by Jay Gribble, vice president, International Programs
With ICFP 2011 now underway, Wednesday morning’s plenary focused on the demographic dividend—the idea that through reducing fertility, the population structure can be modified and set the stage for economic development. Kenya and Indonesia were among the countries presented in the plenary.
Using data from the Kenya Demographic and Health Survey, USAID’s Scott Radloff presented a population pyramid of Kenya’s age structure (see figure below); however, instead of showing the entire population in Kenya in one illustration, he showed the poorest quintile on the left side and the wealthiest quintile on the right. This presentation of data made me think of the demographic inequalities that exist within Kenya or any other country. In the poorest quintile, approximately 55 percent of the population was under age 15; in the wealthiest quintile, the population bulge was between ages 20 and 34—representing 35 percent of the quintile. Perhaps we can think of an emerging “middle-age bulge” rather than the “youth bulge” that we so frequently talk about. Whether we talk about Kenya or any other country, it’s important to remember that national-level statistics hide variations that exist within different segments of that population. And in response to these variations, policymakers need to target programs and interventions toward those most in need.
Dr. Bamgang Brodjonegoro of Indonesia’s Ministry of Finance then presented data on how Indonesia is working to maximize its demographic dividend. Based on demographic analysis, he estimates that the window of opportunity for Indonesia’s demographic dividend will take place between 2020 and 2030. And to make the most of this opportunity, the government of Indonesia is investing in human capital—especially health and education—so that individuals can make more significant contributions to economic development. Three compelling pieces of evidence backed up the case. Use of family planning increased from 8 percent in 1973 to 61 percent in 2007—which is helping shift the population’s age structure so that there are fewer youth and more working-age adults. At the same time, between 1990 and 2010, Indonesia has increased its health budget, which have led to reductions in neonatal mortality (from 31 in 1990 to 17 in 2010) and under-five mortality (from 85 in 1990 to 35 in 2010). Indonesia is also aggressively investing in education—from 43 trillion rupiahs in 2001 to 267 trillion in 2011. And what differences has it made? Illiteracy has dropped from almost 5 percent to less than 2 percent and Indonesia’s human development index has increased from 64 in 1999 to 72 in 2009.
So what does it mean? First, these changes in population structure and human capital don’t just happen; they occur because of deliberate investments and policies. In Kenya, changes in the age structure are underway, but are not yet effectively changing the age distribution of the very poor. Yet the wealthy quintile shows an interesting structure that indicates that this group has moved far beyond the age structure of a typical developing country—with a broad base and very youthful age structure. And the data from Indonesia shows that strategic investments in health and education can make a difference in improving human capital, with higher levels of literacy and lower levels of mortality.
Data tell an interesting story of a window of opportunity. I look forward to what is presented in the high-level meeting for Ministers of Finance, Planning, and Health later today on realizing the demographic dividend to accelerate economic growth.