QUESTION TIME It was an ironic experience for me the other day in my car when I heard BFM radio’s evening show which focused on the incentives the government was considering to encourage people to have more babies.

Ironic because I was stuck in a major traffic jam and there were just too many cars, motorbikes, lorries, trucks, buses, etc - all caused by too many people in the city for comfort. With all that crush of humanity crowding into KL, do we really need to be concerned about the declining fertility rate? Or does the government have a secret agenda over this? Shouldn't it be obvious that we have too many people, in KL at least? Let’s take a look.

It was reported last week that the government will introduce incentives to arrest the nation’s declining fertility rate (birth per woman), including providing ‘baby bonus’ to parents as adopted by Singapore, quoting Women, Family and Community Development Minister Rohani Abdul Karim.

She said the ministry was compiling information on ways to address the decline, including the ‘baby bonus’ programme, which would be submitted to the Economic Planning Unit to be  included in the 11th Malaysia Plan. The fertility rate recorded a drop from three children in 2000 to 2.4 children in 2010 and is currently at 2.1 children, reports said.

Among the reasons are delay in marriage, increasing number of women in higher education institutions, work factor and cost of raising children. “Malaysia is not the only country facing this problem as other developing nations also face the same difficulty. This issue needs to be addressed or it will lead to a decline in human capital within the next 20 or 30 years,” she reportedly said.

Is that really true?  The table on Malaysian population statistics extracted from the Statistics Department shows the fertility rate to be about the same between 2010 and 2013 at 2.1, that is the average woman of childbearing age will have 2.1 children in her lifetime. There is no decline as the minister said. But it is true that over the long term there is a marked decline but more on that later.

Let’s first look at whether the population is decreasing despite a stagnation of the birth rate. Clearly it is not, because between 2010 and 2013, the population increased 4.7 percent to 29.95 million from 28.6 million, with an annual increase of 1.4-1.6 percent.

Why is that? Look at the crude birth rate and death rates per 1,000 population. That’s hardly changed over the four years, remaining quite steady at 17.2 per 1,000 population for births and 4.7 per 1,000 for deaths, giving a net addition to population of 12.5 (17.2-4.7) per 1,000 population.

The increase in population is not intuitive though. If the fertility rate is two, then a couple will theoretically have two children and when they pass on, the net addition to the population is zero. That’s not how it works in practice though - the couple who has the children dies many years later.

Meantime their children would have married and are producing on average another two kids each to make it four and it goes on and on. It may take a while before the population growth comes down to zero - and for that to happen the fertility rate has to come down further. Ours is at 2.1 for the last four years, so no need to worry.

Sorry, that’s not quite right because the population, as we saw continues to increase even when the fertility rate is 2.1 or even 2.0. This is compounded by the increasing life expectancy which means that it will take longer before a steady state is reached. Perhaps we need to see fertility rates go down instead of up!

Unfortunately I am not an actuarist and can’t calculate these figures but really that is what the government should do - get professional help to calculate them before it blithely states that there will a reduction in human capital if the fertility rate is not increased. Right now the figures indicate that is definitely not the case.

Propagating a fallacy

The government is propagating a fallacy. It may be doing that because it is ignorant - often it is - or it may have a hidden agenda such as to increase the population growth of bumiputeras and particularly Malays to grow at a faster rate so that their percentage numbers become even more dominant.

That’s a dangerous strategy which may actually impoverish those the government purports to help most - the bumiputeras. It was during former prime minister Dr Mahathir Mohamad’s time that the name of the Family Planning Board was changed to the Population Development Board, and along with it the about-turn in emphasis to population growth from population control.

That was terribly misguided and arose out of Mahathir’s false belief that Malaysia needs to have a population of at least 70 million to have a great market for goods. Sweden has a population of less than 10 million, less than a third of our 30 million population but its 2013 gross domestic product (GDP - sum of goods and services produced in a country) of US$558 billion was nearly 80 percent higher than Malaysia’s US$312 billion, according to World Bank figures.

Put it another way, although we have three times Sweden’s population, their market is 1.8 times our market. If we enjoyed Sweden’s income level, we could have less than 10 million people but still have 1.8 times the market we now have with three times more people!

What happens when you encourage higher fertility rates and offer incentives in a country which is still developing is that the rate will likely rise among the poor, the sector which is least likely to be able to afford more mouths to feed, bodies to clothe and nurture and minds to educate. A higher fertility rate makes the poor even poorer.

I suspect this has already happened in Malaysia because of the rather ridiculous policy of the government of encouraging a higher population and in effect restricting the availability of birth control to the ones who need it most.

Without a doubt it would affected the achievements of the New Economic Policy - not the ones that politicians like to look at which is the flawed measurement of bumiputera and especially Malay participation in business - but the original noble twin prongs which are the eradication of poverty irrespective of race and the elimination of  identification of race with job function.

To put it bluntly, the high birth rate among bumiputeras contributed to them being in poverty for a longer period of time.

Finally, let’s take a look at the tables of fertility rates and population trends across countries . We have taken four others besides Malaysia - Malawi, a very poor African country, Thailand - a middle-income Asean country, Singapore - a highly developed Asean country, and the US - a developed country which nevertheless has a significant amount of poor.

Declining fertility rates, but...

First, the trend is of declining fertility rates. The more developed the country, the more likely that it would have low fertility rates. That’s mainly because people start putting their children first and reduce their numbers to ensure they get better quality of care. Also, modern life is rather demanding and there is increasingly less time for children.

Second, despite the declining fertility rates, population growth has been explosive in Malaysia and even in Singapore.

The table below shows that the population of Malaysia more than doubled between 1980 and 2013 and the growth accelerated in the period between 1990 and 2013 despite a decline in fertility rate. That was true also of Singapore. The reason that happened is because of accelerated immigration from 1990 onwards.

All of which show one thing beyond any doubt - we are not anywhere near depleting our sources of human capital. In addition to our own birth rate far exceeding the death rate, we can import, too, and indications are that both Malaysia and Singapore are doing this to maintain or even increase the already dominant share of the main communities in their respective countries.  

One must surmise that the government is less than honourable in its intention to encourage the fertility rate of the country. For the benefit of all Malaysians, including bumiputeras, we must realise that it’s not the numbers that count, it’s the quality. We must limit our numbers simply to have a better standard of living.

P GUNASEGARAM is joint CEO and publisher of business news portal KiniBiz .