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Macroscope | Demographic blessing or disaster? How Asia can reap its youth dividend
- Good governance, education, infrastructure and more are needed to integrate a growing working-age population productively into the economy
- In an age of deglobalisation, emerging Asia must also capitalise on its close integration in regional supply chains and free-trade agreements
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Why you can trust SCMP
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The world’s population has tripled since 1950, from 2.6 billion to 8 billion people. By the end of this century, it may reach 10.4 billion, according to the UN. The sheer size of the population can have profound implications for economic growth.
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An economy with a rising proportion of young and working-age people (15-64 years old) can deliver higher economic growth and gross domestic product per capita – usually referred to as a demographic dividend – compared to an economy where more older adults may need social services. A young population can also serve as a large labour pool and a long-term generator of tax receipts to fund older cohorts.
Yet population growth poses important risks. An economy that fails to make the proper investments to incorporate a growing working-age population productively into the labour force, to build out sufficient infrastructure in time and to ensure the sustainable use of its finite natural resources, could see disastrous economic consequences.
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Strong institutions and governance frameworks, including rule of law, anti-corruption practices, economic openness and quality public education, are also crucial preconditions.
History also suggests caution in translating population growth alone, or youthful emerging market demographics, into future economic growth.
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