Reaping Demographic Dividends  


Ratna Prajapati

Recently the National Planning Commission (NPC) and the United Nations Children's Fund (UNICEF) jointly launched a report titled “Study on Demographic Changes in Nepal: Trends and Policy Implications”.

As defined by the United Nations Population Fund (UNFPA), demographic dividend is “the economic growth potential that can result from various shifts in a population’s age structure, mainly when the share of the working-age population (15 to 64) is larger than the non-working-age share of the population (14 and younger, and 65 and older)”. Working-age population provides very favourable conditions for fast economic growth and overall socio-economic development of the country.

Rapid change

Nepal has been experiencing rapid demographic changes over the last few decades. This is mainly due to the decline in the fertility rate and increase in life expectancy. According to data of the Central Bureau of Statistics (CBS), the total fertility rate (TFR) of a woman throughout her lifetime is 2.52 children. Similarly, the crude birth rate is 22 per thousand and the crude death rate (CDR), which shows the number of deaths per thousand, is at 7.3. Health facilities are substantially increasing and improving in the country, and life expectancy has also increased within a short span of time. According to the CBS data, Nepal's average life expectancy at birth is 66.6 years.

Generally we think that rising population is a social as well as economic burden, which impacts the society and the national economy. The government may be compelled to fulfill the demand of the rising population to ease their daily lives. On the other side, we can perceive it as a major source of support for the nation’s socio-economic development. That’s why demographers, planners and policy makers stress the development of quality human resources and proper human resource management. As demographers say, to develop and manage quality human resource, all plans and policies should focus on adjustment of population to the requirements of development of the economy; whereas, development economists argue that adjustment of the economy is needed according to the requirements of population. In the context of Nepal, both situations can be considered. So, the policy makers should formulate effective policies taking into consideration the issues of demographic transition with the help of demographers and development economists.

Focusing on demographic dividend is significant for the nation, and its benefits should be reaped on time. Due to very fast demographic transition, Nepal has finite demographic window of opportunity period. According to the aforesaid study report, the demographic window of opportunity for Nepal began around 1992, and will start to close in another 30 years around 2047. The total duration of Nepal’s demographic window of opportunity is altogether 55 years, and the country has already passed half of it. Nepal will gradually become an aged society from an ageing society. This will slow down Nepal's development.

The study report states that the number of years Nepal will take to transit from ageing society to aged society is 26 years. Nepal will transit into an ‘ageing society’ by 2028 and an 'aged society' by 2054, another 11 years and 37 years, respectively. According to the latest census data, there is 56.96 percent working-age (15-59 years) population whereas 34.91 percent is children (up to 14 years) and 8.13 percent is aged (above 60 years) population respectively. Nepal's total population growth rate is 1.35 percent, and it will double in the next 52 years. The growth rate of the aged population, above 60 years, is 3.07 percent. So, the government must take required steps so that demographic dividends can be used to the fullest. Experts’ views indicate that we can only move forward on the path of socio-economic development when we make prioritised investment in today's children and the generations to come so that they become more productive than today's adults by the time they reach adulthood. Also, we need to invest more on today's children to enable them to support the growing aged population.

Similarly, as stated in the report, 11.1 % working-age population is supporting one aged dependent person in Nepal. Due to low birth rate, fewer numbers of children are being born these days. This will severely decrease the number of youth or working-age population in the near future. Plus, people will live longer due to easy access of health services to some extent. Due to these two reasons, only 5.6 working-age persons will be supporting one old-age dependent person by 2050 and 3.8 working-age persons will be supporting one aged dependent person by 2060. These scenarios show that more aged population will be added and their lives will become more challenging and vulnerable.

Youth migration

Due to lack of employment opportunities in the country, more than four million Nepali youth have been working overseas. They are underpaid. Compensation in the form of remittance has become the main as well as basic source of income of the family. With the help of remittance, not only their family, but the nation's economy has been stable. So, significant contribution to the nation made by Nepalese workers working overseas cannot be overlooked.

Nepalese youths have been contributing to the development of foreign nations. If effective plans and policies can be formulated and implemented for socioeconomic development and national building, Nepal can go one step ahead of its current status. Unfortunately, Nepal's politicians as well as policy makers have ignored these opportunities; they have not understood the reality, and they have not tried to focus on it. Out of Nepal’s total population, 40.35 percent comprises youth. No doubt, they are the working-age population and can provide great demographic dividends too.

To sum up, there are altogether 37 years, according to the report, to reap the benefits of demographic dividends in Nepal. It is a very short span of time. Therefore, the government should make effective plans and policies to ensure the benefits of demographic dividends. If appropriate policies and work plans are formulated and implemented immediately, the country could succeed in acquiring the best out of the population for the economy and its citizens.


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