Tuesday, 12 April 2011

How to combat the empty cradle

Bernardo M Villegas
Manila Bulletin
http://www.mb.com.ph/articles/313581/how-combat-empty-cradle

MANILA, Philippines -- It is well known that consumer-oriented multinational companies like Coca-Cola, Nestlé and McDonalds are enjoying their highest sales growth in the emerging markets like China, India, Brazil, Indonesia, the Philippines and Vietnam. These firms, however, cannot be complacent that this bonanza will continue if nothing is done to counter the creeping contraceptive mentality with which the developed countries are infecting the developing nations, thanks to aggressive campaigns of the likes of U.S. Secretary Hilary Clinton to propagate “reproductive health” rights.

Demographic constraints in the rising economies that are expected to fuel future global growth are more serious and intractable than generally recognized. The multinational companies marketing consumer goods (both durable and non-durable) cannot be complacent about their presently booming markets in the developing countries. The marketing boom may be short-lived if nothing is done to arrest the fertility declines that are coming too prematurely in the emerging markets. As Nicholas Eberstadt comments: "Close to half of the world's population now lives in countries with fertility rates below the replacement level, which, as a rough rule of thumb, is 2.1 births per woman. In these states – absent steady compensatory immigration – current child-bearing patterns will lead to an eventual and indefinite depopulation. Almost all of the world's developed countries have sub-replacement fertility, with overall birthrates more than 20 percent below the level required for long-term population stability. But developed countries account for less than a fifth of the world's population, the great majority of the world's populations with sub-replacement fertility in fact reside in low-income societies."

Fortunately, when human beings are concerned, there are no irreversible trends. No matter how difficult the challenge may be, the threat of shrinking youth markets can be addressed with purposeful policy from all sectors of society: the State, the business sector, civil society and moral leaders. As Eberstadt concludes, "Left unattended the global demographic trends outlined above suggest serious and gradually mounting pressures on global economic development and may lead to downward revisions of worldwide material expectations. But feasible options do exist to alleviate some of these pressures – and to capitalize on new demographic opportunities that may arise. Addressing these new demographic challenges will require deliberate, concerted, and sustained efforts." Among his recommendations are augmenting human capital by expanding education, improving health conditions, and creating an economic environment in which greater returns can be generated by the world's human resources. These solutions can address the important problem of labor shortages brought about by the demographic winter. They, however, do not address the problem of shrinking markets, especially the very important youth markets that are crucial to the largest businesses of the world such as those in food and beverage, fashion goods, leisure and entertainment, home appliances, automobiles, etc. There must be some way of addressing the root problem of "the empty cradle," the very low fertility rate.

In this regard, some insights were provided by a leading official of the International Right to Life Federation, former Philippine Senator Francisco Tatad. In an international conference held in Ottawa, Ontario, Canada last October 28-29, 2010, he delivered a paper entitled "Building A Global Culture of Life: An Asian Perspective." In that paper, he confirmed the demographic reality also prevailing in the emerging markets of Asia: "By purely human standards, the family and life situation in our region (Asia) is not less wrenching than that obtaining on both sides of the Atlantic and everywhere else. The plague of contraception, sterilization, abortion, homosexuality, broken marriages, pedophilia, etc. – happily we do not yet have to deal with euthanasia – continues to spread, borne on the crest of the moral depravity that threatens to sweep away the civilization which, in Sheed's words, was built by looking at man while listening to God."

Senator Tatad has gone for the jugular. He exposes the roots of the low fertility rate, which is intimately interwoven with lifestyles. There is no escaping the fact that some of the solutions that will have to be applied in reversing the fertility decline have to involve behavioral changes affecting marriages, families, and sexual behavior. Policy makers concerned with the "fertility implosion" cannot avoid confronting these fundamentally moral issues. No amount of financial incentives to have more babies will succeed if women – especially the educated ones – have developed a contraceptive mentality, even to the extent of considering pregnancy a disease. There must be a deep-seated change that should happen in attitudes towards marriage, the family, and the begetting and education of children.

For their long-term survival, companies like Coca-Cola, McDonald's, Unilever, Procter and Gamble, Samsung, Toyota, United Laboratories, Penshoppe, Johnson and Johnson, Alaska Milk Corporation, Nestlé and others that are highly dependent on young consumers must take interest in research and communication efforts related to the long-term sustainability of the youth markets. Even more important than the physical environment, the demographic environment conducive to the continuing profitability of consumer products addressed to the youth must be a concern of the business sector. People in business cannot take for granted that "the empty cradle" is inevitable in the long run.

For comments, my email address is bvillegas@uap.edu.ph.

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