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Can soaring population give India an edge over China?


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September 19, 2006

Can soaring population give India an edge over China?

Bruce Einhorn

India’s population is exploding and is likely to surpass China as the world’s biggest within a few decades. In a country where more than 25% of the people live in poverty, is that a good thing? One of the top executives at India’s premier pharma company seems to think so. Last week Brian Tempest, the former CEO and current “chief mentor” at Ranbaxy Laboratories, told an industry gathering that the growth of India’s below-25 population “is going to act as a secret weapon in the future,” according to this report in the Hindu. Tempest went on to take a jab at China, saying that slower Chinese population growth would put the Middle Kingdom at a disadvantage. Says Tempest, “the one-child policy in China will play a spoilsport.”

The logic is simple. Fast population growth equals more young people, and more young people equals a more dynamic work force. According to the Indian Express, citing India’s Ministry of Labour and Employment, India already has an advantage over more advanced economies. The median age in India in 2000 was 24, compared to 30 in China, 38 in Europe and 41 in creaky old Japan.

However, most of those Indians live in the countryside, and it’s no secret that India’s rural population is not sharing in the boom enjoyed by people in other parts of the country. In the past, Asiatech blog readers have written in to debate the merits of India’s development model versus China’s, and the topic of population growth has come up a lot. I’m no fan of China’s one-child policy, and I definitely am not advocating that India adopt anything like it. (Aside from the obvious human-rights problems associated with the policy, some experts argue that the slowdown of China’s population growth came before it even went into effect. For instance, see this article from the New England Journal of Medicine.) Given what happened when Indira Gandhi tried to take action to control the population, it's also understandable why lots of Indians oppose the idea of the government getting involved now to keep the growth rate down. Maybe there is nothing that politicians can do to slow India’s march to be No. 1 in population. But if the Indian economy is really going to benefit from all those young people in its population, policymakers should at least focus a lot more on the problems of rural India.

05:56 AM

Pharma

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India should invest more money on education and improve its literacy rate. According to CIA World Fact Book, China's literacy rate is 90.9% and India's literacy rate is only 59.5%.

Literacy is an indispensable means for effective social and economic participation. It is hard to imagine that a larger population can give India a competitive advantage if its literacy rate is substantially lower than that of China.

Posted by: Tom at September 20, 2006 05:08 PM

In the era of scarce resources, India's explosive population isn't a responsible decision. Moreover, the only advantage India will have over China is the transfering of low cost manufacturing from China to India. Well, China won't need those sectors as it pursues the hi-tech sector. In fact, if India can't provide jobs for the newborn babies, they may cross the border to neighboring countries such as China, legal or illegally. What can China do to address the shortage of labor in the future? China can always invest in robotic technology.

Posted by: Andy at September 21, 2006 01:36 AM

Please go through a recent report by Teamlease which mentions the horrible unemployment situation in India by 2020.

Posted by: Steve at September 24, 2006 09:12 PM

I am Chinese. I see things really changing because of the one-child policy. I am no fan of this policy though. I agree China should generally give up the population control policy. In some cities it actually has happened in recent years. (The one-child policy doesn't mean that every family can only have one child. It's misleading. I was born after the policy was carried out, but I have a sister. And three out of five of my roommates in the university also have brothers or sisters.) For India, I don't think it would be a good idea to gain the so-called advantage from a large population. Low income, worse social security, higher competiton in educational resources might follow the fast population growth.

Posted by: jane at September 30, 2006 01:36 PM

India has complete advantage due to its young population base over many other countries in coming years. Today India has more then 55% of its population in working age group and this is really a benefit if we see it in economic terms. The window of opportunity provided by a relatively large and young workforce, a result of the demographic dividend, has opened for India. The policy environment, however, is not conducive for exploiting this advantage. There is urgent need for government intervention to provide work for all and make a rational policy to reap the benefit of this working population. It will certainly give India an edge over other rising economies because of the avaibility of cheap labour and low cost in all production sectors.

Posted by: Lokpriy at October 5, 2006 02:21 AM

More people = more mouths to feed = more strain on our scarce resources = more people fall ill = more medicines sold.

Sure - having a bigger population than China is a wonderful thing ... but only to a PHARMACEUTICAL company executive.

If I had any Ranbaxy shares, I'd have sold them on principle.

Posted by: Gourav at October 6, 2006 12:26 PM

I think Globalisation is opening up labour markets and I don't see India having to worry about feeding its teeming millions. The West is aging. So is Japan and China. They need manpower. India's biggest export in the 21st century is going to be its manpower which includes high end, low end and even unskilled workers. Moreover by 2030 the Indian population is going to stabilize around the 1.6 bn mark. It is a very refreshing thought to have so many determined and enthusiastic young guns enriching Indian democracy and saving them from the clutches of the present crop of old men. The demographics are already having a positive impact on the polity.

Posted by: Vineet at October 9, 2006 04:48 AM

India can not provide a decent standard of living for the population it currently has. The country has 900 million people without potable water or a toilet. A larger population will not gain India any more respect than getting the bomb did. And what good will it do to have a billion people earning low wages and manufacturing for other countries, when few people in India will ever earn enough to buy any of these goods. India, and the world, have limited resources and another half billion Indians without a toilet can not be a good thing.

As for Ranbaxy. Recall that this company rose to wealth through theft of patented drug formulas in violation of international law. If India wants to be a truly great country, it might try to earn some respect in some manner besides becoming an even larger source of untreated sewage.

Posted by: Bob at October 10, 2006 07:38 PM

The Indians are too optimist that the world will need their manpower in the future. The US has lost their manufacturing jobs not only to outsourcing, but also to robotic technology. When the robotech mature in the future, the world will need less manpower. It will be intersting to see how India will cope with its billion unemployed people. Indian's neighbors should invest in border security from now on.

Posted by: Andy at October 11, 2006 02:31 PM

Andy,the world already requires our manpower. It s not some futuristic assumption. We have already done the difficult part of political reforms and now we are reforming economically. I'm afraid I can't say the same about China. Ask the repressed Chinese. They will flock in millions to India if they get a chance. Poor fellows can't even determine the number of kids they are allowed to have.

Posted by: Vikram at October 18, 2006 11:10 AM

@vikram

The last time I checked, China has ten times more foreign investment than India.

Chinese will flock to India? Hmm, maybe if you already have roads, houses, airports (otherwise do you expect Chinese jumbo planes land on your paddy field?) or at least a decent bathroom. Oh, and do something with that smell too. Until then,most Chinese are satisfied to stay in their high rise apartments in China. India might have a democratic system, but not a democratic mentality. In India, the low caste, minorities, and women are treated poorly. There is no law but tradition in countryside.

Posted by: Andy at October 23, 2006 02:45 PM

@vikram

poor Indians, they don't know what to do with all those kids. Only in India, you can buy children and rent a wife.

Posted by: Obi_wan_snoopy at October 26, 2006 01:22 AM

I see how ill-informed the West continues to be about India. Talking of bathrooms in India, I saw exactly the same bathrooms in Krakow, Poland. Did you realize that there are "western" countries with far worse standards of living? Poorly informed West = less flow of western capital = excellent continuing investment opportunity in India. Excessive capital inflow in China = whoever put there money there is going to have to tolerate subpar returns. ... Go ahead, complain about the bathrooms in India. Vinod Khosla, Lakshmi Mittal, and even the unlikely Deutsche Bank will walk away with the cake. ... Keep it up, let the investment opportunity live! Once you have realized -10% returns annually in US and Japanese stock markets, you will figure out pretty fast where you should have put your money. If the dollar still survives your swashbuckling borrowing habits, that is.

Posted by: EyeDee at November 3, 2006 03:53 PM

yes india does has a very large population and if this continues to increase at this rate then there is going to be a lot of problem for survival.food produced will not be enough to feed such a large population.per capita income will decrease.per capita land availability will decrease.evrything will become expensive thus bringing down the standard of living to a great extent.

Posted by: akshat at November 10, 2006 01:55 PM

population control should be the most important thing for india right now.

1. the chinese are doing that and they are not stupid.

2. I would prefer less investment in india to a environmental and human disaster borne by high population.

3. too much of population would put enormous stress on scarce resources.

4.Means more people density, which is not worth even if we continue to get more investment.

5. We shouldn't have big population just to get work or investment from developed countries.

Posted by: satya at December 29, 2006 03:41 AM

My opinion is that India should begin to adopt stricter population control. Large, young demographics is indeed an advantage. But this is provided that they are skilled/educated, or that there will be enough jobs in the future to employ their manpower. Otherwise, it's just a "useless" human capital. Another point is resources. Is there enough grains, water, oil, trees, energy, etc to make this ever-larger population live like Western standards? China is right in controlling its population. Too much people is an advantage now, but big problem for future. The ideal population size for China is I think should be around 0.5 to 1 billion, and also for India, or for any "large" country.

Posted by: Aaron at January 5, 2007 03:31 PM

i think indians are more resourceful than chinese dudes

Posted by: dre at January 17, 2007 10:19 PM

Its premature to realistically consider India an emerging power. To date it has shown absolutely nothing to prove it has the will or capability to challenge the current world power, the US. So far only China, Europe, and Iran have been able to mount a challenge to US supremacy. India has too many internal problems and polarization. Among Hindus the caste system keeps many marginalized. There is also a lot of friction between Hindus and Muslims, India has the second largest Muslim population in the world, it will have to successfuly integrate is Muslims in order to maintain a peaceful existence.

As a whole for Asia, Democracy does not work. It works in Japan and South Korea because of the US presence in both countries. China is progressing at an impressive rate, and many cities are almost as modern as those in the West. China is also ethnically uniform with 92 percent of the country being Han Chinese, India has many different ethnic groups that don't understand each others languages.

Posted by: Edmund at January 22, 2007 08:54 PM

Before resorting to jab India with population control lectures, make sure to read the article.

It says the the CEO of a Pharma company said, the population growth could be beneficial to the country.

Now, that is his opinion. This is certainly not the general opinion. The govt is doing their best to keep the population growth on check.

All the hyper growth is happening in the poorer sections of the society. Among the middle and upper segments, it is almost like a one child policy. Most of my friends have just one child. Even my parents more than 30 years ago had only two.

As the level of education gets better, I am sure the population growth will reduce.

Chinese contributors: Stop hiding behind the facade of skyscrapers, cellphones and cars.

Posted by: ammadio at January 23, 2007 03:45 AM

All you Americans, sort your own problems first before trying to patronize others.

Posted by: Samarth at January 29, 2007 07:02 AM

I think because of demographics, India will have the potential to be a more powerful country than China one day. But potential is different from a sure thing. Climate change, which will accelerate with the rise of the vast developing world, is estimated to decrease worldwide grain outputs. That's fine if you are Canada or Russia, the countries that will inherit new wheat belts, but not for India or China. Even rice will move north, something that is worse for India than for China. Not to mention, the future water problems that will compound these issues. It's true that globalization means we can buy food, but most countries don't like signing away food security, and who says there'll be enough food for everyone? In short, India better be damn sure about the future if it is going to bet so heavily.

As for China, I disagree with the one child policy because in my opinion it causes more problems than it possibly solves. I think at least it should be a 2 child policy like Vietnam's, and then gradually there should be no policy at all. Development will naturally slow down pop growth and China doesn't want to play second fidel to India, even if it takes a hundred years for it to happen.

Posted by: Lawrence at January 30, 2007 04:08 AM

Having a lot of working age people helps. But it depends heavily on what opportunities the country can provide. Before economic liberalizations, we had it bad. Now we are somehow optimistic to believe it can get only better. India might not look like an another western country or even like china with all the sky scrappers and shiny roads, but better in our own way, moving slower, with all the mess. I think moving slower with the mess is better than losing your freedom or getting influenced on your decision to have children. It is almost in the same line as the argument about abortion is dealt in US. Here we dont argue about that stuff. Its legal or illegal, all we have is total freedom.

Posted by: Samy at January 30, 2007 12:06 PM


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