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(Embargoed until 3 December 2002, 0001 GMT)

Falling Fertility Opens a ‘Demographic Window’ of Opportunity for Economic Growth and Poverty Reduction

UNITED NATIONS, NEW YORK, 3 DECEMBER 2002 — Lower birth rates and slower population growth over the last three decades have contributed to faster economic progress in a number of developing countries, according to The State of World Population 2002 report. This positive “population effect” on the economy was due in large part to investments in health, including reproductive health, and education, in addition to providing women with more opportunities.

Poor countries, challenged by high fertility and gender inequality, have a unique opportunity to spur economic growth and ease poverty by following a similar approach.

The new report, released today by UNFPA, the United Nations Population Fund, highlights the important role of population in achieving the United Nations’ Millennium Development Goal of halving poverty by 2015.

Larger families and rapidly growing populations obstruct development and prolong poverty, at both the household and national levels. A large number of children in poor families increase competition for limited resources, including food, clothing, health and education. The effect is compounded in rural areas where large families without other resources must divide farmland among more inheritors.

At the national level, rapid population growth in poor countries stretches the demand for services, including health care and education, faster than the capacity to satisfy it. A rising number of relatively unskilled workers reduces wages overall and diminishes savings. Since economic growth stems from investments financed by savings, rapid population growth actually depresses, rather than boosts, the economy.

The report, People, Poverty and Possibilities: Making Development Work for the Poor, says that when poor families in developing countries are given opportunities, coupled with adequate access to reproductive health services, they choose to have fewer children than their parents did. This decline in fertility leads to potential economic growth within one generation, opening a once-only “demographic window” that has already helped the economies of several countries in East Asia and other regions.

As fertility declines, the working-age population increases relative to younger and older dependants. That creates a unique opportunity for families to escape poverty and for faster economic growth, provided countries make the necessary investments in health, including family planning, education and employment opportunities.

This demographic advantage is not limited to future generations. The current generation also benefits as women avoid unintended pregnancies and free themselves from the burden of many, and unwanted, children.

The demographic window, according to the report, accounted for a third of the annual economic growth of the “Asian tigers” in the 1980s and 1990s. As the proportion of their working-age population started to increase in the mid-1970s, East Asian countries benefited from their earlier investment in social services, making their economies among the fastest growing in the world.

Similar results were achieved in Mexico and other Latin American countries. The effect of declining fertility in Brazil has been equal to economic growth of 0.7 per cent of GDP per capita each year.

The report cites long-term demographic and economic data from 45 developing countries showing that high fertility increases poverty by slowing economic growth and skewing the distribution of consumption against the poor. Reducing fertility-by reducing mortality, increasing education and improving access to services, especially reproductive health and family planning-counters both of these effects.

About one in every five people lived in absolute poverty in 1980. Had all countries reduced net fertility by five births per thousand women of reproductive age during the 1980s, says the report, poverty incidence would have been reduced by a third, or to one in eight people. A fall of 4 per thousand in the net birth rate would translate into a 2.4 per cent decline in those living in absolute poverty in the next decade.

Many of the world’s poorest countries could benefit from this demographic opportunity. South Asia will reach its peak ratio of working-age to dependent-ages between 2015 and 2025. Some countries in North Africa, Western Asia and Central Asia will reach their demographic opportunity within two decades. The wealthier countries in Latin America and the Caribbean have completed the demographic transition to lower fertility and mortality, but poorer ones continue to lag.

The poorest countries, however, are still a long way from reaping the benefits of the demographic window. In order to take advantage of this unique opportunity, the report calls on national governments and international donors to make the social investments needed to guarantee the right to reproductive health and slow population growth. That would include better reproductive health services, universal education and gender equality-measures that would allow women to choose the number and spacing of their children.

If poor countries take these measures, says the report, “women and men will be healthier and more educated. They will have access among other things, to a full range of reproductive health information and services. Fertility and population growth will fall,” and “mass poverty will become a matter of history, not a threat to the future.”

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UNFPA’s State of World Population report has been published annually since 1978. Each year, the report focuses on questions of current interest and concern for the future. The report is available online, at www.unfpa.org. For more information contact Micol Zarb, +1 212 297 5042, or zarb@unfpa.org.

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