with per capita income less than the per capita poverty threshold to the total number of families (population) (1997 Philippine Poverty Statistics, National Statistical Coordination Board, or NSCB). Poverty threshold or poverty line, on the other hand, refers to the cost of basic food and non-food requirements (valued in pesos). The basic non-food requirements cover the non-food expenditure items of total basic expenditures. In official Philippine methodology, the poverty line may be viewed as the minimum income required that meets food requirements and other non-food basic needs (NSCB Philippine Poverty Statistics 1997).

The 2001 data stated that the Philippines was ranked No 40 among countries in the world that have a high incidence of poverty, together with Guinea, Mexico, Laos and Iran. All these countries occupy the infamous status that 40 percent of their people are living below the poverty line (CIA World Factbook 2003). While Southeast Asia (including the Philippines) reduced its extreme poverty rate (defined as earning less than $1 a day) to 31 percent from 41 percent in 1990, the region’s absolute poverty numbers dropped by only 34 million people to 428 million because of rapid population growth (Taipei Times 2004).

While people at this point may still be enjoying the liberty of raising the number of children they want, it is noteworthy that this freedom cannot be enjoyed in the long term. This is despite the fact that the resources that were available in the past years have doubled through technological advancement. Even if the local economy has not retrogressed, the growth and productivity of resources has not coped with the growth in population. Population growth has exerted tremendous pressure on the economy to the extent that, despite growth and productivity, the rate at which the economy grows is not enough for its benefit to be felt by the proletariat.

To borrow the idea of Thomas Malthus, population must be trimmed to the level of subsistence. In his essay “The Principle of Population”, he prophesied the geometrical progression of the population and the arithmetical progression of the means of subsistence. His theory states that population, if unchecked by prudent regulation of marriages and birth, can and in all probability often will outrun subsistence, owing to the law of diminishing returns. Although Malthus’ theory has not been embraced by modern-day economic demographers, current trends prove its broad suitability. Eastern Europe and Central Asia, which had poverty rates of almost zero in 1981, saw the rates climb to 6 percent in 1999 because of high unemployment and declining output, primarily a result of accelerated population.

Fertility declines accounted for one-fifth of the economic growth in East Asia between 1960 and 1995. The reality is that least-developed countries have the highest fertility and population growth, and their populations are expected to triple in the next 50 years, from 600 million to 1.8 billion (United Nations Population Fund, or UNFPA, 2002). Aggravating the situation is the fact that least-developed countries have the least access to technological innovation, which is a highly important factor that can redeem them from hunger and environmental degradation, the two fatal results of population density. This phenomenon furthers the incidence of poverty as competition starts to take its toll on people with less purchasing power, because those with means will monopolize limited and available resources. Poverty, however, is more than a lack of income. It is characterized by insecurity, inequality, poor health, and illiteracy. Its effects are exacerbated by the very wide gap in most societies between the richest and the poorest (UNFPA, 2002), not to mention the high incidence of felony that goes with it.

An intensive information drive on proper family planning seems to be the only alternative that can save the day for the Philippine economy. Proper family planning programs have proved to be responsible for almost one-third of the global decline in fertility from 1972-94 (www.unfpa.org 2004). These programs should be implemented with the go al of attaining equilibrium between society and nature or, more specifically, the resources available at a given point in time.

To attain equilibrium between nature and man, we need not appeal to the Malthusian principle of population that in order for population to attain equality with resources there should be natural checks by nature attained through sickness, pestilence and other natural calamities. –E. J. LOPEZ, Manila Times

EJ Lopez has a Doctorate Degree in Economics and is a Professor of Economics and a Chair of Social Sciences of the Faculty of Arts and Letters and Graduate School, University of Santo Tomas, Philippines. Email address: doc.ejlopez @gmail. com or ejlop@yahoo.com.