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Develpment implications of Changing age Structure in World Pupulation Focus, As commission on pupulation and development opens Headquarters Session


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The United Nations Commission on Population and Development today opened its fortieth session aiming to widen the scope of the socio-economic aspects of the debate beyond population size and growth, to encompass a critical but largely ignored demographic variable: population age structures -- or the way populations are distributed across different age groups.

Jose Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs opened the Commission’s week-long session noting humanity’s great successes in reducing mortality risks among the young, in increasing longevity, prolonging health and, especially, in achieving major reductions in the number of children that women bore, were at the root of major ongoing changes in the age distribution, changes that had substantial implications for development.

When fertility fell from high to low levels, the population entered a period during which the number of persons in the prime working ages increased relative to that of children and older persons, he said. During that “window of opportunity”, the number of potential workers rose and, provided that decent jobs were available for more of them, the age distribution, that characterized that stage of the demographic transition could have beneficial effects on development.

Yet, the benefits associated with the demographic “window of opportunity” were not automatic. The right policies were necessary to improve human and physical capital, increase employment and promote savings. A key strategy for reaping the potential benefits was to increase children’s educational attainment. He said that, as people lived longer and generally healthier lives, Governments needed to consider lengthening productive lives and, as many countries were doing, increasing the retirement age. To prevent poverty from increasing among the elderly, transfer programmes focusing on the older segment of the population, particularly on older women living on their own, would be increasingly necessary.

In a keynote address on the economic impact of age structures, Ronald Lee, Professor of Economics and Demography at the University of California at Berkeley, and Director of Berkeley’s Centre for the Demography and Economics of Ageing, stressed that because individual economic behaviour varied at different stages of life, changes in age structure could significantly affect national economic performance. A “demographic dividend” occurred when falling birth rates changed the age distribution so that fewer investments were needed to meet the needs of the youngest age groups and resources were released for investment in socio-economic development.

He said that population ageing raised the number of elderly dependents just as the number of child dependents had fallen, putting renewed pressure on consumption and slowing the growth of per capita income. It might also lead, however, to increased accumulation of wealth per capita, which generated non-labour income and raised labour productivity. That was the second demographic dividend, he said. He added, however, that if an increasing share of the elderly population led to a decline in their relative consumption, then the second dividend would not occur.

He said countries early in the ageing process had the option to encourage asset accumulation rather than transfers for old age support, and to harness the power of population ageing to increase wealth. After ageing had already occurred, massive implicit debt in transfer programmes made it very difficult to change. Population ageing was not a cause for alarm, but it would require adjustments in many institutions and programmes, which should be addressed early while options were still open.

Hania Zlotnik, Director of the Population Division, said that the implications of “demographic transitions” were varied and profound. They were varied because the process of population ageing affected individuals, who could expect to live longer; families, which became smaller; intergenerational relations, in terms of equity and solidarity; and the balance of production and consumption. In all cases, the transformation of the age structure would lead to profound social and economic change stemming from the ways the lives and expectations of individuals and families were being transformed. “We live in the best of times and the worst of times”, she said, noting that never before had so many people enjoyed such long and healthy lives.

At the same time, however, many populations were not prepared to provide decent livelihoods to their older members. Whereas developed countries might be concerned about the viability of their pension systems, developing countries generally did not provide pension coverage for the majority of older persons. Poverty was particularly common among older persons, especially women living on their own, or as heads of households. Under the circumstances, the rapidly increasing number of older persons in developing countries was daunting. For that reason, initiatives to improve the prospects of the older persons of the future must be implemented now.

Calling on the international community to work together for a world fit for all ages, Thoraya Obaid, Executive Director of the United Nations Population Fund (UNFPA), said that there was much to be gained by planners and policymakers taking a hard look at population age structures and dynamics. As they calculated their spending, officials needed to know how many and what percentage of the populations were young, in their prime working years, and how many were older. Countries would need to respond to the new realities revealed by changing structures with policies and programmes to meet the needs of all groups in society without compromising the rights of individuals to decide the size and timing of their families, she added.

Turning to another issue on the Commission’s agenda -- financing the goals and commitments set at the 1994 Cairo International Conference on Population and Development (ICPD) -- she said the good news was that the flow of resources for population assistance was on the rise. But, she cautioned that even if the estimates and projections held and the financial targets were surpassed, the resources mobilized would not be sufficient to meet the current needs, which had grown dramatically since the targets were agreed upon at Cairo 23 years ago.

For one thing, no one had foreseen the escalation of the AIDS pandemic, from 14 million people living with the virus in 1994 to 40 million today. Further, general health care costs had also risen substantially, while the value of the dollar had decreased sharply. As a result, the ICPD financial target of $18.5 billion in 2005 would not be sufficient to meet current developing country needs in the areas of family planning, sexual and reproductive health, sexually transmitted infections and HIV/AIDS, as well as basic research and policy analysis. She called on all countries to increase investments for all areas of the ICPD population package, including support for reproductive health security.

Earlier in the meeting, the reports before the committee were introduced, respectively, by Thomas Buettner, Assistant Director of the Population Division, Rogelio Fernandez-Castilla, Technical Support Division of the United Nations Population Fund (UNFPA), and Ann Pawliczko, Population and Development Branch, Technical Support Division of the UNFPA.

The Commission began its work today with the election by acclamation of its new Chairman, Muhammad Ali Sorcar ( Bangladesh), to fill the unexpired portion of the term of the previous Chair, Iftekhar Ahmen Chowdhury, who resigned after recently being appointed Bangladesh’s Minster for Foreign Affairs.

Based on a recommendation at the conclusion of earlier consultations in the Bureau, the Commission also elected Andriy Nikitov of Ukraine to serve as Vice-Chairman-cum-Rapporteur. The Commission also approved the Chair’s designation of Thomas Gass of Switzerland to head the informal consultations on draft proposals.

In other business, the Chairman reported on the Bureau’s work during the inter-sessional period, and the Commission adopted its provisional agenda (document E/CN.9/2007), and its organization of work (document E/CN.9/2001/1).

The Vice-Minister of the National Population and Family Planning Commission of China Participated in the general discussion on follow-up recommendations of the International Conference on Population and Development, as did the representatives of Pakistan (on behalf of the Group of 77 developing countries and China), Russian Federation, United States and Switzerland.

A representative of the World Health Organization (WHO) also addressed the Commission, as did representatives of the United Nations Economic Commission for Africa (ECA), the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the United Nations Economic and Social Commission for Western Asia (ESCWA), and the United Nations Economic Commission for Europe (ECE).

The Commission will reconvene at 10 a.m. Tuesday, 10 April to begin its general discussion on national experiences in population matters.

Background

The Commission on Population and Development met this morning to open its fortieth session, which will focus on the theme “The changing age structure of populations and their implications for development”. For background, see Press Release POP/953 issued on 5 April. (http://www.un.org/News/Press/docs/2007/pop953.doc.htm)

Statements

In opening remarks, MUHAMMAD ALI SORCAR ( Bangladesh), the Commission’s Chairman, noted that populations consisted of children, young persons, adults and older persons. At each stage of life, people faced different needs and could make different contributions to society. This year’s theme was, therefore, crucial for all. 2007 marked the fifth anniversary of the Madrid Plan of Action on Ageing, adopted by the 2002 Second World Assembly on Ageing. In 1982, population ageing had been seen mostly as a concern of developed countries. The second assembly, however, marked a sea change, in that population ageing was universal and would pose challenges in the twenty-first century.

JOSE ANTONIO OCAMPO, Under-Secretary-General for Economic and Social Affairs, said the breadth and scope of the issues covered by the Commission were vivid proof that population was central to all development initiatives. Indeed, people were at the centre of development. Today’s development challenges could not be understood without having a sense of the long-term population trends that were shaping societies now and in the future. The Commission had made major contributions to the United Nations development agenda and had helped to ensure that people remain the focus of development. In 2005, while concentrating on the contribution of the International Conference on Population and Development (ICPD) Programme of Action towards the achievement of the internally agreed development goals, the Commission had passed a key resolution underscoring the importance of integrating universal access to reproductive health into strategies to attain those goals. Last year, the Commission had undertaken a thorough and comprehensive consideration of international migration issues. As the General Assembly continued to consider how best to follow-up the high-level dialogue, the Commission’s work would remain relevant in ensuring that the best evidence was brought to bear in developing a comprehensive and holistic approach to international migration and development.

This year, the Commission would consider yet another crucial theme for development, namely the implications of changing age distributions of populations, he said. Humanity’s great successes in reducing mortality risks among the young, in increasing longevity, prolonging health and, especially, in achieving major reductions in the number of children that women bore, were at the root of major ongoing changes in the age distribution, changes that had substantial implications for development. When fertility fell from high to low levels, the population entered a period over which the number of persons in the prime working ages increased relative to that of children and older persons. During that period, often called the “window of opportunity”, the number of potential workers rose and, provided that decent jobs were available for more of them, the age distribution that characterized that stage of the demographic transition could have beneficial effects on development. Today, lower per capita income characterized those countries where dependency levels remained high, because the number of children per women was still large.

Yet, the benefits associated with the demographic “window of opportunity” were not automatic, he said. The right policies were necessary to improve human and physical capital, increase employment and promote savings. One of the key strategies for reaping the potential benefits was to increase children’s educational attainment. The good news in that regard was that, in both developed and developing countries, the levels of educational attainment of younger generations had been improving. In many developing countries, however, the advances made had been slow and were not sufficient to ensure that enough trained workers were available to propel economic development. Unemployment levels remained high among the young, especially in poorer countries. In contrast, youth unemployment tended to be lower in countries where early reductions in fertility had contributed to slowing down the growth of the population under age 25.

To ensure that the window of opportunity gave rise to economic growth that might persist even after the window closed, it was essential to increase not only production, but also savings and the accumulation of assets, he added. Economists argued that, because people in ageing populations expected to live longer than their forebears, they were likely to save more and accumulate more over their lifetimes than earlier generations. Because people did not always behave as economists expected them to, if Governments wished to achieve the results that the models predicted, they needed to foster institutions that promoted and facilitated savings for retirement and the accumulation of other assets. In designing or reforming pension systems, the establishment of a “funded pillar” that promoted the accumulation of wealth needed to be seriously considered.

Today, the populations of developed countries were already older than any population had ever been over the course of human history, he said. They were, therefore, blazing a trail that other populations might follow. As people lived longer and generally healthier lives, Governments needed to consider lengthening productive lives and, as many countries were doing, increasing the retirement age. In addition, as families became smaller and less likely to provide the care that elderly persons might need, new practices, services and social arrangements needed to be devised to ensure that the growing demand for personal care among the elderly was met. To prevent poverty from increasing among the elderly, transfer programmes focusing on the older segment of the population, particularly on older women living on their own, would be increasingly necessary.

As the Commission embarked on the consideration of such issues, it was important to underscore again that ageing populations were the result of critical changes in population trends that were themselves necessary to ensure the sustainability of human life on the planet. Reductions in the size of future generations was a major achievement that could be converted into even greater gains by ensuring that the right institutional arrangements and policy initiatives were developed to make the most of the opportunities that population ageing brought.

Noting that it was the last time that he would address the Commission in his current capacity, he thanked members for their support. He paid special tribute to Thoraya Obaid, the Executive Director of the United Nations Population Fund, from whom he had learned much during his tenure. Paying tribute also to Hania Zlotnik, he said the Population Division was one of the Department’s jewels and he had learned much from its work.

THORAYA AHMED OBAID, Executive Director of the United Nations Population Fund (UNFPA), said that it was important to move forward with the collective wisdom that population and development was about people of all ages and about supporting them throughout their life cycles to improve their lives, reach their full potential and realize their human rights. It was important to hold firm to the commitment that it was only by addressing the issues of population, reproductive health and gender equality that the international community would be able to achieve the international development goals, specifically, the Millennium Development Goals.

Collective efforts to achieve the goals and recommendations of the ICPD Programme of Action would contribute to poverty reduction and the achievement of sustainable development for all. She added that the achievement of greater socio-economic development in the poorest countries would depend, to a large extent, on the success in addressing population and development issues. Turning to the work of the Commission, she then said that a shift in ageing structures was occurring around the world, and there was not one country or region that was exempt from the substantial implications of that trend. Indeed, the world population was moving in “many different directions”, bringing as many benefits as challenges.

She said that, today, the world was simultaneously home to the largest populations of young people and the largest population of people over 60. Further, the elderly were the world’s fastest growing population group; and just as there was an economic divide between the developed and developing regions, there was also a demographic divide. In the more developed regions, population growth was stagnant overall, while it was at the same time ageing rapidly. In fact, the population of 60 and over was expected to nearly double by mid-century. She said that in Europe, for example, just 16 per cent of the population was under the age of 15. Those statistics were starkly contrasted in the least developed countries, where overall population growth was rapid with slower ageing trends. In Africa, 41 per cent of the population was under 15, she added.

With those trends in mind, she said that much greater attention needed to be paid to understanding demographic and age structures and incorporating that analysis into national policy frameworks, including sector-wide approaches and poverty reduction strategies and in the allocation of national budgets. Inadequate attention to demographic changes might lead to inefficient social investments. She said that the UNFPA, together with other United Nations agencies was committed to bringing the analysis of age structure transitions into national development discussions within the world body’s country teams and with national government partners and other development stakeholders.

She said that, recognizing that there was a window of opportunity that opened during the demographic transition -- when there was a large number of working people with relatively fewer dependents to support -- it was important that the right basic social and economic policies were in place. That allowed the demographic bonus to result in higher economic growth and development. So, there was much to be gained by planners and policymakers taking a hard look at population age structures and dynamics. As they calculated their spending, officials needed to know how many and what percentage of the populations were young, in their prime working years, and how many were older. Countries would need to respond to the new realities revealed by changing structures with appropriate policies and programmes to meet the needs of all groups in society without compromising the rights of individuals to decide for themselves the size and timing of their families.

Calling on the international community to work together for a world fit for all ages, she said that the challenge was to meet the needs of the young, the working age and the elderly, especially the education and health needs of young people, the employment needs of the work-age population, and the social, medical and financial support of the elderly. She went on to say that the large youth populations in the world’s poorest countries deserved urgent attention and priority, and with good reason. While the world was undergoing rapid changes, including an information and communication technology revolution, and increased urbanization and mobility, young people were simultaneously experiencing increased poverty, as well as the effects of ongoing gender discrimination, armed conflict and human rights abuses.

“The point I want to make is that if we are to stand any chance whatsoever of achieving the development goals and building a better world for all, we must reach out to the young people. And we must do so urgently and with open arms,” she said, urging the international community to embrace the world’s youth as partners in development, particularly those living in developing countries. She called on Governments to make greater investments in young people, especially adolescent girls, so they could pass safely into adulthood. Increased investments were also needed so that young people could protect themselves from HIV infection and unplanned pregnancies, early marriage, sexual abuse, violence and exploitation, she said.

Turning to the issue of financial flows to achieve ICPD goals, she said the good news was that the flow of resources for population assistance was on the rise. However, she cautioned that, even if the estimates and projections held and the financial targets were surpassed, the resources mobilized would not be sufficient to meet the current needs, which had grown dramatically since the targets were agreed upon at Cairo in 1994. At the same time, the population and world situation was also much changed. For one thing, no one had foreseen the escalation of the AIDS pandemic, from 14 million people living with the virus in 1994 to 40 million today. She added that overall health care costs had also risen substantially, while the value of the dollar had decreased sharply.

As a result, the ICPD financial target of $18.5 billion in 2005 would not be sufficient to meet current developing country needs in the areas of family planning, sexual and reproductive health, sexually transmitted infections and HIV/AIDS, as well as basic research and policy analysis. By example, she noted that there was a large funding gap in what was needed and what was currently being mobilized for family planning. In fact, since Cairo donor assistance for family planning, a percentage of all population assistance had decreased. She called on all countries to increase investments for all areas of the ICPD population package, including support for reproductive health security.

HANIA ZLOTNIK, Director of the Population Division, noted that never before had the world’s population increased by so much so fast. Between 1950 and 1987, the world’s population had doubled, from 2.5 billion to 5 billion persons. If human life on earth was to remain sustainable, earth’s population must never double in size again. Rapid population growth in the twentieth century was the result of major advances in human well-being. For the first time in history, humanity had effective tools to combat the contagious diseases that had meant early death for millions of people over millennia. Improved nutrition and sanitation, widespread vaccination, the use of antibiotics, campaigns to control the vectors of disease, had all contributed to reduce mortality markedly, particularly in developing countries. As more people survived, especially children, population growth had accelerated.

Those changes, however, set the stage for an even more remarkable transformation of the human population, she said. As more children survived to become adults, parents realized they could have fewer children and invest more on each. Family planning had become widespread, facilitated by the availability of modern methods. And fertility levels had dropped in population after population. Since 1960, the world’s fertility had been cut in half, falling from 5 children per women to about 2.5 children today. Currently, some 43 per cent of the world population lived in countries where fertility was below replacement level. Those trends shaped the age structures of populations in characteristic ways. The initial reductions in mortality, which were concentrated mostly among children, led to a younger population, whereas the subsequent fertility decline triggered a long-term process of population ageing, which was further accelerated by continued reductions of mortality that increased survivorship to old age.

Because the “demographic transition” began at different times in different countries, there was still today great diversity in the age structures of the world’s population, she said. If the transition process was imagined as a long marathon, Europe was in the lead, with a population that was already very advanced in the ageing process, so much so that it already had a higher number of older persons than children. Europe was closely followed by North America and slightly further behind by Oceania. Asia and Latin America and the Caribbean lagged further behind, finding themselves today at about the same stage that Europe had reached in 1950. And Africa trailed even further behind, being roughly at the same stage today as the one Asia or Latin America had reached around 1970.

In the future, Europe was expected to maintain the lead, followed at a leisurely pace by North America and Oceania, she said. Asia and Latin America and the Caribbean were expected to gain speed, so as to reach by 2050 a stage approximating that of Europe today. Africa was expected to follow at a distance, by reaching by 2050 a stage similar to that of Asia today. In 2050, older persons were expected to constitute 35 per cent of the population in Europe and just 10 per cent of that in Africa, while children under the age of 15 were expected to account for just 15 per cent of the population in Europe and 29 per cent of that in Africa.

The implications of those changes were varied and profound, she continued. They were varied, because the process of population ageing affected individuals, who could expect to live longer; families, which became smaller; intergenerational relations, in terms of equity and solidarity; and the balance of production and consumption. In all cases, the transformation of the age structure would lead to profound social and economic change stemming from the ways the lives and expectations of individuals and families were being transformed.

She noted that, at the population level, mortality reduction went hand in hand with improved health, a factor that not only improved lives, but also enhanced worker productivity. At the same time, fertility reductions resulted in smaller families and allowed parents to invest more on each child. Furthermore, during the period when the share of children in the population declined and that of adults of working age increased, the economy had the opportunity to raise output more rapidly than consumption and, hence, accumulate more capital to promote investment and improve living standards for all. The “first demographic dividend” had proved especially beneficial in countries that had invested in improving human capital through education.

She said low-income countries, lagging behind in the demographic transition, still had high child-dependency levels that reduced their ability to, at the same time, invest in productive activities and provide adequate health services and education to the young. Crucially, to make the most of the “first demographic dividend”, countries undergoing the demographic transition needed to ensure that there was sufficient employment for the growing labour force. Worryingly, unemployment levels remained high among the young in most developing countries. Challenges of a different nature were faced at the other end of the transition, when the working-age population ceased to grow and all growth was concentrated in the older population.

To meet those challenges, adaptation needed to occur in a variety of areas, she said. Economic analysis indicated that ageing populations had the potential of increasing their average wealth by promoting the accumulation of savings and assets among working-age persons in preparation for retirement or reduced productivity in old age. Taking steps to maximize that “second demographic dividend” was critical to ensure that population ageing was not only sustainable, but also beneficial for society. When small families became the norm, parents were less likely to count on their children’s economic support in old age and were better able to save because fewer resources were devoted to child-rearing. As younger generations had fewer members than those preceding them, public transfer systems had become hard pressed to provide support in old age to increasing number of older persons. Both individuals and institutions needed, therefore, to adapt by relying less on transfers and more on savings or assets to support consumption in old age. Policymakers had the responsibility of guiding that adaptation.

“We live in the best of times and the worst of times,” she said, noting that never before had so many people enjoyed such long and healthy lives. At the same time, however, many populations were not prepared to provide decent livelihoods to their older members. Whereas developed countries might be concerned about the viability of their pension systems, developing countries generally did not provide pension coverage for the majority of older persons. Poverty was particularly common among older persons, especially women living on their own, or as heads of households. Under the circumstances, the rapidly increasing number of older persons in developing countries was daunting. For that reason, initiatives to improve the prospects of the older persons of the future must be implemented now. The Commission had the possibility of commemorating the adoption of the Plan of Action by considering how Governments could make the process of population ageing work to the benefit of all.

Introduction of Reports

THOMAS BUETTNER, Assistant Director of the Population Division, introduced the Secretary-General’s report on world population monitoring, focusing on the changing age structures of populations and their implications for development (document E/CN.9/2007/3), saying that during the twentieth century, the world population had experienced an unprecedented transition from high mortality and high fertility to low levels of both. That transition had led to major changes in the age structures of populations that were expected to continue in the coming decades. Those changes had conditioned and would continue to affect the option that Governments had in addressing a number of pressing development issues. The report provided an overview of the state of population age structures today and prospects for the future, together with a comprehensive discussion of the major social and economic implications of the changes foreseen.

He said that, with population ageing and decreased fertility in different countries, the report noted that one of the major implications of the transition to older structures was that, in the middle of the transition –- over the period that may last from 40 to 60 years –- the ratio of adults of working age to young and old dependents increased, thus setting a favourable stage for economic growth. But, at the same time, the report noted that population ageing was causing some concern among Governments, particularly since many countries had underfunded public pension programmes. Further, if the conditions of older persons were to improve in the future, initiatives were needed to improve education levels among today’s children, increase employment levels among young and middle-aged persons and foster savings for elderly persons.

ROGELIO FERNANDEZ-CASTILLA, Technical Support Division of UNFPA, introducing the Secretary-General’s report on monitoring of population programmes, focusing on the changing age structures of population and their implication for development (document E/CN.9/2007/4), said that all countries were currently experiencing some changes to their demographic structures, but, since countries were at different stages of demographic transition and experienced different social and economic conditions, the change was more pronounced in some nations than in others. Countries would need to respond to the new realities –- high levels of fertility in the developing world and rapidly ageing population in developed nations –- with appropriate policies and programmes to meet the needs of all age groups.

He added that UNFPA was working to ensure that the needs of both young and old were met, both within the work of the wider Organization, and at the policy level. Among other things, he said that UNFPA facilitated policy dialogue to address the implications of ageing among all stakeholders, advocated the mainstreaming of ageing issues into national development frameworks and poverty reduction strategies, and supported initiatives to improve data, research and institutional capacity for formulating, implementing and monitoring ageing policies and programmes.

ANN PAWLICZKO, Population and Development Branch, Technical Support Division of UNFPA, introduced the report on the flow of financial resources for assisting in the implementation of the Programme of Action for the International Conference on Population and Development (ICPD) (document E/CN.9/2007/5), saying that her agency had been given the lead role in monitoring progress towards achieving ICPD goals in the area of resource mobilization. Working closely with the Netherlands Interdisciplinary Demographic Institute and the Joint United Nations Programme on HIV/AIDS (UNAIDS), the agency collected data and reports on levels of international assistance and domestic financial flows for population activities.

She said that the report analyzed such flows that were part of the “costed population package” of ICPD Programme of Action, which included funding for family planning services, basic reproductive health services, sexually transmitted disease activities, and basic research, data and population and development analysis. The Action Plan had estimated the cost of implementing the population and reproductive health package in developing countries and transition economies would be some $18.5 billion a year by 2005 and $20.5 billion by 2010. Approximately two-thirds that cost was expected to come from developing countries and one-third from the international donor community.

She said that, while there had been little to report in recent years and that it seemed that the perennial funding gap could never be bridged, today, she was pleased to say that UNFPA had seen increases in both donor assistance and domestic resource mobilization for population activities. Once all the data was in, such assistance might reach as high as $6.9 billion for 2005, and UNFPA estimated domestic resources to be $17.35 billion in 2005. All that was indeed good news, but the job was not done. Even if estimates were correct and the targets were met, there was still a long way to go to meet the current needs. The world was very different today and the population, health, and health care situations had been much changed since Cairo. Among other things, no one had foreseen skyrocketing health care costs or the devastating extent of the HIV/AIDS pandemic. There was much to be done to make sure that sufficient resources beyond the outdated targets were mobilized, so that people everywhere, especially the poor, had access to the services they needed, whether in the area of family planning, reproductive health or sexually transmitted diseases.

Statements

FARUKH AMIL ( Pakistan), on behalf of the “Group of 77” developing countries and China, said the world population was in the midst of an unprecedented transformation. While the growth of the younger populations had been a steady trend, the rapid increase in the number of older persons was a relatively new phenomena caused by the transition from a regime of high mortality and high fertility to gradual decline in fertility and low mortality. Consequently, all countries were experiencing some change in their age structures according to their respective stages of the demographic transition. The changing age structure of populations had significant social and economic implications at the individual, family, community and societal levels. It also had important implications for a country’s development and, to some extent, had repercussions for regional and global patterns of growth.

He said the demographic transition had obvious and multiple implications for developing countries, most of which were on the verge of a second stage of transition, with a larger proportion of the population entering the working age. They could thus reap the benefits from the “demographic window of opportunity”. Achieving the benefits from that window, however, depended on developing sound macroeconomic policies that promoted savings and productive investment, increased employment opportunities and ensured a stable socio-economic environment that was propitious for sustained economic growth and sustainable development. It was, therefore, imperative that countries be prepared to respond to the new realities of ageing societies with appropriate policies to meet the needs of all age groups. Assessing challenges and making serious efforts to prolong the demographic dividends linked with the second stage of demographic transition would require a holistic approach at the national level with the international community’s assistance.

In that regard, he emphasized the need to recognize the important nexus between development and the changing age structures of populations. Poverty and underdevelopment remained the major threat to the well-being of the elderly. The creation of sustained financial resources for the developing countries through increased official development assistance (ODA) and debt cancellation would remain crucial to enable them to pursue various targeted policy interventions to realize benefits from the demographic transition. He also stressed the need to pursue policies for sustained international migration and invest in health and education for young peoples, which was a key measure for reaping the potential benefits of favourable age structure, especially during the demographic window of opportunity. High levels of unemployment among young peoples in all major areas indicated that much remained to be done in that regard.

Concluding, he appealed to donors, United Nations organizations and other international organizations to enhance their financial and technical support to developing countries, including in the field of capacity-building. It was particularly important to reach the official development assistance (ODA) target of 0.7 per cent of gross national product. Without a firm commitment to population, reproductive health and gender issues, it was unlikely that the goals and targets of the Cairo Conference and Population and Development and the Millennium Summit would be met.

MIKHAIL SAVOSTIYANOV ( Russian Federation) said the reports before the Commission would provide a basis for discussing a broad range of demographic issues. It was important to ensure that the goals set at Cairo were linked at the national level to population and changes in demographic structures. Indeed, the Russian Federation believed that those current demographic trends deserved particular attention, particularly rapid ageing in some regions and continued high fertility in others. He called for a comprehensive and equitable approach that addressed the needs of all sectors of society. He said his delegation also agreed with the report’s assertion that countries needed to devote more attention to the role of savings and education.

His Government also called for more attention to the issue of migration, which could have a significant impact on populations around the world. Turning to the Madrid Assembly on Ageing, he said that it was important to translate the agreements made there into national, regional and international action. To that end, he welcomed the decision of the Government of Spain, along with the Economic Commission for Europe (ECE) to hold a review conference on the ageing targets. He said that, overall, it was important that all countries had the most up-to-date information on population and demographic trends, as well as realistic forecasts about future trends.

Ms. KENNELLY ( United States) said the coming demographic changes might have an enormous impact on economic growth, including the sustainability of families, health care financing, the ability of States and communities to provide resources for older citizens, and more generally, international relations. Each Government’s responses to national population challenges facing them could influence the challenges and responses in other countries. The impact of nations’ actions on each other was especially important, as developed and developing countries faced very different age structures now and in the future. Those differences would lead developed countries to focus more on ageing issues, while many developing countries were still very concerned with the challenges of young populations.

She noted that developing countries were grappling with providing decent work for their growing labour forces. Employment creation in developing countries required employment-intensive economic growth, combined with a coherent set of employment and human development policies. The Government’s role was to create and maintain conditions for economic growth so that the private sector could create new jobs. Job creation must go hand in hand with respect for fundamental principles and rights at work, namely: freedom of association and the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the abolition of child labour; and the elimination of discrimination in employment and occupation. The number of persons of prime working age would increase from 2.9 billion today to 4.1 billion in 2050. Virtually all of that increase would occur in less developed regions of the world. National policies that promoted economic growth and free enterprise could help ensure the employability of young people.

Turning to the Secretary-General’s report on monitoring population programmes, she said that the otherwise comprehensive report did not fully recognize the important contributions that the elderly had to offer, both to society in general and to their own support. Allowing persons over 60 to work as long as they wanted and were able helped them to stay healthier and happier, maintain independence and ward off poverty. Employment would also reduce the level of Government funds needed to support them, thereby allowing scarce resources to be redirected to other segments of the population in need of assistance. She also emphasized the community volunteer work that the elderly could perform, in addition to their active forms of civic engagement.

On the UNFPA report on the flow of financial resources for assisting in the Programme of Action’s implementation, she said the United States had contributed directly over $3 billion for population and health activities in both 2005 and 2006, making it the world’s largest bilateral donor of population and health assistance. In 2006, United States contributions included some $500 million for family planning, maternal health and reproductive health. Regarding paragraph 34 of the report and the suggestion of a new indicator for universal access to reproductive health, she emphasized that the Millennium Development Goals and targets could only be established through an intergovernmental process. The Secretariat and agencies crafted indicators, in consultation with concerned Member States, only after governments as a whole had agreed on goals and targets. Thus, an addition of a new Goal on “universal access to reproductive health” would need to be negotiated and mandated by means of a General Assembly resolution.

In seeking to add new elements to the Millennium Development Goals matrix, she said it was necessary to keep in mind the effort already underway to fulfil existing indicators. The majority of countries lacked the methodology, resources and expertise to gather data that were internally consistent and sufficient to meet even the most basic international standards. The international community must, therefore, prioritize and focus on indicators that could be measured by means of well-established sources and that were appropriate for meaningful monitoring on a global level. Indicators should be able to show clear trend lines and to marshal data that were useful for policymakers. Stressing the need to prepare for the challenges and opportunities that global ageing would present, she said delay would only make solutions more difficult and expensive.

JIANG FAN, Vice-Minister of the National Population and Family Planning Commission of China, said that, currently, many countries were experiencing unprecedented demographic transitions, highlighted by the rapid ageing phenomenon. His delegation called for greater efforts to meet the social, economic and medical challenges resulting from population ageing. That issue should also be mainstreamed into national strategies on development and poverty reduction, he said, adding that since the elderly were often the poorest of all social groups, poverty remained a constant threat and deserved greater attention.

He went on to call on the Commission, UNFPA and the Organization’s Population Division to make full use of, and to rationally integrate, their existing resources to play a greater role in promoting policy dialogues, experience, information exchange and project collaboration to promote positive responses to changing age structures and their implications for development. At the same time, he called on the international community to pursue and promote South-South cooperation to that end. Also, United Nations agencies and other international organizations should reinforce capacity-building in developing countries through, among other ways, helping them provide training for policymakers and programme managers to help them advance their knowledge of issues related to population ageing.

LALE SAY, World Health Organization (WHO), said the current diversity in the age structure of populations presented distinct needs and requirements for action in the area of health and implications for development. Developed countries that had completed their demographic transitions and had undergone “epidemiological transition” would have to deal with the health and health care needs of large proportions of older populations in the context of smaller working-age groups. Developing countries followed the trend, but at a different pace and under different circumstances. While a group of middle-income countries had the opportunity to benefit from the productive ability of relatively large groups of working-age populations, the least developed countries still showed high levels of fertility and delay in their demographic transitions.

The relatively large proportions of working-age groups in a range of developing countries represented a window of opportunity for enhancing development provided that they were healthy, skilled and employed, she said. In that respect, it was imperative to ensure that their fertility desires and needs were met, and vulnerability to sexually transmitted infections was minimized. While fertility had declined in those countries, unequal distribution of fertility remained, hence the need for greater attention to meeting the family planning needs of poorer populations within countries. In the least developed countries, high fertility persisted and would remain higher than in the rest of the world for the coming decades. Two hundred million women currently had unmet needs for family planning. If effective measures were not in place, the future increase in the proportions of working-age groups due to current high fertility might not create the same window of opportunity for development as it did in some middle-income countries.

SEM BAJWE, Economic Commission for Africa (ECA), said that, while Africa was the youngest continent in the world in terms of the age structure, the number of older people in Africa would change more dramatically than in any other region of the world. The challenges posed by increasing numbers of older persons would be more important in Africa than elsewhere in the world, because Africa was the continent with the highest levels of poverty and HIV/AIDS prevalence rates. The number of elderly in Africa would grow, from some 42 million in 2002 to some 205 million in 2050. That dramatic change was taking place in an environment where the family institution had continued to breakdown, as a result of increased migration, urbanization, social and political instability and HIV/AIDS. Intensified efforts were needed to deal with the issue of HIV/AIDS and its effects on different age segments of the population.

He said Africa was the youngest continent with some centres, such as Mali, Niger and Uganda, with a median age of about 16 years. Whereas the population of the working age group was expected to decline in the future in the more developed regions of the world, in Africa the corresponding proportion would rise from 53 per cent to 61 per cent by 2050, implying an economic opportunity for growth. That could only be realized, however, if adequate gainful employment was created for the working age population, especially for the youth. The creation of gainful employment remained one of Africa’s greatest challenges. Widespread youth unemployment could lead to political and social instability. The lack of decent employment for young women and men had forced many of them to risk their lives trying to get to the shores of Europe and the Middle East using dangerous means of transport.

KEIKO OSAKI, Chief, Population and Social Integration Section in the Emerging Social Issues Division of the Economic and Social Commission for Asia and the Pacific (ESCAP), said that, over the past two decades, the Commission had been a focal point on ageing and had been widely recognized as the leading voice for older persons. That was perhaps no coincidence, with the notable declines in fertility and mortality, the rapid process of population ageing had become an emerging reality that challenged a growing number of countries in the region. According to the latest estimates, the Asia-Pacific was home to 400 million elderly persons –- the largest number in the world. Moreover, the number was increasing at twice the rate of the total population. In the region as a whole, 10 per cent of the population was over 60 years old, she added.

She said that there had been several inspiring attempts to highlight ageing issues at the regional level, opening doors to possible new actions that could be taken. But perhaps no regional initiative had done more to raise awareness and open doors than the regional meeting on a Plan of Action on Ageing for Asia and the Pacific, held in Macao, China, in 1998. The Macao Plan of Action adopted at that meeting had explicitly revealed the link between population ageing and the fiscal demands of governments, especially relating to social security, health and social services. The 2002 Second World Assembly on Ageing had adopted the landmark Madrid International Plan of Action on Ageing, calling for a shift in strategic planning from needs-based approaches to rights-based approaches. Five years had passed since that conference and ESCAP was planning to convene a high-level regional review and appraisal from 9 to 11 October 2007 in Macao.

BATOOL SHAKOORI, of the Economic and Social Commission for Western Asia (ESCWA), noted that, despite the hidden momentum of population growth, the age structure of the Arab population was changing. The slow growth of the elderly population associated with a high growth of the working-age population would permit dependency ratios to decline, offering a number of countries in the Arab region a demographic window of opportunity, in which increased savings and investments would become possible. In that regard, the Population and Social Policy Team had been focusing on assisting ESCWA members in seizing that unique opportunity to escape income inequality and ensure faster economic growth. Equally important to ESCWA was the need to upgrade national skills in the area of demographic analysis.

Continuing to uphold its commitment to shed light on how the changes in the population age structure were vital to fostering or impeding social inclusion and basic human rights, ESCWA had published a report on the impact of the changing age structure of populations on international migration in the Arab region, she said. In the Arab region, where the onset of fertility decline was a relatively new trend, the process of population ageing was also in its early stage. In the wake of the region’s rapidly changing demographic situation, the need to meet the challenges with regard to the increase in the absolute number of older persons could not be underestimated. To prepare for the five-year review of the Madrid Plan of Action, ESCWA would be conducting a regional survey to prepare a situation analysis report on the subject, followed by a regional meeting to discuss the report’s outcomes.

ANDRES VIKAT, Chief, Population Activities Unit, Economic Commission for Europe (ECE), said that, shortly after the 2002 Madrid World Assembly on Ageing, the ECE Ministerial Conference on Ageing held in Berlin had adopted a relevant regional implementation strategy that included 10 concrete commitments. On international cooperation, the strategy called on the ECE Secretariat to assist member States in implementing and evaluating relevant achievements. In that work, the Secretariat was being assisted by an expert task force, as well as by the European Centre for Social Welfare Policy and Research, which developed indicators, collected data and maintained a website monitoring implementation of the Madrid Action Plan and the regional strategy.

To facilitate coordination and information exchange about implementing the regional strategy, he said that ECE had set up a network of focal points on ageing, which now covered a large majority of that Commission’s member States. The Government officials acting as focal points were expected to play key roles in the review and appraisal of Madrid and the regional strategy at national levels and to act as primary contact points for regional level activities. The secretariat had also developed guidelines for the foal points to organize existing, as well as newly collected, material on ageing-related policies and programmes into concise country reports. Those reports, due by 16 April, would be the main source of information for the regional summary report that would be prepared for the ECE Conference on Ageing, set to take place in León, Spain from 6 to 8 November 2007. The last day of the Conference would be held at the ministerial level, and a political declaration would likely be adopted, he added.

Keynote Address

RONALD LEE, Professor of Demography and Economics, University of California at Berkeley, presenting a keynote address on the topic: “The economic implications of changing age structure”, explained that, during the demographic transition, mortality began to fall decades before fertility declined. Initially, families found themselves with more surviving children to feed and educate. Once fertility began to decline, the process was reversed. Families and Governments had fewer children to provide for, and consumption pressures eased, leading to the first demographic dividend, namely a period of declining numbers of consumers per producer. At some point, the number of children per working age person stopped declining, and the first dividend -- in the sense of a boost to the rate of increase in per capita income -- ended. At that time, lower fertility also led to slower growth of the working age population, while the number of elderly grew rapidly due to falling mortality.

Population ageing raised the number of elderly dependents, just as the number of child dependents had fallen, putting renewed pressure on consumption and slowing the growth of per capita income, he said. It might also lead, however, to increased accumulation of wealth per capita, which generated non-labour income and raised labour productivity. That was the second demographic dividend. The first dividend occurred quite mechanically, regardless of institutional setting. The second dividend, however, depended on policies and institutions. If consumption in old age was provided through transfer programmes, the second dividend was weakened or absent. If old age consumption was funded through asset accumulation, the second dividend did occur.

That raised a number of questions, he added, including whether the consumption of an elderly person cost more or less than that of a child and how much did the ratio of workers to consumers rise in total, and per year. Looking at the case of classic demographic transition, he noted that Indian life expectancy began to rise at around 1900. Indian fertility began to fall in the 1960s from 6 to 2.1 births. Once fertility began to decline, the child dependency ratio fell. Serious population ageing began more than a century after the transition started. The old-age dependency ratio rose rapidly, by a factor of six. Adding together the child dependency ratio and the old age dependency ratio, the total dependency ratio initially rose, followed by a period of decline in the total dependency ratio.

Looking at United Nations projections for 2050, the least developed countries, including in sub-Saharan Africa, had very low old-age dependency due to a later start in the fertility transition and higher mortality. The United States was projected to be higher than India, but not by much. Europe had low fertility. Japan had the highest of all elderly per worker. To understand the economic implications of age structures, it was necessary to know how labour income and consumption varied with age. In Thailand, consumption was remarkably flat after the age of 20. In the United States, the age profile of earnings was not much different, with consumption rising throughout the lifecycle. Towards the end of life, there was a dramatic up tick, due to the costs of long term care.

The increase in the support ratio in the middle of the demographic transition was the “demographic dividend”, he said. As of 2007, China and the Republic of Korea were close to the end of their first dividend period. India was in the middle of the first dividend phase. Brazil, on the other hand, was near the end of its first dividend period. For Japan, Spain, Italy and Germany, the support ratios would drop substantially by 2050. The United States, among industrial nations, had rather high fertility.

Turning to population change, saving and capital, he noted that the first demographic dividend was transitory. Given the right policies, age structure changes could produce a second demographic dividend, which was permanent. Adults typically accumulated assets over their life cycles. The elderly held more assets than others. Population ageing raised the population share of elderly, and, therefore, raised the average amount of wealth and asset income. More capital per worker also raised labour productivity. The second dividend might be reinforced by demographic change. Longer life required increased savings for retirement. Lower fertility might mean higher saving by parents with fewer children. For that reason, the elderly might accumulate even more wealth. That did not mean, however, that the aggregate saving rate would rise with ageing.

The second dividend, however, depended on institutions, he said. If the elderly were supported by their adult children, then they saved less and held less wealth. To the extent that they were supported by unfunded public pensions, they had less reason to save and held less wealth. In both cases, the second dividend was reduced or did not occur at all. In the United States, public transfers, such as social security and Medicare were very important, while family transfers were not. In Japan, public transfers accounted for two thirds of old age consumption, while family transfers were practically nothing.

Concluding, he noted that lower fertility, longer life and slower population growth or decline were the destiny of all countries. The transition to low fertility produced increasing support ratios for a period and generated a first dividend. The first dividend was transitory. The same processes later caused population ageing, unwinding the support ratio. Institutions and programmes focused on the elderly, such as public pensions and public health care programmes, would come under severe stress. Yet, even as the population aged, the second demographic dividend raised capital per worker, boosting productivity and asset income. The second dividend depended on the specific institutional context of each country and the balance between transfers and asset accumulation for old age support. Transfers might have many good points, including strengthening familial ties, improving social equity and providing a safety net. Policy makers should weigh their costs and benefits.

He said countries early in the ageing process had the option to encourage asset accumulation rather than transfers for old age support, and to harness the power of population ageing to increase wealth. After ageing had already occurred, massive implicit debt in transfer programmes made it very difficult to change. Population ageing was not a cause of alarm, but it would require adjustments in many institutions and programmes, which should be addressed early while options were still open.

Interactive Discussion

When the floor was opened for comments and questions, Professor Lee clarified for one delegation that “demographic transition” referred to general demographic changes in populations over spans of time. Certainly there were variations –- “baby booms” and “baby busts,” and so forth -– and even reversals in life expectancy and mortality rates, but such changes were nevertheless inevitable and monitoring such changes had become critical to the overall debate on population and development.

On the impact of migratory flows on demographic structures and economic transfers within and between nations, he said countries such as Spain had had a “very interesting and rapidly changing” experience with migration in recent years, with varying impacts on the economy and labour force. But, since the whole world was getting older, immigration would not, in the long run, provide a remedy to some demographic deficiencies, although perhaps over the next hundred years or so, it would continue to have an impact.

Several speakers wondered if the South would be able to produce enough jobs to accommodate the current and projected high fertility rates, while others expressed concern about the costs and difficulties of making investments and shoring up savings. One speaker also expressed concern about gender issues, namely women’s roles as caregivers for the elderly and lower wage earning profiles. On that specific issue, Professor Lee said that one way for developing countries to make some headway was to draw from the experience of the industrialized world and ensure social security initiatives that included, among other things, safeguards for surviving widows.

Statement

WERNER HAUG ( Switzerland) said that one of the achievements of the developed countries during the second half of the last century was to set up a solid social security scheme for the elderly, particularly through unfunded programmes, which guaranteed a decent minimal income. Old age was no longer a synonym for poverty and bad health. Switzerland had introduced very early a “second pillar” of funded pension programmes to complete the first pillar. The mix of unfunded with funded programmes was often regarded as an optional framework for an old age pension system.

As in most developed countries, ageing would rapidly increase in Switzerland during the next 30 years, he said. The old age pension schemes would have to finance the standard of living of a growing number of pensioners, while the population of the active age would decrease. The pension schemes would be obliged to reduce certain benefits and increase the contributions. Ageing, however, was too often discussed in negative terms. Ageing was, first and foremost, a fundamentally positive message, offering new opportunities, particularly for the elderly. The fundamental challenge was to identify and mobilize the positive forces of ageing and to adapt the institutional framework to the conditions and needs of an ageing society. Older persons should have the opportunity to lead an autonomous life as long as possible and participate actively in society. It was essential to give older people a voice.

He added that Switzerland was also elaborating a policy to help support young people, directed toward improving the situation of poor people, and to expand opportunities for such youth. Young people must be more than mere beneficiaries of the system, but actors in their own right and a necessary partner in development. The Second World Assembly emphasized the right of the individual to develop their full potential throughout life. The International Labour Organization had set priorities for a decent work agenda, including social security schemes for unemployment. The private sector and developed countries also needed to cooperate more with developing countries to set up conditions of decent work and adequate social security systems. The solutions applied in the developed countries could not be transposed to other parts of the world, but needed to be sensitive to specific cultural conditions.



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