India must use its demographic dividend to its advantage

The release of the UN World Population Prospects 2022 edition last month raised a few eyebrows thanks to some of the projections it made. Ahead of the global population reaching the landmark of 8 billion in the next few months, the most significant demographic news since the introduction of China’s one-child policy in 1980 is that India is set to overtake it during the next year to become the world’s most populous nation. By 2050, India is projected to have a population of 1.66 billion — way ahead of China’s 1.31 billion.
Amid an international community recalibrating its policies to either best contain or engage with the specter of China’s “sleeping dragon,” demographic realities will force another shift as India’s position in global affairs changes.
There is no doubt that China is aiming to become the world’s largest economy and, in some respects, it already is. However, more recently, Beijing has deployed huge resources in an effort to become the leading global superpower. In the Global South, it has had significant success in this regard, recalibrating relationships in Asia, Africa and now Latin America, where once the US was the chief international partner of choice and hegemon par excellence.
Despite the overwhelming emphasis on propaganda at home capturing Chinese aspirations to be No. 1, officials speaking to international audiences are more coy about their nationalistic ambitions. Earlier this year, Deputy Foreign Minister Le Yucheng declared that China had “no interest” in becoming the world’s biggest economy or superpower, but rather was interested in improving the lives of ordinary Chinese. The irony of such statements is not lost on long-term frenemy India, whose 3,500-km border with China is as long as the list of grievances it has with its regional rival.
The demographic news, though long expected, would have left disconsolate faces in Beijing, with the shift happening sooner than anticipated. China’s global project has been underscored by its demographic superiority, but as it slows both economically and through the absolute decline in its population, which is expected as early as next year, its foreign policy calculations will require some adjustment.
As cracks have developed with Beijing’s “socialism with Chinese characteristics,” the country has focused on a nationalistic foreign policy agenda worlds away from the isolationist tendencies of the past. However, since India became the world’s fastest-growing economy in 2015, China’s obsession with marking its zone of orbit has drawn it into contention with New Delhi. The aggressive face-offs and skirmishes along the Sino-Indian border in recent years have been an illustration of such.
India’s increasing population will put additional pressure on resources, which are already stretched, likely pushing it toward a more confrontational policy vis-a-vis Beijing. This year, the Stockholm Peace Institute ranked India’s military spending of $76.6 billion as the third-highest in the world. A world that is only now waking up to the excesses of China’s ambitions is likely to make the same mistake with India, as a reckless policy of Hindutva at home will reflect itself in the country’s foreign policy calculations.
However, much as China has failed to replace the overwhelming force of American civilizational export, India — despite being the world’s largest democracy — will also struggle to force its agenda without a soft power strategy to match.
Division in India is growing. How the government will continue its prejudice policies when its Muslim population lurches toward the 300-million mark will be a test of its increasingly fraught federal system. Such division thrives among the competition for jobs and resources while the government underinvests in basic services. India only invests 1.29 percent of its gross domestic product on health. Interestingly, China spends 6.7 percent. India’s education spending, at about 3 percent to 3.5 percent of GDP, is also way below the global average of 4.2 percent. India’s population growth will strain an economy that already does not create enough jobs, potentially turning its new demographic dividend into a liability.
The McKinsey Global Institute has warned that India needs to generate 90 million non-farm jobs between 2023 and 2030 in order to absorb new workers. It estimated that, to create jobs at such a massive scale, India’s GDP will need to grow by a sustained 8 percent to 8.5 percent annually over the next decade. Therefore, though recent news is significant — and India will see a growth in its influence given its demographic realities — it may miss its hegemonic moment if it continues to stratify the rich diversity of its society according to religion and caste, thereby failing to capitalize on its pole position in terms of population.

India’s population growth will strain an economy that already does not create enough jobs, potentially turning its new demographic dividend into a liability.

Zaid M. Belbagi

In any case, large populations eventually decline. Europe’s peaked at 747 million in 2020. And the recent UN study predicted that, by 2100, the world’s population, though having increased to a potential 12 billion, may very likely be in decline. Even India, where the total fertility rate — the average number of children that are born to a woman in her lifetime — has declined from 2.2 in 2015-16 to 2.0 in 2019-21, will eventually see negative population growth.
The coming decades will see whether India is held down by its great numbers or if it uses them to become as important as the subcontinent is large.

• Zaid M. Belbagi is a political commentator and an adviser to private clients between London and the GCC. Twitter: @Moulay_Zaid