Population, human capital and development in the Maldives

Abstract

The relationship between population and development has drawn the attention of economists and demographers for a long time. While academic interest has focused on population and development problems of small island countries, much of it is centred on the Pacific countries and the island states of the Caribbean, but it may be argued that these problems are common to all small island countries.

Past demographic trends in the Maldives have created a young population structure. The negative impacts of these rapid demographic changes on the national economy have been significantly minimised by rapid economic growth in the past three decades. However, it may be argued that the presence of a large and growing expatriate labour force may hinder the socio-economic development of households in the rural areas by impeding the flow of incomes from the modern sectors to the households in the islands. Development of indigenous human capital is thus crucial in ensuring equitable development, especially in a small, resource-scarce nation like the Maldives.

The links between population growth, human capital and development are determined by actions taken at the micro (family) level. Understanding which of these micro-level factors encourage or hinder the development of human capital and labour supply - particularly for women and people living in the far-flung atolls - is therefore crucial.

The present thesis explores the following broad questions; what are the trends and differentials in population, human capital, and development at the macro-level in the Maldives? What are the interrelationships between population, human capital and development at the household level? How do changes in the modern economic sectors translate to basic development across all social, economic and human capital sectors? How do the micro-macro and macro-micro links between population, human capital, and development described above interact in the present context?

Analysis is conducted at two levels. Aggregated census data from different sources, published and computerised, for the years 1977, 1985 and 1995, and published data from other documents are used to study macro-level trends and differentials. At the micro-level, random samples for urban and rural populations, drawn from the computerised individual-level data for the 1995 census are used to explore the interlinkages between fertility, human capital and development. Statistical analysis is performed using logistic and multinomial logistic regression techniques. Findings from the multivariate analyses are supported by qualitative data collected by the author in three different inhabited islands of the Maldives during December 1998 to February 1999. Qualitative data also provide some insights to the macro-micro interlinkages between the key concepts studied in this thesis.

Macro-level analysis shows that overall levels of fertility have declined in the Maldives during the period 1985 to 1995. Through its influence on increasing contraceptive use and delayed marriage, growth of education is found to be the most important factor of this decline. An important aspect of human capital, nutrition, is found to have lagged behind the general improvements in overall health. This is due to the dietary habits rather than lack of affordability. Past demographic trends and future projections suggest that the momentum effect of the present age structure is expected to continue. In addition to age-structural effects of population growth, the study shows that internal migration and the resulting spatial imbalances in population distribution have also affected social and economic infrastructures. However, internal migration and urbanisation have also been crucial for the creation of a scale economy in the urban area that has boosted macro-economic growth during the past three decades.

At the micro-level, despite the effects of an increasing expatriate labour force and a largely segregated tourism industry, the present study shows that the families in the rural households have benefited greatly from economic growth. Rural to urban circular migration of males is found to be the route of the flow of income from the largely urban centred economic growth to the rural households. With the exception of the southernmost islands, geographical factors are found to be important in the distribution of economic benefits to the population.

The study also shows that, perhaps due to socio-cultural factors, women in the Maldives seem to be increasingly marginalised from the workforce. Increasing household income appears to have a depressing effect on the participation of women in economic activities.

To the knowledge of the author, no other research has been undertaken to study the interlinkages between population, human capital and development in such detail in the Maldivian context. The thesis therefore provides valuable insights into the relationships between these variables in a small island setting, and thus contributes to expanding the knowledge base on the relationships between population, human capital and development. The findings from this study may also provide important policy directions for other small islands populations.