POPULATION is Pakistan’s third positive asset. As I have written several times before in this space, Pakistan’s demographic situation should not be seen as imposing a burden on the economy and society. Properly trained and educated, the country’s young can become an asset for their country as well as for those nations who are fast running out of young people.

A recent United Nations report has underscored the already known fact — that most industrial countries are either already faced with declining populations or will experience this in the not too distant future. The UN report says that the trend in fertility decline was even faster in most developed countries than previously thought. A declining population means an aging population and as the median age of the citizenry increases, the economy’s productivity declines. It also places a fiscal burden on the state as the aging and the aged have to be looked after. The only way out of this conundrum is to import people from the countries that have large populations.

The report by the United Nations Demographic Commission underscores the important fact that while populations of the developed world are rapidly aging those in the developing countries will remain young for several more decades. I have called this phenomenon “demographic asymmetry” — an asymmetry between the demographic profiles of rich and poor countries. This offers a unique opportunity for populous countries such as Pakistan that continue to see a fairly high rate of increase in their populations.

The opportunity is unique in the sense that at no time in human history did the rates of growth in different parts of the world diverge to such a degree. Developed countries are increasingly becoming demographically dependent on the developing world. Without the help of the developing world they will see a significant reduction in their economic growth rates and ultimately a decline in their standard of living. “Demography,” as the great management guru Peter Drucker once said, “is the future that has already happened”. What has happened in the industrial world is not very pleasant from their perspective. Japan best illustrates the problem these countries face.

Japan built its economy and its culture on the enterprise, dexterity and hard work of its people. That model worked for as long at there were people who could keep it going. However, now there are fewer people to keep the country moving forward. In 2005, the United States had five persons of working age (20 to 65 years) for every one retiree; in the case of Japan, by 2050, this ratio will be one-for-one.

This means that every active person in the economy will have to support one additional person who would making no contribution to the economy. The same fate awaits several European countries. The United States is in a somewhat different situation. This is for reasons of high levels of immigration and because the people who have arrived in the country in the last quarter of the 20th century have rates of fertility higher than the average.

However, even the Americans will begin to see a fairly sharp reduction in the worker-retiree ratio. The ratio is likely to fall to three to one when the last of the baby boom generation retires in 2030. This fall in the ratio may be faster if the current feeling about immigration translates into public policy that makes it difficult to add the migrants to the workforce.

Using United Nations data, Jeremy J. Siegel at the Wharton School of the University of Pennsylvania reached the following depressing conclusion for the developed world. “The United States and the rest of the developed world stand at a precipice. Over the next two decades, tens of millions of Americans, Europeans and Japanese — members of the prosperous baby boom generation that was born following the Second World War — will leave the labour force. Many are expecting a long and comfortable retirement by relying on government and private pension plans as well as tax supported services. But unless we can exploit the dramatic demographic and economic changes that are before us, our future will be much poorer. Instead of stepping into an easy retirement, many retirees will tumble into a future marked by bankrupt government social programmes and declining asset values that will quickly deplete their cherished nest eggs.”

There is, however, a growing sentiment against immigration in most developed countries, not just in the United States. Reaction towards Islamic extremism is not the only reason for it. This, of course, hurts Pakistan much more than other populous countries, given the perceived growth of Islamic extremism in the country.

But there are other reasons also; the debate on immigration in the United States in 2006 as the country prepared for important elections in November was fuelled by social and cultural concerns. The arrival of the Hispanics in America — some by legal and other by illegal means — was changing the country’s social landscape. California, the largest state of the country and also its largest economy, will see the white population become a minority.

I live in Montgomery County, Maryland state, on the other side of the American continent. This is adjacent to Washington and is one of the six richest counties in the country. According to a report recently issued by the US Census Bureau, Montgomery County will have a non-white majority within a decade.

But, in a world wired together by the internet, people don’t have to move to provide the products and the services required by the West’s aging population. There are, of course, areas of activity that need the physical presence of the workers. Lawns cannot be cut and hedges cannot be trimmed — not as yet — by robots programmed to receive instructions from command centres located abroad, in India or in Pakistan. If the homeowner is too busy with other chores to do these jobs himself, crews to carry out these activities must be hired from the market.

Increasingly, the Hispanics are doing these kinds of services. The aging population also requires old-age care. A trend in the United States is to buy long-term care insurance which allowed people when they become incapacitated in some way or other to procure nursing and home care help. The new trend is not to go into nursing homes or old age communities to spend the final years of life. It is to convert own homes into nursing homes. Again, this kind of help is being provided mostly by immigrants.

These are some of the examples of the types of workers who will need to be brought in as immigrants if the economies of developed countries are to stay vibrant. New and younger workers are needed if the labour-short countries are not to see a serious deterioration in the quality of social services provided. However, there are a growing number of areas that can be serviced abroad without the import of workers. Call centres, transcription services, design centres and medical care are some of the services that could be provided for the developed world by people located in developing countries. In the early 2000s, engineers in India began to provide an amazing number of services to customers and companies in developed countries.

The complexity and dexterity of what could be accomplished by the outsourced industry was increasing. It grew to such an extent that India started to experience shortages of skilled labour and began to look to some of its neighbours, including Pakistan, to find new workers.

Outsourcing as a source of employment for the skilled young was not just a potential that could be realised some time in the future in Pakistan. There is no doubt that that future has already arrived. Outsourcing is earning more foreign exchange for the country than suggested by government statistics. The state’s statistical apparatus has still to catch up with the developments that have already taken place. Pakistan’s relatively relaxed control on capital means that the earnings from the export of products that are produced in the country but that are not delivered by boat or by air but by internet often don’t get reported to the authorities. I believe that outsourcing is earning a multiple of what is being recorded by official statistics.

Not only is the IT industry becoming a sizable earner of foreign exchange and providing employment to the young coming out well trained from the hundreds of institutions set up by the public and private sectors in the last few years, it has also begun to penetrate the domestic economy. In this respect, Pakistan is positively different from India. Across the border, the IT industry is focused on the outside world — on outsourcing. That is where the initial pull came from. Bangalore is better integrated into the global economy than the domestic economic system. In Pakistan, the fledging IT industry has received the initial push from the domestic economy. This was the result of geo-politics. While India has become one of the major destinatspions for outsourcing, Pakistan is shunned for security reasons. It is considered too dangerous a place to do business in.

One palpable difference between the structure of the Indian and Pakistani economies is the importance of the modern sector. As discussed in the article last week, Pakistan has a more advanced banking sector than that of India. The same is true for the high-scale retail sector. I am intrigued when I see shops in New Delhi’s Khan market still using hand written receipts to record sales for their customers while it is becoming commonplace to come across bar-reading laser machines in shopping centres that cater to upper income customers.

Both the banking sector and retail trade are now well served by information and communication technology, creating a dynamism that will have far-reaching consequences for economic development, employment and the development of the social sectors. I don’t think I am being overtly optimistic when I predict that the growth of the IT sector in Pakistan will be the outcome of the rapid development of modern consumption than — at least at the beginning of the process — with demand from the outside.

It is only when the IT sector develops scale that foreigners will begin to take interest in it. In fact, this is what happened in the case of Israel where the IT sector developed because of the demand of defence; once it had acquired sophistication, foreigners began to arrive in the country to take advantage of the opportunities that were available for mergers and acquisitions. Recently, Warren Buffet the celebrated American financier made his largest acquisition outside the United States by buying an Israeli company.

As I have emphasised in this series of articles the contribution by what I have described as the “positives” to the Pakistani economy will become meaningful only when public policy begins to take full cognisance of them. In the case of the IT sector, the government must create the infrastructure needed for undertaking research in the area and linking it with the development of the domestic economy. Islamabad should seriously look at the possibility of setting up an institution in partnership with the private sector that provides infrastructure and incentives for research in information and communication that can directly feed into the development of the domestic economy.

FIRST, the best Belfast joke in years, courtesy of my old mate David McKittrick, who in 1972 worked on The Irish Times in Northern Ireland when I was the London Times man there and whose dad once worked in Harland and Wolff, the shipyard that built the Titanic. “You’ve got to hand it to Harland and Wolff,” David said. “If it wasn’t for them, the Titanic wouldn’t be where it is today.”

Maybe it was the skittles and beer of the Malmaison Hotel with its funereal decorations, but David’s joke somehow represented a new Belfast. Northern Irelanders have always made fun of themselves but it was usually a little self-conscious during the years of violence, even before. When the first major Titanic movie was made in 1957 — the one with Kenneth More playing Second Officer Lightoller — Harland and Wolff, a Protestant fortress, was still ashamed of its most famous ship and refused the film-makers any assistance, even declining to permit access to the construction plans of the vessel.

Today, Belfast advertises Titanic to tourists and Harland and Wolff proudly claims recognition of its extraordinary if doomed achievement. Belfast is Titanic Town and the original monument to the dead, freshly cleaned, stands outside City Hall and opposite the headquarters of the Ulster Bank (where my account must sometimes cause as much concern as the approaching iceberg in 1912).

Lecturing in Belfast recently, I was especially struck by the enormous knowledge that Northern Irelanders possess of the Middle East. Divided societies sometimes attract each other.

The Bloody Sunday committee in Derry, commemorating the 14 Catholics killed by British paratroopers in 1972, wanted to “twin” with the Iraqi city of Fallujah in 2003 after 14 Iraqi civilians were killed there by the US 82nd Airborne, the incident which provoked the insurgency that turned all of Iraq into a giant version of the original Bogside’s “no go” area.

It was back in 2000 that John Hume wrote an article for the Jerusalem Post in which he said that the Good Friday Agreement might be applied to the Palestinian-Israeli conflict. I disagreed. Other people’s peace treaties don’t travel well. The West Bank with its massive Jewish settlements is more like 17th-century Ireland after the Catholic dispossession, a point I made to an audience beside the river Lagan.

Audience questions. Could Israel be forced to abide by UN Security Council resolution 242? Answer: No. Is Lebanon in greater danger now than before the latest war? Answer: Yes. Is Blair really the lapdog of Bush on the Middle East? Answer: Yes. How can “faith” help to bring peace between the peoples of the Middle East and of the “seed of Abraham” (John Paul II’s initiative)? And, of course, what was the real effect of Pope Benedict’s quotation from a mediaeval Constantinople emperor? Answer: Benedict — not my favourite Pope — is far too intelligent not to realise the effect of this unpleasant and, in today’s terms, provocative statement about violence and the Prophet Mohammed (PBUH).

All this, I should add, came just a couple of days before Benedict decided to evacuate Limbo and send its occupants to more spacious accommodation in Heaven because — I suspect — the slow collapse of the Christian church in the West means that it must itself move into Limbo.

The “faith” question came up at a large meeting — mainly of young people — in the Clonard monastery in the Falls, a Redemptorist institution whose magnificent church has the acoustics of the Royal Albert Hall — it must have been built around the same time — and whose obvious religiosity should have intimidated a “secularist” like me. I had been sounding forth on the evils of war and the immorality of “armed humanitarian intervention” and the question came from Father Gerry Reynolds, himself a Belfast institution.

I was tempted to recall that my father, close to death, told me he did not fear “going”, but that I did “because you have no faith”; but I told the audience that we as westerners (except for Father Reynolds) had largely lost our faith, whereas the Muslim world had not.

I recalled a conversation between my Lebanese driver Abed, a Sunni Muslim, and my classical Arabic translator Imad, a Shia Muslim, as we were driving home to Beirut across the Lebanese mountains. Is there a life after death, I asked them. Abed said he believed in God but there was no afterlife. “The world just goes on without us,” he said. Imad did not know.

I said that here, amid the snows of Mount Sannine, watching the autumn leaves as we sat in our car, speaking in the language of angels, I could not believe that all this came about because two vast gas clouds bumped into each other billions of years ago. But that, I said, is “the end of Fisk belief”.

At this Father Reynolds — who will on the day, I am sure, go directly to Heaven — patted me on the arm. Hope for Fisk yet among the Redemptorists? The most frequent question in Belfast was: How can we force our leaders to stop their wars? I don’t know the answer, but I like the remark of that highly original Canadian writer Margaret Atwood in Moral Disorder, her latest novel. “You can’t lead,” she wrote, “if no one will follow.” Is that the way to deal with Lord of Kut al-Amara and his chums?

Indeed, if only Jack Straw had said a little earlier that he would like Muslim women to remove their veils in his parliamentary “surgery”, I could have put the knife of faith into him in the monastery. Heaven knows what he will next demand in his “surgery”. The removal of the headpiece of all Catholic nuns? Or the wigs of Jewish Orthodox women? I can’t escape the thought, though, that if it wasn’t for Jack Straw, Islamophobia wouldn’t be where it is today.— (c) The Independent

“WE are back in the centre ground of British politics,” declared the British Conservative leader David Cameron at his party’s conference last week. “A stable economy. Fighting crime. Backing the National Health Service and our state schools. Child care and flexible working. Improving our environment and quality of life. Those are people’s priorities; those are our priorities today.”

Not tax cuts. Not capital punishment. Not privatisation. And not withdrawal from the European Union. “The old policies,” Cameron declared, “are not coming back.” Instead, he pointedly used phrases such as “social responsibility,” “collective will,” “social solidarity,’” “binding targets for carbon reduction” (he even name-checked Al Gore) and “civil [including gay] partnerships.”

Unusually for a leader of the opposition, Cameron also expressed his readiness to support the government on measures he believes in.

So is David Cameron giving the Tories a makeover like the one Tony Blair gave the Labour Party 12 years ago? No. Cameron is doing much more than merely rebranding his party. He is reviving a long-dormant British political tradition he specifically cited in his speech: liberal conservatism.

What’s more, this same centrist philosophy is in the ascendant all over the developed world. But hang on, isn’t liberal Tory an oxymoron? Isn’t Cameron really a wolf in sheep’s clothing who secretly lusts after a flat tax and a two-tier society?

Far from being a contradiction in terms, liberal Toryism can be traced to one of the founders of modern conservatism, Robert Peel. Peel’s liberalism manifested itself in his acceptance of Catholic emancipation, electoral reform and free trade, as well as his rationalisation of the criminal law and tax system. But his reforms were always conservative in spirit. In the Tamworth Manifesto of 1834, the birth certificate of liberal conservatism, Peel addressed “that great and intelligent class of society ... which is far less interested in the contentions of party than in the maintenance of order and the cause of good government.”

Today, Peel’s avowed preference for pragmatism over partisanship resonates on both sides of the Atlantic. In New York and Sacramento, Mayor Michael Bloomberg and Gov. Arnold Schwarzenegger float untainted above the ghastly morass created by the Republican right, who stand exposed as incompetent over Iraq and hypocritical over sex. On the Continent, too, liberal conservatives are winning votes; witness last month’s Swedish election, which saw Fredrik Reinfeldt’s Moderate Party triumph over the once-mighty Social Democrats, who have governed the country for 65 of the last 74 years.

In each case, political success has come by seizing and holding the political centre ground. Schwarzenegger was in the political doldrums a year ago, having branded his opponents in the Legislature “girlie men,” only to lose a batch of ballot initiatives. Since then, “the Governator” has got back in touch with his feminine side, agreeing to cap emissions of greenhouse gases, to increase the state’s minimum wage and to fund stem cell research. His new best friend, Bloomberg, is another liberal conservative. So detached has the New York City mayor become from the Republican Party that his friends talk openly about his running for president in 2008 as an independent.

Socialist parties can play the same game. Just consider the old business school puzzle about the seaside, which goes like this: You are selling ice cream. You arrive at a crowded beach to find that a rival has set up an ice cream stand right in the middle of the beach. Where do you position yours? The correct answer is: right beside the guy in the middle. In the mid-1990s, successive Labour leaders realized that they had to bring their party back into the centre ground to stand any chance of winning an election. Conveniently for them, a large part of the Conservative Party had either decamped to the far right of the beach or swum off into the deep blue sea.

But the essence of New Labour was its cynicism, its reliance on spin to win. By contrast, Cameron is representative of a genuine and profound change within the Conservative Party. With a few exceptions, our generation — born in the 1960s and attaining political consciousness in the 1980s — has always combined liberal and conservative views. To put it simply: We are liberal on the whole gamut of social issues because some of our best friends are gay, but we do want conservative economic policies because we know free markets work.

Significantly, Cameron saved his definition of liberal conservatism for his discussion of foreign policy. He called himself a liberal “because I believe in spreading freedom and democracy and supporting humanitarian intervention,” but a conservative “because I also recognize the complexities of human nature and will always be sceptical of grand schemes to remake the world.”

That was the only part of his speech I might have drafted differently, because that definition of liberalism is dangerously close to the neoconservatism that has got Blair into such deep trouble. As Cameron rightly said, Britain is not the “young country” of Blair’s imaginings. It is not “Cool Britannia.” It is “an old country, with a proud past.”

The same could also be said of liberal conservatism. It would surely have done no harm to acknowledge its inventor, Robert Peel. —Dawn/Los Angeles Times Service