Can Nepal reap benefit from demographic shift?

KATHMANDU:

If the latest estimate of the Central Bureau of Statistics (CBS) is anything to go by, people aged 15 to 49 will make up around 55.50 per cent of the country’s total population by 2031.

This means a large portion of the population will comprise people of working age group at that time.

This is very good news for the country because such people can make active contribution to the economy, and give a lift to the gross domestic product and per capita income.

But to reap maximum benefit from the demographic shift taking place in the country, proper policies must be framed, especially on job creation, a latest Asian Development Bank (ADB) report says.

The CBS data show that Nepal’s population will top 33.60 million by 2031, of which 51.40 per cent will be female and 48.60 per

cent male.

Of these people, the share of people aged 15 to 49 is expected to reach 55.50 per cent, as against 50.60 per cent in 2011. Furthermore, the share of population below 24 years is projected to peak at 51.50 per cent in 2018 and then gradually decline to 41.80 per cent in 2031.

This indicates growth rate of working population will be higher than those dependent on them. This will reduce spending of people of working age group on dependents, like children. The money, thus, saved can be invested in the productive sector or used to provide better education and healthcare services to the offspring, which will, ultimately, raise the standard of human

capital. This phenomenon is called demographic dividend.

But for such chain effect to take place, the economy should have the capacity to engage people of working age group in productive activities.

“(For this), the economy needs to generate enough job opportunities by investing heavily in infrastructure — sectors such as energy, transport, ICT, urban development — and human capital to galvanise the youth into building a strong and resilient economy, which should be characterised by a meaningful structural transformation and an accelerated inclusive economic growth process,” ADB report says. “The country will also have to effectively utilise knowledge, experience, and technology of other successful counties to ensure that such a process picks up high momentum in this short window of opportunity. Then only will the youth be more productive and competitive during their working years.”

If not, demographic bulge will continue to be a burden to the economy, resulting in more temporary outmigration for overseas work, adds the report.

Source:THT