Lessons are being learned from the ongoing global economic crisis. One of them is that a large and young population can partly insulate a country from the ill effects of a global recession. It should not come as a surprise that in Southeast Asia, there are three countries that are still posting positive growth rates in Gross Domestic Product, i.e., Vietnam, Indonesia, and the Philippines (VIP). Both Indonesia and Vietnam will grow at 4 percent or more in 2009. The conservative estimate of the Government is that the Philippines will grow at 2.5 percent (although I still maintain that our growth will at least be 4 percent).

The VIP countries, like the so-called tiger economies such as Singapore, Taiwan, and South Korea, are also experiencing precipitous drops in their exports (declines of 30 percent or more). Their economies are still growing, however, because their businesses can still sell to their respective domestic markets. Indonesia, for example, has close to 250 million consumers.

That is why, despite sporadic terrorist bombings, sales of consumer goods and services are still booming. Vietnam and the Philippines have each close to 90 million consumers. Their GDP is being fueled by private consumption, thanks to large and young populations.

The VIP countries also share a common feature: Their populations are relatively young. Close to 70 percent of their populations are less than thirty years old. Those who are over 65 are less than five percent (in contrast with Japan, where those who are over 65 are nearing 20 percent of the entire population). Young populations tend to consume more. They also are magnets for foreign investors from the developed countries that are looking for lower labor costs. Vietnam, for example, has been attracting some $5 to $7 billion worth of Foreign Direct Investments annually in recent years.

Among the so-called emerging markets that are led by the BRIC (Brazil, Russia, India, and China) countries, those that have the best of both worlds are those with large and young populations and are endowed with rich natural resources, such as vast agricultural lands, petroleum and other energy resources, and mineral resources. The VIP countries are among these fortunate emerging markets. If Vietnam and the Philippines are able to follow the example of Indonesia in installing good governance in the coming years, all three of them can follow the example of India and China in growing at 8 to 10 percent in GDP for at least the next two decades. Such a high growth rate will enable the three countries to significantly reduce their high rates of poverty.

The favorable demographic conditions prevailing in the VIP countries are in stark contrast with those of their neighbors to the North. As Philip Bowring reports in a recent issue of the International Herald Tribune, the city of Shanghai has recently decided to ease China’s one-child policy because of the alarming aging of the population as a result of the lowest fertility rate in the world: 0.7 births per woman of child-bearing age. As Bowring observes: “Shanghai’s situation is extreme, but it reflects a trend. A recent UN report estimates that China’s total population could peak as early as 2020. The median age was forecast to rise from 34 today to 37 by 2020 and 50 by 2050. And this pattern has been developing in other Chinese societies. Hong Kong has a fertility rate of about 1.0; Taiwan and Singapore are at 1.2. All of these are below the lowest fertility rates in Europe (Italy and Greece both have a rate of 1.2), and the rate of 1.4 for South Korea and Japan.”

The developed countries of East Asia are trying desperately to reverse their fertility decline.

Unfortunately, as Bowring reports in the same article, they have had little success despite all the financial incentives they are giving to their populations to have more babies. I hope the VIP countries will have enough sense to fight mass poverty, not with the very dubious tool of family planning and population control, but with dozens of other positive measures that are available from the tool kit of sustainable economic development, such as the education of women, the improvement of public education, agricultural and rural development, microfinance and microenterprise development, social housing, etc. The VIP countries should avoid like the plague the serious problem of becoming old before becoming rich, whose symptoms are already being observed in Thailand, a country in Southeast Asia that adopted a very aggressive approach to population control. For comments, my e-mail address is bvillegas@uap.edu.ph.