Population Growth and Economic Development: South East Asia Perspectives

Abstract

Given current growth rate in different parts of the world, significantly higher in the LDCs, the regional distribution of the world’s population will inevitably change by 2050. Increased dependency ratios, massive income inequality, and natural resource limitations are likely to negatively affect the economic growth in Asia, Africa and Latin America. Although population growth has a whole negative impact on economy, the growth of working age people has a strong positive impact. Demographic variables played a large role in East Asia’s economic success. Increases in life expectancy have a large effect on incomes in East Asia. A rapid decline in fertility led to a substantial reduction in youth dependency ratio, thereby helping to boost growth rates of income per capita. Asia’s experience suggest that population change and productive growth are not independent. Policy-induced changes in demographic and economic variables can promote a virtuous cycle of cumulative causation in which economics and demographics interact in a mutually reinforcing way. Population’s positive impact is most likely to occur where natural resources are abundant, where the possibilities for scale economics are substantial, and where the markets and other conditions (especially government) allocate resources in a reasonably efficient way over time and space. Substantially, demographic change combined with sound and efficient economic policies facilities the way toward development.