Background Release

COMMISSION ON POPULATION AND DEVELOPMENT TO FOCUS ON OPPORTUNITIES OFFERED

BY WORLD DEMOGRAPHIC SHIFT, DURING 9-13 APRIL MEETING AT HEADQUARTERS

NEW YORK, 5 April (United Nations Population Division) -- The ongoing profound changes in the structure of world population offer a unique window of opportunity that countries should seize, the Population Division argues in a report prepared for the Commission on Population and Development, which will meet from 9 to 13 April at United Nations Headquarters.

According to a Secretary-General’s report on the changing age structures of populations and their implications for development (document E/CN.9/2007/3), as fertility declines, there will be an increasing number of producers per effective consumer at the global level and, as societies age, there is the potential for increasing their wealth as people save more in preparation for a longer retirement period.

Because of the number of producers per effective consumer increases during the first stages of population ageing, says the report, the countries that find themselves still at those stages have a window of opportunity that may last between 40 and 60 years.  As fertility declines from high to intermediate levels and the proportion of persons of working age increases, it is possible to reap a “demographic dividend” by increasing production and improving the living standard of the whole population -- if enough jobs are generated for the increasing workforce.

Further population ageing could lead to increases in productivity and wealth, the report says.  As people live longer, they are expected to accumulate enough wealth to cover consumptions needs after retirement -- hence leading to greater investment that may itself contribute to raise productivity and earnings.

The Commission on Population and Development will focus on these trends and their consequences when it meets for its fortieth session to discuss “The changing age structures of populations and their implications for development”.

Three keynote speakers will address the session.  Ronald Lee, professor of demography and economics at the University of California-Berkeley, will speak on 9 April on the economic and demographic aspects of intergenerational transfers; Somnath Chatterji, head of the World Health Organization Multi-Country Studies team, will, on 10 April, address the health aspects of ageing; and Nyovani Madise, senior researcher at the African Population and Health Research Centre in Nairobi, will, on 11 April, focus on Africa’s young populations.

A press conference on 11 April at 1:15 p.m. will feature two of the keynote speakers, Dr. Chatterji and Dr. Madise.

Changing Age Structures and Their Implications for Development

Countries could benefit from the ageing of their populations if they take advantage of the opportunities offered by the current demographic transition, says the report of the Secretary-General on world population monitoring, focusing on the changing age structures of populations and their implications for development (document E/CN.9/2007/3).

The effects of the demographic transition on population age structures can be divided into three stages.  During the first, there is a rejuvenation of the age distribution, as the proportion of children (persons under age 15) increases.  During the second, triggered by fertility reductions, the proportion of children begins to decline, while the proportions of adults and older persons (persons over 60) rise.  During the third, the proportions of both children and adults of working age decline, and only the proportion of older persons rises, as a result of long-term reductions in both fertility and mortality.

During the transition’s second stage, working-age adults constitute a significantly larger proportion of the total population than during the first stage, so that the number of potential workers per dependant (children and older persons) increases for a certain period until it reaches a maximum.  During this period, a population is optimally placed to benefit from productive investment, because its levels of economic dependency are low and there are relatively more potential workers to support dependants.

In this stage of “demographic dividend” and “demographic window of opportunity”, possibilities present themselves for raising a country’s rate of economic growth and living standards.  Consumption per effective consumer can rise at the same time as the share of gross domestic product consumed declines, and a larger share of national output can be shifted from consumption into investment without sacrificing living standards.

In addition, as people realize that their prospects for living longer are improving, the demand for resources to support consumption in old age emerges.  At this early stage of the ageing process, countries can most easily establish an institutional framework that fosters wealth accumulation, thus setting the stage for a second demographic dividend.  This dividend arises from the improving balance of asset-holders to workers, producing higher wealth per producer, which can boost labour productivity and raise asset income -- albeit at the cost of an initial phase of slower consumption growth.  Unlike the first dividend, which is transitory, the second dividend can be a permanent feature of an older population.

Reaping the benefits provided by the two dividends depends on developing sound macroeconomic policies that promote savings and productive investment, increase employment and ensure a stable socio-economic environment facilitating sustained growth.  One of the challenges during the window of opportunity is to educate and provide employment for the rapidly growing youth population (persons aged 15-24).  In addition, societies that are advanced in the second stage need to plan for rapid population ageing by developing policies in areas such as health care provision and support to older persons.

Population ageing is pervasive and unavoidable.  By 2050, the proportion of people aged 60 will have doubled and their number will reach 2 billion -- three times what it is today.  Europe currently has the oldest population, with older persons accounting for 21 per cent of the population and children for 15 per cent.  Africa has the youngest population, with older persons representing just 5 per cent of the population and children accounting for 41 per cent.

While Africa can look forward to a longer window of opportunity if its fertility decline continues, Europe and Northern America are no longer likely to benefit from the expected changes in age structure, because both are already well advanced in the population ageing process.  Oceania will soon be in the same position as Europe and Northern America, while Asia and Latin America and the Caribbean have a couple of decades to benefit from the window of opportunity.

To take advantage of the opportunity provided by a relative increase of resources vis-à-vis consumption, countries should focus on promoting savings and on investing in both productive and human capital -- by allocating resources to the education and health of both the young and the old.

With pension reform at the top of Governments’ agendas, the report recommends a pension system consisting of a mandatory, publicly managed, unfunded pillar and a mandatory, publicly or privately managed, funded pillar that should include supplemental voluntary privately funded schemes.  Such a system would provide the institutional framework best suited to promote wealth accumulation by current workers, and thus make more likely the realization of the second demographic dividend.  To promote equity, solidarity principles should guide the operation of the system under the first pillar.

Among the other recommendations:

-- Governments should facilitate or direct the accumulation of wealth to cover consumption at older ages by setting up appropriate mechanisms to promote savings and investment, including the addition of a funded component to existing pension systems.

-- Governments should focus on intergenerational transfers and the institutions that support them, in order to ensure intergenerational equity.

-- To accrue the potential benefits of increasing support ratios, investments should be made in the education of children and youth, and in the generation of sufficient jobs for the growing labour force.

-- All countries will need to address one consequence of increased longevity, the number of persons requiring care because of disability or severe health conditions.  In particular, with the main causes of death changing, developing countries need to prepare for the burden of ill health associated with the persistence of infectious diseases and the increase of chronic disease.

-- Social pensions and other transfer programmes targeting the elderly not only have effectively reduced poverty among older persons, but have had some positive spillover effects on children and the young.  However, this indirect support by older persons for the young should not become a substitute for programmes targeting youth.

-- As Governments are increasingly concerned about the consequences of population ageing, and as policies are focusing on ensuring the long-term sustainability of pension systems and on mobilizing the full potential of people at all ages, there is a need for measures to balance work and family life and to promote gender equality.

World Population Trends

A report of the Secretary-General on world demographic trends (document E/CN.9/2007/6) describes a world characterized by significant reductions in fertility as contraceptive use has increased in most countries, both developed and developing.  However, world population is currently growing at about 1.14 per cent per year, is expected to reach 6.6 billion in July 2007 and may stabilize ultimately at about 9 billion if fertility continues to decline in the less developed regions.

Other trends include:

-- A growing number of international migrants (an estimated 191 million in 2005), not only from developing to developed countries (an estimated 62 million), but from developing countries to other developing countries (60 million).

-- A considerably older population, with the global number of persons aged 60 or over more than tripling, from 705 million in 2007 to almost 2 billion in 2050, and with the number of older persons in the world expected to exceed for the first time in history the number of children by 2050.

-- An increase in the ratio of the population aged 60 or over to the working age population not only in the developed countries, but in the less developed regions.  In the developed countries, the rate will increase from 32 persons aged 60 or over per 100 persons of working age in 2007, to 62 in 2050.  In the less developed regions, the rate will increase from 13 persons aged 60 or over per 100 persons of working age in 2007, to 34 in 2050.

-- A largely urban world, with half of the world population living in cities in 2008 for the first time in history, and with urban dwellers passing from an estimated 3.2 billion in 2005 to an expected 4.9 billion in 2030.  However, the less developed regions today have more than twice the number of urban dwellers than the more developed regions: 2.3 billion versus 0.9 billion.  By 2030, the urban population in the less developed regions is projected to be 3.9 billion, four times as large as that in the more developed regions (1 billion).

-- A longer life expectancy in developed countries as a whole, where people can expect to live 11 years longer than in developing countries (76 years compared to 65 years) and 23 years longer than in the least developed countries, two thirds of which are severely affected by the HIV/AIDS epidemic.

-- A rural population in the less developed regions (3 billion) 10 times larger than in the more developed regions (0.3 billion).  In addition, during 2005-2030 the rural population in developed countries is expected to continue its long-term decrease, down to 0.24 billion in 2030.  In contrast, the rural population of developing countries will increase until 2019, reaching 3.1 billion, only then starting a slow decline.

Changes in the age composition of a population will determine the allocation of expenditures on services needed by the different segments of the population, says the report.

Population Programmes

Also before the Commission is a report of the Secretary-General on monitoring of population programmes, focusing on the changing age structures of populations and their implications for development (document E/CN.9/2007/4).  The current demographic situation is unique, says the report, in that it encompasses the largest population ever of young people and elderly persons.  The report stresses that the needs of all groups in society, both young and old, must be met.

Until recently, most Governments focused their attention on the growth and needs of the younger generation and little attention was paid to the ever increasing numbers of older persons.  It was assumed that the family would take care of its elders, and most Governments gave low priority to the concerns of older persons.

The challenge now is to distribute limited resources to address the needs and rights of both young and old.  National development policies should consider both youth and ageing issues as part of social and economic planning.  Initiatives to address the challenges faced by each of those groups should be part of national development strategies and poverty reduction programmes.  Because women tend to outnumber men at old ages, their needs deserve special attention.

Solidarity between generations at all levels -- in families, communities and nations -- is fundamental for achieving a society where no age group is forgotten.  Intergenerational solidarity is also essential to achieve social cohesion and as a foundation for formal public welfare and informal care systems.

Prepared by the United Nations Population Fund (UNFPA), the report also describes the Fund’s Framework for Action on Adolescents and Youth, as well as the Fund’s programmatic work to assist countries in meeting the challenges of population ageing.

Financial flows

A report of the Secretary-General on the flow of financial resources for assisting in the implementation of the Programme of Action of the International Conference on Population and Development (document E/CN.9/2007/5) provides expected levels of donor and domestic expenditures for population activities in developing countries for 2005, and estimates for expenditures in 2006 and projections for 2007.

The report, prepared by UNFPA, says that donor assistance has been increasing steadily over the past few years, reaching $5.6 billion in 2004.  If this trend continues, donor assistance may have reached $6.9 billion in 2005, $7.8 billion in 2006 and may be close to $8.6 billion in 2007.  These optimistic estimates assume that donors increase their funding levels, but many major donors have not yet released their 2005 funding figures.

A rough estimate of resources mobilized by developing countries as a group yielded a figure of $17.3 billion for 2005.  This number is expected to increase to $18.7 billion in 2006 and $19.5 billion in 2007.  These figures also assume that developing countries continue to increase the resources devoted to population activities.

Although provisional figures show that both donors and developing countries are on target and indeed may have surpassed the 2005 goal of $18.5 billion, this conclusion is misleading, because the resources mobilized do not adequately address current needs, which have escalated considerably since the 1994 Population Conference and now include HIV/AIDS treatment.  Indeed, for many developing countries, the lack of adequate funding remains the chief constraint to the full implementation of the Action Programme.

The recent increase in the flow of financial resources has been primarily a result of the increase in funding for HIV/AIDS activities.  But these increases still do not meet current demands for resources to combat HIV/AIDS or treat those infected, which is higher than anticipated when the targets were set.  Funding for family planning, which has been decreasing steadily, did not reach the suggested target of $11.5 billion in 2005, and is not meeting current needs.

The target amount may not be sufficient to address current global needs, even in the area of HIV/AIDS, where most of the increase in funding has occurred and where, according to the most recent estimates by the Joint United Nations Programme on HIV/AIDS (UNAIDS), $15 billion is needed in 2006 -- $8.4 billion for prevention and $3 billion for treatment and care.  If not reversed, the trend towards less funding for family planning could undermine efforts to prevent unintended pregnancies and reduce maternal and infant mortality.

The report recommends that population issues figure prominently in national development programmes and poverty reduction strategies; that family planning and reproductive health issues receive the attention they deserve at a time when the increased focus is on combating HIV/AIDS; that the private sector play a role in mobilizing resources for population and development, in monitoring expenditures and in ensuring that targets are met; and that adequate resources be allocated to all areas of the Action Programme -- family planning, reproductive health, sexually transmitted diseases, HIV/AIDS and basic research and analysis.

Other documents

A report of the Secretary-General on programme implementation and progress of work in the field of population in 2006 (document E/CN.9/2007/7) reviews the progress made by the Population Division of the Department of Economic and Social Affairs in implementing its work programme in 2006.  It covers such activities as the analysis of fertility, mortality and international migration; world population estimates and projections; population policies; the analysis of population and development interrelationship; the preparation of publications and documents; and the substantive servicing of intergovernmental bodies.

A report of the Bureau of the Commission on its intersessional meetings (document E/CN.9/2007/2) focuses on such meetings held in New York on 3 November 2006, 7 December 2006 and 16 January 2007.  The Bureau focused on the organization of the Commission’s fortieth session and discussed the relationship of the Commission with the Economic and Social Council, the implications of relevant General Assembly resolutions for the Commission’s work and the Secretariat’s work programme in the field of population.

A note by the Secretariat (document E/CN.9/2007/8) contains the draft work programme of the Population Division for the biennium 2008-2009.

Background of the Commission

The Population Commission was established by the Economic and Social Council in 1946 and renamed Commission on Population and Development by the General Assembly in 1994.  The Commission, as a functional commission assisting the Council, is to monitor, review and assess the implementation of the Programme of Action of the International Conference on Population and Development held in Cairo in 1994, at the national, regional and international levels, and advise the Council thereon.

The Commission is composed of 47 members, who are elected on the basis of equitable geographic distribution and serve a term of four years.  The members for 2007 are Armenia, Bangladesh, Belgium, Bolivia, Brazil, Bulgaria, Cameroon, Canada, China, Comoros, Democratic Republic of the Congo, El Salvador, France, Gambia, Germany, Guyana, Haiti, Hungary, India, Indonesia, Iran, Jamaica, Japan, Kenya, Lebanon, Libya, Luxembourg, Madagascar, Malaysia, Mauritania, Mexico, Morocco, Netherlands, Oman, Pakistan, Peru, Philippines, Russian Federation, Sierra Leone, South Africa, Sweden, Switzerland, Ukraine, United Kingdom, United States, Uruguay and Zambia.

For further information, please visit www.unpopulation.org or contact the office of Hania Zlotnik, Director, Population Division, Department of Economic and Social Affairs, tel.: 212 963 3179, fax: 212 963 2147.

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For information media • not an official record