Bhutan must prepare for ageing population

The country may have long passed critical juncture. This is the nation’s worry.

Jigme Wangchuk

Vision 2020:   Population: Bhutan has witnessed significant socioeconomic development since the advent of planned development in 1961. In other words, the country has undergone dramatic demographic changes in the last six decades. Growing birth rate—once a genuine concern—has fallen to a level that today calls for reversal to at least replacement level if Bhutan is to reap the benefits of sustainable population growth. Otherwise, Bhutan is poised to face serious social problems in the long run due to ageing population and shrinking workforce.

When “2020: A Vision for Peace, Prosperity and Happiness”, vision statement that would direct distinctive development path for the country “well into 21st century” was being drafted in the 1990s, Bhutan’s population growth rate of 3.1 percent annually was among the highest in the sub-region. It was then estimated that if left unchecked, the country’s population of 549,000 would double in about 23 years. The caution to the policy-makers came in the form of Royal Kasho: “You should promote and implement the family planning programme to ensure that our people are happy with maximum development in the country while at the same time controlling population explosion.”

The Vision thus set a target of achieving a 61 percent reduction in fertility in 15 years, replacement rate of 2 surviving children per women by the year 2012 and to progressively reduce the overall rate of population growth to 1.3 percent by the year 2017 by which time Bhutan population was estimated to number around 932,000. Bhutan’s current population is just 727,145 (according to Population and Housing Census of Bhutan 2017) while the country’s fertility rate—total number of children born or likely to be born to a woman in her lifetime—has fallen to 1.7 births per woman (some documents locate the rate at around 1.9 birth per woman).

In retrospect, without a population policy that the Vision proposed early on (Bhutan still does not have a population policy), interventions were guided by the document’s flawed fertility reduction targets.  According to UN Population Division, replacement-level fertility rate is 2.1 children per woman, which sustained over a long period, each generation will exactly replace itself. Bhutan’s birth rate of 1.7 is well below replacement-level fertility rate of 2.1. Not alone is the Vision document to blame, however. Over the years, there have been remarkable advances in technology, health and education. As a consequence, Bhutan has transitioned to low fertility, low mortality, and a low child dependency ratio, which means the country is nearing demographic transition.

While launching Population Projections Report early last year Lyonchhen Dr Lotay Tshering said that falling fertility rate was sombre news for Bhutan. Statisticians are of the view that Bhutan has gone way below the replacement level which does not portend well for the country. 

The success of family planning continues to be debated. 

But then, is Bhutan’s decreasing fertility rate all that bad and worrying?

Bhutan’s support ratio—the number of effective workers relative to effective consumers—is on the rise. That means per capita income is growing, opening the door to demographic dividend—potential impact on economic growth or shift in a population’s age structure to a larger working-age population (where productivity is highest relative to the young and elderly). According to a study by Asian Development Bank (ADB), Bhutan’s demographic dividend is expected to last until 2038 after which it will decline gradually. The question is what would happen when Bhutan’s population aged 65 and above reaches more than 15 percent by 2050, as projected by ADB, corresponding to support ratio rise.

Logically, as the share of ageing population increases relative to working-age population, old-age dependency will rise and drag the economic growth down. If Bhutan lags behind in preparing for population ageing with investment in human capital and growth-stimulating policies informed by a national population policy, repercussions of falling birth rate could be damaging. If Bhutan is to achieve “viable population for national security, identity, and socioeconomic development” and succeed in integrating “population dynamics in the formulation and implementation of development policies, plans and programmes”, the country may have long passed critical juncture.

This is the nation’s worry.

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