Wednesday, November 24, 2010

Demography should not be a risk

Many estimates put the population of 18 to 60 year olds at approximately 60% of the total. Demographics can make or break a nation. When the decennial census results were declared recently, it was noted with alarm that the population rate was too high, with some analysts stating that the high rate placed the economy of the country in jeopardy. Recently, too, the Minister for Finance amended the Retirement Benefits Act to allow persons who had contributed to a defined pensions scheme to withdraw their savings before the age of retirement. Arguments were advanced to justify this decision, that is, because of the deteriorating economic situation as a result of the global economic crunch, many people had been laid off from their employment and needed access to their retirement benefits in order to invest in other income-generating activities.

In the West, especially in America, the level of unemployment has remained steadily high despite the economic stimulus programmes that have been implemented to rectify the situation. In France, Nicholas Sarkozy has managed to ram through a decision to raise the retirement age of state employees in the face of stiff public opposition. Britain's coalition government is defending its public spending cuts in the face of animosity from the people. Indeed, while many of them do not wish to be saddled by the cost of paying for welfare cheats' lifestyles, they are also averse to reviewing public expenditure, declaring that their revered National Health System is a national treasure that politicians tinker with at great political risk. David Cameron's government has caved and pledged to protect the NHS. Meanwhile, in Japan, the state is facing massive outlays to what is becoming a rapidly aging population which will continue to draw from the public purse for decades to come due to their incredibly high number of the population over 65 years. Life expectancy in Japan has steadily crept upwards due to its relatively efficient health-care system and standard of living. In contrast, Central Kenya is facing a declining population rate but not for the same reasons as in Japan.

The decline in the population rate of Central Kenya has been blamed on among other things alcoholism in the youth and the migration of large numbers of the youth for greener pastures, usually in the Capital and more frequently, overseas. Central Kenya has been a victim of its own success. Because of its mercantile tradition, many men and women have emigrated to other parts of the country to find their fortunes, frequently with great success. The few who have chosen to remain have a large proportion of them incapable of embodying the mercantile traditions of the House of Mumbi and have therefore, been incapable of founding and maintaining large families. As a result, the demography of Central Kenya is slowly becoming an aged one. Many homesteads are now headed by aged or aging people. In a country that still has yet to craft an effective pension strategy, this is a risk that will eventually catch up with other parts of the country where young and youthful persons are emigrating from the farm to the city. When one considers that arable agricultural land is becoming scarcer as the effects of climate change become more and more apparent, there will reach a time when rural Kenya is incapable of taking care of its aged and aging population.

While the census results point to a high population rate, the Government has been unable to keep pace with population growth. It is hope that Kenya Vision 2030 will raise the overall standard of living to that of a middle-industrialized nation capable of sustaining an economy with a growing populations, with pockets of retirees in rural parts. The growth of the youthful population should be taken as an opportunity. If the government implements an effective economic plan, it can plan for the inevitable aging of the population, ensuring that the pension system is able to sustain the aged and aging. Taking the experiences of the developed world, Kenya should be able to predictably plan its economy in such a way that white-collar job-creation slowly replaces basic production and swells up the pensions' coffers for that coming rainy day.

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