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| Opportunities & Exposures: Populations |
Quality, Not Quantity
Peter H. Kostmayer
09/01/2004
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Leaders in countries with declining birthrates, such as Japan and many
European nations, often worry that this trend will leave them short of both
customers to drive their economy and workers to support the growing ranks of the
aged. In an attempt to reverse this, some governments are actually offering
incentive payments to entice young women to have more children.
Such efforts
are misguided in both intent and effect. Slower population growth—even a slight
decrease in population—is not going to destroy these countries’ economies. It is
not the gross number of customers that matters, but the amount of disposable
income they have. Italy’s government is worried that its 57 million people are
not reproducing fast enough to replenish the population, but its citizens have
13 times the purchasing power of Pakistan’s 147 million people. Italy clearly
has the advantage in terms of purchasing power, the crucial element in any
market.
To consume, people must have resources. Today, nearly one-half of the
world’s population—about 2.8 billion people—are pretty poor customers. They live
on less than $2 a day, and they do without the products that matter when
accountants tally a country’s GDP. Together, their purchases account for only 6
percent of the $33 trillion global GDP.
Planning Families
These people are the ones still having large families,
although their birthrates are declining also. Of the 3 billion additional
people the world will have to support by 2050, more than 98 percent will be born
in developing countries. Because of a lack of information and limited access to
reproductive and sexual health care and services, the poor everywhere have
higher birth rates than the wealthy.
Should countries with low birthrates
endure poverty in order to encourage childbearing? Of course not. Nor will
subsidies to worldly and educated young women necessarily induce them to have
larger families. Women in wealthy countries make the decision to have smaller
families for a host of reasons; the expense of raising children is but one
factor. Many women in poor countries also want fewer children; the more educated
they become, the fewer children they tend to want. Surely, no one would argue
that poor countries should discourage education. Instead, wealthy countries
should transform those poor people into the customers and workers they will need
to sustain their economies in the future.
Obviously, this requires
investment in education and health care. Although global public spending on
education was $1.54 trillion last year, developed countries accounted for 85
percent of it. Schools in the developing world languish for lack of teachers,
books, buildings, even pencils, much less computers. People without an education
cannot find the type of work that will pay enough to make them significant
consumers.
Similarly, people with access to health care are more productive.
A 2003 World Bank report stated that total public and private health care
spending averaged $2,700 per capita in wealthier countries, while poorer African
countries managed only $29 per capita, and in some it was only $6. Every minute,
a woman dies of complications during childbirth somewhere in the world; most of
the time it is in a developing country. Twelve million children under the age of
5 die every year from treatable diseases like diarrhea, infections, malaria,
measles and malnutrition.
In 1994, participants in the International
Conference on Population and Development, sponsored by the United Nations,
grasped the links between economic growth, education and health care, especially
for women. The 179 countries, led by the United States, agreed that large-scale
investments could produce healthier, better-educated women and men who could
make responsible choices about childbearing to adjust their family size to their
resources.
Slower population growth is a triumph of farsighted planning,
foreign development assistance and international family planning. We should now
invest in helping every human being grow up to be as productive as
possible.
Additional Information
 Point: Multiply and Be Fruitful
 | Peter H. Kostmayer is a former congressman and was a senior EPA official in the
Clinton
administration. He is president of Population Connection in Washington, D.C. |
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