Will depopulation be good or bad for the world?

Ruchir Sharma, Head of Emerging Markets Equity at Morgan Stanley, writes that the next population bomb will be one of depopulation, and not one of ever rising number of people resulting in famine, as predicted by Thomas Malthus. The working-age population was growing at 2% in the post-war years up to 2005 but has fallen to 1% this year. This will cut long term global GDP growth rate from 3.5% to 2.5% and that of emerging economies from 4% to 3%. He admits that rapid population growth can lead to economic growth only if politicians create the right conditions. What about India? Our population is growing at less than 1.5% per year, which seems low, but the fertility rate per woman is 2.5, which is higher than the replacement level of 2.1 per woman. Everyday 68,922 people are turning 25 years of age, that is 2.1 million per month. By 2025, 690 million Indians will be below the age of 25 years, which will be more than the combined populations of the USA, Germany, France, Britain, Canada and Australia. But so many young people will demand jobs, without which there is no self respect. The Arab Spring was a spontaneous outburst of young people who saw no future to look forward to. In Egypt protesters were demanding jobs and the opportunity to get married. Young men in Tunisia, where the revolution started, are joining ISIS in great numbers because the future looks bleak without any hope of finding jobs. Tunisia has a population of just 11 million, less than that of Delhi. Nobel Prize winner economist, Joseph Stiglitz writes of the difficulties in finding jobs in the US and Europe and the impossibility of owning a home for most young people, burdened with education loans from banks. Politicians stress on the importance of education, but spending money on an expensive education makes sense if there are enough high paying jobs. Not everyone has the ability to become a rocket scientist or a chartered accountant. Technology is seen as the savior. Optimists predict that energy from renewable sources will become almost free. With free energy we can get any amount of water by desalination of sea water. Vertical farms, run by robots, will produce an abundance of food without the need for pesticides, which will make it cheap. But what will people do if most of physical work is taken over by robots? The UN predicts that 1.8 billion people could face a scarcity of water by 2025 as forests are cut down to provide land for farming. Poor countries with high birth rate are most at risk and they may not be able to afford capital intensive technologies. India already has 500 million people drinking arsenic in water. Japan is tackling its falling population by increasing the number of women at work and re-employing retired people. The Middle East, with high birth rate, is perhaps an example of Malthusian catastrophe. Perhaps, the only answer is technology and tax incentives for old people to work.