Nepal's demographic window is closing

The working-age group in Nepal makes up two-thirds of the total population, the highest it has ever been. However, most young people are abroad, reducing the country’s productivity and slowing its growth.

While about 20% of the population is between 15-24 years old, there are now nearly 3 million Nepalis above age 60, 10% of the population. 

The average life expectancy of Nepalis has risen to 71.3 years, the total fertility rate is 2.1, near replacement level. However, there are gender and geographical discrepancies. 

“Advances in healthcare and increased literacy means our infant mortality rate has dropped, this is a consolidated indicator for any country’s socio-economic status,” explains demographer Yogendra B Gurung. “As child survival increases, the fertility rate automatically goes down, which is why we have the new age structure.”

These are global trends, but countries like Nepal have a wide youth bulge giving the country a demographic dividend, a window of opportunity to achieve high economic growth before the young population also starts ageing and the ratio of dependent population also rises.

Won Young Hong, Country Director of the United Nations Population Fund (UNFPA), says Nepal must learn from the mistakes of many East Asian countries including her native South Korea.

“Policies that only focus on the reproductive function of women is an antiquated view. It is not only about giving birth anymore but how we are to respond and be prepared for the future, and this needs more socioeconomic discussions to take place,” says Hong.

Nepal has a narrow window to make full use of the large number of working-age people below 30. Experts say we have 30 years before we are faced with another demographic transition and become an ageing society. As today’s young grow older, one in five Nepalis will be elderly by 2061.

 But Gurung, who also heads the Central Department of Population Studies at Tribhuvan University, thinks Nepal may have more time than previously thought to prepare for the time when its dependent elderly population crosses 60%.

“Regardless of how many years we’ve left, it won't make any difference if our politics and the bureaucracy continue the way they do, we need a radical shift to make the most of our youth bulge by training and educating them, prime businesses to use their skills and not hinder them with red tape, invest in health and infrastructure,” cautions Gurung.

A major roadblock to mobilising the youth for Nepal’s economic growth is that most young people are away. There are at least 2 million Nepalis in West Asia and an estimated 3 million in India. Just last year, nearly 900,000 Nepalis left the country. 

While the money they send back is the main factor in the sharp fall in the poverty rate in the past 30 years, remittances account for 24% of Nepal’s GDP, higher than most other migrant labour-dependent economies. Most remittance money is spent on household expenses, and not invested in creating jobs.

Nepal’s labour migration pattern is also changing: while the first generation went to the Gulf and Malaysia and returned, their children seek to study in Australia, Canada, the US, or Europe, and migrate permanently. This will eventually reduce remittance, and seriously impact the economy.

Nepal’s economy is also going through a dramatic transformation with agriculture now contributing less than 25% to the economy, down from 81% three decades ago. But while hospitality, trade, finance and the IT  sectors have expanded, the quality of education has not kept pace with the needs. The literacy rate may now be 76%, but the figure for women is much lower. Only 4.6% of Nepalis are graduates, and the postgraduate rate is 2.2% — figures considered too low for Nepal’s new needs.

Increased quality of education also has obvious links to the health of women, female literacy is inversely proportional to the number of children they birth. Although female literacy rate has risen, child marriage is still prevalent, leading to teenage pregnancies. One of the targets Nepal will likely miss in the UN’s Sustainable Development Goals (SDG) by 2030 is promoting gender equality and empowering women.

Nepal is second only to Bangladesh in South Asia in the rate of child marriage. One in every three women marry while they are children while half of all women marry before they are 20. Surveys show that 13% of Nepali teenagers aged 15-19 years are already childbearing, and 9.6% are mothers. 

“Teenage pregnancy is extending poverty from one generation to another, it is an absolute poverty generation method,” UNFPA’s Hong told us. “If one-third of girls are marrying young, it means one-third of the population will remain in poverty.” 

Entrenched gender discrimination is seen most starkly in Nepal’s male-female ratio at birth, which is 112:100 and similar to China and more than India and Bangladesh. The normal range is 102 to 107 males per 100 females, and points to high prevalence of sex-selective abortion.

Despite this, Nepal is on track to meet its SDG target for Maternal Mortality Rate because of better access to institutional delivery, but even then the progress has plateaued off mainly because of the high child marriage rate. Further improvements need better quality of care at hospitals and health centres. Families should also seek institutional delivery on time, and this means women having greater autonomy over their bodies.

There is urgency in advancing women’s sexual and reproductive agency as a key strategy to address the population dynamic effectively as well as empowering them through education, healthcare and economic opportunities. This will also be instrumental to achieving Nepal’s middle-income developing country status by 2026.

The Ministry of Health and Population is currently drafting a new population policy, but experts say population should not be seen merely as a health issue but as a cross-cutting socioeconomic and political challenge. World Population Day is on 11 July, but it is limited to formal one-day ceremonies with more speeches pledging action.

Says Yogendra B Gurung: “Our government hasn’t yet understood its demography nor they wish to, it is a non-issue for politicians. How can we make plans and policies with such crucial information missing?”