Once-in-a-Species Opportunity: For a World Free of Poverty, Seize the Demographic Dividend in AfricaApril 11, 2013 By Laurie Mazur
A world “free from the stain of poverty” is within our grasp, declared World Bank President Jim Yong Kim in a speech at Georgetown University last week. Kim then announced a plan to virtually eradicate extreme poverty by 2030.
It is a breathtakingly ambitious goal, and its success will hinge, in part, on whether today’s low-income countries can take advantage of something called the “demographic dividend,” according to panelists at an event hosted by the Aspen Institute last week.
The demographic dividend is an economic boost that follows when mortality and birthrates fall – if the right policies and investments are in place. In Africa, where two-thirds of the population lives on less than $2 a day and birthrates are still high but falling in many places, harnessing the dividend is “not just a once-in-a-lifetime opportunity,” said Shantayanan Devarajan, chief economist for the World Bank’s Africa Region, “it is a once-in-a-species opportunity.”
That opportunity has caught the attention of economists like Devarajan, as well as journalists and experts in development, public health, environmental sustainability, and national security. Devarajan was joined by Eliya Zulu, executive director of the African Institute for Development Policy, and Steve Feldstein, director of USAID’s Office of Policy.
The demographic dividend is not just a theoretical construct. It has happened before: In the “Asian Tiger” countries, including South Korea and Singapore, the dividend is thought to account for one third of the explosive economic growth seen in recent decades. It also happened, on a smaller scale, in Latin America. Today, sub-Saharan Africa – with its large, youthful population – is poised to seize the biggest dividend yet.
But, as all of the panelists agreed, the demographic dividend doesn’t just happen. It requires the right mix of policies and investments, and collaboration across sectors. The good news is that there are many ways governments can help it along.
First, governments can foster conditions that enable couples to choose smaller families. As Marissa Yeakey of the Population Reference Bureau explained in an opening presentation, the opportunity for a dividend arises when couples choose to have smaller families and fertility rates decline.
“Without fertility decline,” said Zulu, “there is no demographic dividend.”
Smaller families mean that, for a period of time, there are more working-age adults relative to children, which creates a labor surplus. And fewer children means that families and societies are spending less on dependent-care expenses. If those savings are plowed into productive investments – like health care, infrastructure, and job creation – they can jumpstart economic growth and human development.
African nations can speed fertility declines with careful spending, Yeakey explained. Smaller families typically become the norm when family planning services are widely available, when girls are educated, and when parents are confident that their children will survive. Still, much remains to be done: despite considerable recent progress, sub-Saharan Africa has the world’s lowest rates of girls’ education and highest rates of child mortality. And nearly 50 million African women wish to postpone or end childbearing but are not using modern contraception. In fact, the need for family planning in Africa is “more unmet than met,” said Zulu.
Providing Quality Jobs
While the shift to smaller families is an important first step, it is not sufficient to reap the dividend, said Feldstein. Nations must also focus on creating good jobs for the large cohort of working-age adults.
According to Devarajan, fully 80 percent of the African labor force now works in the “informal sector” – low-productivity agriculture and household enterprises. And 40 percent of Africa’s people are under the age of 15. As that large generation comes of age, the need for decent jobs will grow exponentially. Without employment opportunities, the demographic dividend could become “a demographic curse,” said Zulu.
To generate opportunities in the formal sector, Feldstein said, African nations should promote democratic governance, property rights, and land tenure, while tackling perennial problems such as graft and corruption.
“The demographic dividend should not be seen as a replacement for development,” said Zulu, “It’s about encouraging investments in interventions that on their own would address poverty.” Child survival, girls’ education, family planning, job creation, good governance – each of these measures is important in its own right and each would have myriad positive side-effects.
In other words, everything that must be done to reap the demographic dividend in Africa is worth doing anyway. The demographic dividend is best thought of as a “bonus” that comes from much-needed investments in human well-being, Zulu said.
The real bonus? If all goes right, our children could inherit a world “free from the stain of poverty.”
Laurie Mazur is independent writer and consultant to non-profit organizations. She is the editor, most recently, of A Pivotal Moment: Population, Justice and the Environmental Challenge (Island Press, 2009).
Sources: Aspen Institute, International Monetary Fund, Population Reference Bureau, UN, World Bank.
Video Credit: “The Demographic Dividend: It’s Not Just for Demographers Anymore,” courtesy of the Aspen Institute.