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Chapter 7. Eradicating Poverty, Stabilizing Population: A Poverty-Eradication Budget
Many countries that have experienced rapid population growth for several decades are showing signs of demographic fatigue. Countries struggling with the simultaneous challenge of educating growing numbers of children, creating jobs for swelling ranks of young job seekers, and dealing with the environmental effects of population growth are stretched to the limit. When a major new threat arises—such as the HIV epidemic—governments often cannot cope.
Problems routinely managed in industrial societies are becoming full-scale humanitarian crises in developing ones. The rise in deaths in many African countries marks a tragic new development in world demography. In the absence of a concerted effort by national governments and the international community to accelerate the shift to smaller families, events in many countries could spiral out of control, leading to more death and to spreading political instability and economic decline.
There is an alternative to this bleak prospect, and that is to help countries that want to slow their population growth to do so quickly. This brings with it what economists call the demographic bonus. When countries move quickly to smaller families, growth in the number of young dependents—those who need nurturing and educating—declines relative to the number of working adults. In this situation, productivity rises, savings and investment climb, and economic growth accelerates. 64
Japan, which cut its population growth in half between 1951 and 1958, was one of the first countries to benefit from the demographic bonus. South Korea and Taiwan followed, and more recently China, Thailand, Viet Nam, and Sri Lanka have benefited from earlier sharp reductions in birth rates. This effect lasts for only a few decades, but it is usually enough to launch a country into the modern era. 65
The steps needed to eradicate poverty and accelerate the shift to smaller families are clear. They include filling several funding gaps, including those needed to reach universal primary education; to fight infectious diseases, such as AIDS, tuberculosis, and malaria; to provide reproductive health care; and to contain the HIV epidemic. Collectively, the initiatives discussed in this chapter are estimated to cost another $68 billion a year. (See Table 7–1.) 66
The heaviest investments in this effort center on education and health, which are the cornerstones of both human capital development and population stabilization. Education includes both universal primary education and a global campaign to eradicate adult illiteracy. Health care includes the basic interventions involved in controlling infectious diseases, beginning with childhood vaccinations. Adopting the basic health care program outlined in the 2001 Report of the Commission on Macroeconomics and Health to the World Health Organization would save an estimated 8 million lives per year by 2010. These are the keys to breaking out of the poverty trap. 67
As Jeffrey Sachs regularly reminds us, for the first time in history we have the technologies and financial resources to eradicate poverty. As noted earlier, the last 15 years have seen some impressive gains. For example, China has not only dramatically reduced the number living in poverty within its borders, but, with its trade and investment initiatives, it is helping poorer countries develop. China is investing substantial sums in Africa, investments often related to helping African countries develop their numerous mineral and energy resources, something that China needs. 68
Helping low-income countries break out of the demographic trap is a highly profitable investment for the world’s affluent nations. Industrial-country investments in education, health, and school lunches are in a sense a humanitarian response to the plight of the world’s poorest countries. But more fundamentally, they are investments that will shape the world in which our children will live.
|Table 7-1. Additional Annual Funding Needed to Reach Basic Social Goals|
|Goal||Funding (billion dollars)|
|Universal primary education||12|
|Eradication of adult illiteracy||4|
|School lunch programs for 44 poorest countries||6|
|Assistance to preschool children and pregnant women in 44 poorest countries||4|
|Reproductive health and family planning||7|
|Universal basic health care||33|
|Closing the condom gap||2|
Source: See endnote 66.
64. UNFPA, op. cit. note 22, pp. 14–15.
65. Population from United Nations, op. cit. note 4; UNFPA, op. cit. note 22.
66. Costs of meeting social goals in Table 7–1 calculated by Earth Policy Institute, based on the following sources: universal primary education from World Bank, cited in Blustein, op. cit. note 7; adult literacy
campaign is author’s estimate; school lunch program from McGovern, “Yes We CAN Feed the World’s Hungry,” op. cit. note 14; assistance to preschool children and pregnant women is author’s estimate of extending the U.S.’s Women, Infants, and Children program, based on ibid.; reproductive health and family planning based on the goals from and the progress since the 1994 International Conference on Population and Development (UNFPA, “Meeting the Goals of the ICPD,” op. cit. note 27), combining the $5 billion shortfalls of the developing-country and industrial-country groups; universal basic health care from Sachs and the Commission on Macroeconomics and Health, op. cit. note 32; closing the condom gap estimated from Chaya and Amen, with Fox, op. cit. note 47, and from Gardner et al., op. cit. note 47.
67. Sachs and the Commission on Macroeconomics and Health, op. cit. note 32.
68. Ibid.; U.N. Development Programme, “World on Track to Meet Millennium Goal on Extreme Poverty Thanks to India: Report,” press release (New York: 8 July 2003); Wu Xiaoling, “Statement of Madam. Wu Xiaoling, Deputy Governor of the People’s Bank of China,” speech delivered at the 39th Annual Meeting of the Board of Governors of the African Development Bank (Group), Kampala, Uganda, 25–26 May 2004.
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