Population Growth and Economic and Social Development Addresses by A. W. Clausen President The World Bank and International Finance Corporation Address to the National Leaders' Seminar on Population and Development Nairobi, Kenya July 11, 1984 Address to the International Population Conference Mexico City August 7, 1984 The World Bank Washington, D.C., U.S.A. Address to the National Leaders' Seminar on Population and Development Nairobi, Kenya July II, 1984 Mr. Vice President, Your Excellencies, Ladies and Gentlemen: I am honored and delighted by your invitation to address this distinguished gathering. It is always a pleasure to come to this wonderful country, and I wish to thank you warmly, Mr. Vice President, for giving me this opportunity to share with you today some thoughts on the subject of population growth and development. As all of us here agree, it is a subject of vast importance and undeniable urgency. While the effects of fast population growth may vary widely, depending on the institutional, eco- nomic, cultural, and demographic setting, all the evidence points overwhelmingly to the conclusion that it slows devel- opment in the developing countries. And the poor of these countries are the principal victims of the slowdown. As I believe we can also agree, it is a problem that is insuffi- ciently understood in many quarters of the globe. One won- ders why. Even under the most optimistic assumptions, we contemplate the developing world's population of today more than doubling by the middle of the next century. In what conditions will those 6.5 billion people be forced to live-if live they can? And what if our assumptions about the decline in the average number of children born to women of child- bearing age are proven too optimistic? How many more bil- lions will be added? Unless we confront this dilemma today, there will be poverty- stricken people in tomorrow's developing world in increasing numbers and indescribable misery. Our gathering here is one more demonstration of the deep concern and commitment of President Moi, of you, Mr. Vice President, and of the government of Kenya, to meet the chal- lenge of rapid population growth in your own country. There is indeed a strong link between population growth rates on the one hand and the rate of economic and social development on the other. You have boldly recognized that link, and we 3 wish you well in your determined efforts not to let the pace of the former undermine the prospects of the latter. But we should not be content just to wish you well. The World Bank is determined to support the broad spectrum of ini~ tiatives which you and the peoples of all developing nations are taking in the struggle against poverty. Here in Kenya we are especially anxious to help you in the population field by supporting your Family Planning Program in particular and your primary~level health services and your education ser~ vices in general. We are much encouraged that you have asked us to be one of your partners in this endeavor. We will do all we can to make that participation as helpful to you as possible. You will readily understand why the World Bank, devoted as it is to the promotion of economic and social development in the developing countries, should be profoundly concerned with the population issue. Population growth is a key issue in development. We are reaffirming our recognition of that basic fact by devoting the major part of the 1984 World Development Report, published today, to this problem. In humbly commend~ ing it to you, I would like to address the principal issues it raises concerning the problem. Complex as the problem is, the message I wish to convey about it can be clearly stated in three parts. First, rapid population growth is a central development prob~ lem. Continuing rapid growth on an ever larger base will mean lower living standards for hundreds of millions of people. The main cost of such growth, borne principally by the poor in developing countries, has been, and will continue to be, lost opportunities for improving people's lives. Second, proposals for reducing population growth raise diffi~ cult questions about the proper domain of public policy. Fam~ ily and fertility are areas of life in which the most fundamental human values are at stake. Many public policy measures inev~ 4 itably influence private decisions about family size. The ques- tion is: are there public policies seeking to reduce fertility that are appropriate to an area where private rights are para- mount? Our answer is a firm "yes." Third, in the past two decades, and especially in the past ten years, many developing countries have shown that quick, ef- fective measures can be taken to reduce fertility. Experience has taught us that policy and programs can and do make a difference. Let me now expand on these three themes. And as a preface to what I want to say first about rapid population growth as a development problem, let me say something about past and future population growth in the developing world. The second half of the twentieth century stands out in history as a period of remarkable population growth. Through most of the first half of this century, population growth was at the historically rapid rate of I percent. But then it accelerated to twice that rate, and between 1950 and today the world's population has nearly doubled, from 2.5 billion to almost 4.8 billion. Until the twentieth century, prosperity and population in- crease went hand in hand. But in this century, and particularly since 1950, population growth has been faster where income is low, and concentrated in developing countries. Of the 1984 world population increase of at least 80 million, more than 70 million will be added in developing countries, which now contain about three-quarters of the global population. The delinking of population growth and prosperity occurred in part as public health and improved communications brought death rates down even where gains in living standards were small. A combination of continued high fertility and much re- duced mortality has led to population growth of between 2 percent and 4 percent a year in most developing countries as compared with I percent a year in most developed countries. 5 The stark facts are that growth at 3 percent per year means that in seventy years population grows eightfold; at 1 percent a year it merely doubles. No group of people appreciates the implications of this better than we who are assembled here today in a country where the population growth rate has been projected this year at around 4 percent. That is most probably the highest rate in the world , and one that would double Kenya's population about every eighteen years. For developing countries as a group, population growth rates have slowed somewhat, from a peak of 2.4 percent in 1965 to about 2 percent today. But further decline in population growth in developing countries will not come automatically. Much of the slowdown so far can be attributed to China, where fertility is already low-close to an average of 2.5 children per family. Most families in other developing countries now have at least four children; in rural areas five or more. For parts of South Asia and the Middle East, forecasts of a lower rate of population growth are based more on hope than on present trends . For much of sub-Saharan Africa, population growth rates are actually rising, and could rise still further. In Africa, many if not most couples say they want more chil- dren than in fact they are having, whereas mortality, still high, can be expected to decline. For example, the World Fertility Survey's findings on Kenya indicated a strong desire for large families. In 1977-78, only 17 percent of then married women stated that they wanted no more children. Among those with eight living children, only 48 percent wanted no more. At the same time, though desired family size is high, actual family size is even higher, indicating that some couples have more children than they want. The mean desired family size in 1977-78 was about seven; but the number of children each mother was having averaged eight. All this suggests that, in Kenya, there is an unmet need for family planning services. But a substantial decline in fertility can only occur if desired family size falls. 6 We should be aware, moreover, of the effects of what we call "population momentum." This simply means that growth rates will remain high in developing countries for several decades, even if couples have fewer children. Absolute annual in- creases in population are likely to rise to over 80 million people a year. And they will remain that high through the end of this century since the baby "bulge," which resulted from high fertility and falling mortality twenty years ago, has itself now entered childbearing age. Let me stress that population projections should not be treated as predictions, but as illustrations of what can happen, given reasonable assumptions. If the assumptions underlying the "standard" projections of the World Bank are correct, world population would rise from almost 4.8 billion today to almost I 0 billion by the middle of the next century. The population of today's developed countries would grow from about 1.2 billion today to 1.4 billion in 2050-an increase of some 16.5 percent. But the countries we currently classify as developing would see their total population grow from 3.6 billion to 8.4 billion, an increase of I 33 percent. By the time the world population stabilized at over I I billion in about the year 2 I 50, the population of India would be 1.8 billion, making it the most populous nation on earth. And Kenya's population would have risen from I 9.7 million today to a staggering 160 million, a situation surely as impermissible as it is unimaginable. As a group, the countries of South Asia and sub-Saharan Africa would account for about 50 percent of the world's people, compared with about 30 percent today. These are awe-inspiring projections. And yet, in some re- spects, the assumptions underlying these projections may well be optimistic. Maybe fertility will not have faIJen to re- placement level in all developing countries sixty years from now. And maybe-even though a lesser factor in high popula- tion growth-mortality will not continue to faIJ rapidly. Even with rapid income growth and advances in literacy in the next 7 two decades, the poorer countries of Africa and South Asia are not likely to reach the income and literacy levels that trig- gered fertility declines in such countries as Brazil, Korea, and Malaysia in the 1960s. Yet their fertility is projected to decline significantly. But even with those declines their population will more than double in the next fifty years. One might well ask whether population increases of this order-trebling, quadrupling, or more-would not put an unbearable strain on the existing social fabric and plunge countries into chaos. Would not rising unemployment and in- creasing landlessness overwhelm social and political institu- tions? Would not fragile administrative systems be unable to maintain health programs? Would, then, rising death rates, rather than falling birth rates, be the check on further popula- tion growth? Even under an alternative projection of still more rapid fertil- ity decline-a decline such as achieved in China, Colombia, and Thailand in the past two decades-population growth could remain great in most developing countries. We must accept the likelihood that population growth will accelerate in Africa because mortality still has far to fall and can be brought down fairly rapidly. Kenya would still have a growth rate around 2.5 percent in the year 2000, and India and Brazil around 1.5 percent. In the long run, many countries may wish to reduce their population growth rates to less than 1 percent, which is already China's goal. But the alternative projections of rates of fertility decline make one thing painfully clear: for the next several decades, most developing countries will need to make a concerted effort just to reduce population growth to a rate closer to 1 percent. To sum up this brief demographic overview: It has been almost two decades since the peak of population growth in developing countries as a whole was passed. But the turnaround to a reduced rate of growth has been slow and has been far from pervasive. Increases in population size are pro- 8 jected to mount for at least another two decades. In many countries of the developing world, populations will triple in size, or more, by the year 2050, even assuming substantial declines in fertility. Thus, two decades after the turnaround, the slow pace of change and its uneven incidence point more than ever to rapid population growth as a central development problem. Now let us return to the first of our three principal messages: that rapid population growth is a development problem. Why does it put a brake on development? There are three main reasons. First, it exacerbates the difficult choice between higher con- sumption now and the investment needed to bring higher consumption in the future. As population grows more rapidly, larger investments are needed just to maintain current capital per person, both physical capital and human capital-that is to say, a person's education, health, and skills. Otherwise, each worker will have less equipment and skills to work with, and productivity and incomes will stagnate or even fall. Every effort is thus required simply to maintain the status quo. And where it is hard to raise the level of capital and skills per worker, it is even harder to raise incomes and living standards. To illustrate this briefly: in most developing countries, the high fertility and falling infant mortality of the mid- 1960s mean that about 40 percent of populations are aged under fifteen . Countries such as Malawi face a doubling or tripling of their school-age population by the end of the century. With rapid fertility decline could come savings of more than 50 percent in the school system thirty years from now-savings that could be used to improve the quality of schooling. The same is also true of jobs. High-fertility countries face large increases in their labor forces. As an example, Nigeria's high fertility in the 1970s guarantees that its working-age popula- 9 tion will double by the end of this century. Kenya can expect an even larger increase, whereas China will experience a rise of no more than 45 percent. Second, in many countries, increases in population threaten what is already a precarious balance between natural re- sources and people, as here in Kenya. Where populations are still highly dependent on agriculture, continuing large in- creases in population can contribute to overuse of limited natural resources, such as land, mortgaging the welfare of future generations. In many parts of Africa, strains on natural resources are al- ready acute-for example, in this country, in Burundi, Malawi, eastern Nigeria, Rwanda, and parts of the Sahel region. But countries rich in natural resources do not escape the problem of rapid population growth. To exploit their natural resources, countries such as Angola, Ivory Coast, Nigeria, Zaire, and Zam- bia need extra skills, as well as heavy investment in roads and storage and distribution systems-a more difficult goal, if population is growing rapidly. In part, the problem arises because rapid population growth slows the transfer of labor out of low-productivity agriculture into modern agriculture and other modern jobs. In many countries, much of the huge projected increases in the labor force will have to be absorbed in agriculture, a difficulty which today's developed countries never faced during the period of their economic transformation. Here in Kenya, assuming a 4 percent annual increase in the number of jobs outside agri- culture and an immediate start of fertility decline, 70 percent of the labor force will still be going into agriculture forty years from now, and their number will be twice what they are today. With farm size already averaging only about three acres of prime arable or equivalent land, we are bound to ask how Kenya can sustain such numbers. Elsewhere in Africa, in parts of China, Bangladesh, and Indo- nesia, population pressure has already forced people to work IO harder, often on marginal land and shrinking farms, just to maintain household income in traditional agriculture. But the problem is not just continuing low income for many families. When undue stress is placed on traditional agricultural sys- tems and the environment is damaged, the economic well- being of the poor is particularly threatened. Here in Kenya, as elsewhere, women have to go farther and farther to find wood and water. In Addis Ababa, Ethiopia, the price of increasingly scarce wood for fuel has risen tenfold during the I 970s and now claims up to 20 percent of household incomes. In lowland areas surrounding the Ganges in southern Asia, population growth and competition for land have forced many people to live too close to the river, in the path of annual floods. Third, rapid population growth is creating urban economic and social problems that risk becoming wholly unmanageable. Cities in developing countries are growing to a size for which there is no prior experience anywhere. Between 1950 and 1980 the proportion of urban dwellers in developing countries in cities of more than 5 million increased from 2 percent to 14 percent, growing at a rate of 15 percent a year. Brazil's Sao Paulo, which by the year 2000 could well be the world's second largest city after Mexico City, was smaller in 1950 than either Manchester, Detroit, or Naples. London, the world's second largest city in 1950, will not even be ranked among the twenty-five largest by the end of the century. The rise in urban population, 60 percent of which is due to natural increase, poses unprecedented problems of management even to maintain, let alone improve, the living conditions of city dwellers. In the light of these disturbing facts about the impact of rapid population growth on development, must we conclude that the population brake on development in the Third World can nowhere be released? Countries in which education levels are already high, where much investment in transportation and communications is al- ready in place, and where political and economic systems are II relatively stable-these countries are better equipped to cope with the problem of rapid population growth. This is true whether or not their natural resources are limited or their countries are already crowded, as in economically rising East Asian countries like Korea and Singapore. But these tend also to be countries in which population growth is now slowing. Those countries where there is rapid population growth could also cope better with the problem if the right economic and social adjustments could be made fast enough, if technical change could be guaranteed, and if rapid population growth itself inspired technical change. But such growth, if anything, makes adjustment more difficult. It brings at best only the gradual adaptation which is typical of agriculture, maintaining but not increasing per capita output. It is the rich countries, where population growth rates are slow, that are the architects of technological change. Their interest is in labor-saving, not labor-using, innovations. While the effects of rapid population growth may vary widely, depending on the institutional, economic, cultural, and demo- graphic setting, the evidence points overwhelmingly to the conclusion that it slows development. And conversely, that slower population growth can help accelerate development. Policies to reduce population growth are not, of course, a panacea for development, nor are they substitutes for sensi- ble macroeconomic and sectoral policies. Trade and exchange rate policies that promote economic efficiency and do not penalize labor would ease employment problems, as would the dismantling of institutional barriers to job creation. Correct pricing policies in agriculture and more resources allo- cated to rural credit and agricultural research and extension would help increase agricultural output. But failure to address the population problem will itself reduce the set of develop- ment policies that are capable of implementation. And it would permanently foreclose some long-run development options. 12 This brings me to our second message: there are appropriate policies to slow population growth. It is the poor, with little education, low and insecure income, and poor health and family planning services who have many children. Yet it is also the poor who are the principal losers as rapid population growth hampers development. This seeming paradox provides the starting point for understanding the need for, and the designing of, appropriate policies to reduce fertility. All parents everywhere get pleasure from children. But chil~ dren involve economic costs; parents have to spend time and money bringing them up. For poor parents in developing countries, however, the economic costs can seem low in rela~ tion to the benefits. Let me cite a few reasons: • When wages are low, the difference between children's and a mother's earnings will be small; income lost by the mother during a child's infancy may often be easily recovered by the child later on. • When schooling opportunities for children are lacking, how can one argue that it is a better investment to have two or three educated children than a large family that cannot be educated? • Poor parents worry about who will take care of them in their old age or when they are ill, and for many the need for support in old age outweighs the immediate costs of chil~ dren. Since many children die young-for example, one out of five children dies before reaching the age of one in some parts of Africa, and one out of seven in much of Bangladesh, India, and Pakistan-the incentive to have many babies to ensure that a few survive is very great. These are but three of the many factors encouraging large families. Add to that the limited information about, and access 13 to, modem and safe means of contraception, and we can well understand why high fertility among the poor is so prevalent. However, parents and children do not always gain where there are many children. Inadequate access to land or the poor health of both mothers and children, often as a result of closely spaced births, can confound the parents' expectations. Thus, if parents have many children in the hope of economic gain, the first step in reducing fertility must inevitably be to work toward the reduction of their poverty and of the uncer- tainty about their own future. In this sense, the persistence of high fertility in today's developing countries is a symptom of lack of access to services that the industrial world more or less takes for granted: • health services, which reduce the need for many births to insure against infant and child mortality • education, which would raise parents' hopes for their chil- dren and would broaden a woman's outlook • social security and other forms of insurance for old age • consumer goods and social opportunities that compete with childbearing • and family planning services, which provide the means to limit births. The general components of the solution to high fertility would, therefore, seem clear enough. But in countries where there is as yet no national policy on population size and no family planning effort supported by the government, there remains the question of the justification of government action to encourage people to have fewer children. As I said at the outset, family and fertility are areas of life in which the most fundamental human values are at stake. Governments need to be very sure that public policy has a place in such private areas. 14 I would like to suggest, therefore, two broad justifications for government action. The first is that a government owes a duty to society as a whole. It cannot remain indifferent to the gap that exists be- tween an individual couple's hopes for private gain from hav- ing many children and the prospects for social gains for the community as a whole. "We wish to benefit from a large fam- ily," the couple may say, "but we wish our neighbors would have fewer children so that ours would face less competition for land and jobs." It is not easy to persuade a couple to give up the possible private benefits of many children, when its sacrifice alone would provide only minuscule benefits to other families' children and grandchildren. One family's restraint will have little negative effect on the availability of land or on resources for investment in schooling and jobs. But, as gov- ernments are all too aware, many children born of many families will. Governments are expected to have long time horizons and to weigh the interests of future generations against those of the present. They have to bear in mind not only the pressure on land and jobs that results from high fertility rates. They must also weigh the fact that health and education costs of children are heavily subsidized by the public sector, and that high fertility constrains the amount of resources available for in- vestment and, hence, for future income growth. But can high fertility be reduced so long as the individual couple's wish for itself is in conflict with its wish for society as a whole? The cause of the conflict is poverty; not just low income, but also lack of economic and social opportunities, an insecure future, and limited access to education and health and family planning services. Such a conflict requires public policy to provide alternative ways of securing the benefits that a large family of children can provide to their parents. In short, governments need to provide tangible evidence that it really is in the best private interests of parents to have fewer chil- dren . That will encourage people to make, through their gov- 15 ernment, a contract with each other: "If each of us has fewer children, we can rely on government support for nationwide measures to improve access to family planning services and to create incentives for their use, thus ensuring that everybody makes the same decision. That way we and all our children will enjoy a better chance in life." By encouraging and supporting such a social contract, the government frees each individual couple from its need to de- cide in isolation to produce more children than it would want, if others were limiting their family size. That is the first justification for government action. The second justification is that people may have more chil- dren than they want, or would want had they more information about, and access to, easier fertility control. They may lack, or disbelieve, information about falling child mortality; about the benefits to existing children of limiting family size; about the health risks to both mother and children of too many and too closely spaced births. The very idea of planning pregnancies may be unknown, and even if they know about family plan- ning, couples may not know how to practice it. Here the government's role as the disseminator of information and services is critical. It can encourage the wider provision of modern contraceptives by private suppliers. But in many countries where distribution systems are poor, health care inadequate, and demand unknown and possibly limited, gov- ernments will need to play a more direct role, subsidizing or even organizing contraceptive services. There are an estimated 65 million couples in developing countries, many of them poor inhabitants of remote rural areas, who do not want more children, but who do not use any contraception. This is often for lack of access to effective con- traceptives. This unmet need for family planning services is the strongest possible argument for government support of 16 programs that can enhance the welfare of the parents and give their children a better chance in life. To complement family planning services and social programs that help to reduce fertility, governments may wish to con- sider financial and other incentives and disincentives. Incen- tives compensate individuals for the economic and social losses of delaying births or having fewer children. They extend further the subsidy governments provide when they use pub- lic resources to deliver family planning services. Deferred incentives-that is, compensation at a later date for a couple's decision to delay or limit births-are an alternative less costly than more conventional payments for restricting fertility. The expenditures come in the future, at a time when the saving to society from fewer births is being reaped. Disincentives are the withholding of certain social benefits from those whose family size exceed a desired norm. Incentives and disincentives provide individuals with direct and voluntary tradeoffs between the number of children and possible rewards and penalties. Those who accept payment for not having children do so because they find this tradeoff worthwhile; they are compensated for some of the public sav- ings from lower fertility. Similarly with disincentives, those who choose to pay the higher costs of additional children compensate society as a whole for that private benefit. Thus, incentives and disincentives afford a choice. But choice will be preserved only if programs are well designed and carefully and fairly implemented. The third message is that we know from experience that pub- lic policy and programs can and do make a difference. Many developing countries have already shown that fertility can be reduced substantially, and over a short period of time . In today's developed countries, as development progressed, fertility fell. But current rates of population growth are much greater in the developing world than they were at comparable income levels in today's developed countries. Thus, many de- 17 - veloping countries cannot afford to wait for fertility to decline spontaneously. They need to place strong emphasis on pol- icies that will accelerate fertility decline, especially education for women and good family planning services. It is encourag~ ing, therefore, that some developing countries have already shown that these and related measures can, in fact, bring fertility down significantly. It was once assumed that reducing fertility in developing countries would require a typical sequence of economic ad- vance: urbanization, industrialization, a shift from production in the household to factory production, and incomes rising to levels enjoyed by today's developed countries. This view seemed to be confirmed by the fertility declines of the 1960s, particularly in the industrializing economies of Korea, Singa~ pore, and Hong Kong. But fertility declines beginning in other developing countries in the late 1960s, and spreading to more in the 1970s, came with a different kind of development: edu- cation, health, the alleviation of poverty, improved opportuni~ ties for women, and government effort to assure widespread access to family planning services. Declines in birth rates since 1965 have been much more closely associated with adult literacy and life expectancy than with gross national product per capita. For example, despite high average in- comes, rapid industrialization, and fast economic growth, birth rates fell less in Brazil and Venezuela between 1965 and 1975 than in Sri Lanka, Thailand, and Turkey, where income gains and social services were more evenly distributed. The association of social development-including gains in lit- eracy and life expectancy-with low fertility is not surprising. When children have a better chance of surviving and of enjoy- ing a wider range of opportunities, their parents are willing to devote more time and money to educating them, and then have fewer of them. As education brings an increase in oppor- tunities for women outside the home, those opportunities substitute for the benefits of having many children. Social development, however, comes only gradually. Encour~ agement of later marriage and longer breast~feeding can help 18 reduce the birth rate. But the experience of many developing countries shows that it is public support for family planning programs that really can lower fertility quickly. When family planning services are widespread and affordable, fertility has declined more rapidly than social and economic progress alone would predict. For example, fertility has fallen faster and to lower levels in Colombia, where family planning programs received government support starting in the late 1960s, than in Brazil, a richer country where central govern- ment involvement is minimal. It has fallen more in Egypt and Tunisia, countries with demographic objectives, than in their richer neighbor, Algeria. The evidence is clear that two policies to reduce fertility are central. One is more widespread education, especially for women; the other is easier access to contraception. In all countries, women who have completed primary school have fewer children than those with no education. Every- where, the number of children declines regularly-and usu- ally substantially-as the education of mothers increases above the primary-school level. The differences can be large; about four children between the highest and lowest groups in Colombia, for example. Education delays marriage for women, either because mar- riage is put off during schooling or because educated women are more likely to work or to take time to find suitable hus- bands. Educated women are also more likely to know about and adopt new methods of birth control. Here in Kenya, 22 percent of those with nine or more years of education use contraception, as opposed to only 7 percent with five or fewer years of education. Improving both boys' and girls' educational opportunities can have an immediate payoff in terms of lower fertility of their parents. Once they know that schooling will open up new opportunities for their children, the parents accept the risk of 19 having fewer children in order to invest more in each one. Evidence from household surveys in India, Egypt, and Nigeria shows that parents have fewer children when education is readily available. African governments should, therefore, not weaken their com- mitment to basic education for all, especially for women, de- spite current financial strains. The commitment to primary education here in Africa is strong indeed. But the indispen- sability of more education to less fertility should spur African governments to act even more determinedly on that commitment. The second central policy is making access to contraception easier. Fertility declines have everywhere been eventually tied to increasing use of contraception. Cross-country analysis has shown that, for the average country, previous fertility de- cline, indicating a continuing trend away from large families, accounted for 33 percent of the total fall in fertility between 1965 and 1976; socioeconomic change accounted for 27 per- cent. But the family planning effort accounted for more than either: 40 percent. Clearly, programs providing publicly subsi- dized information and access to modern contraceptive methods can reduce fertility. But family planning is also a health measure. In much of Africa, where the health of children and mothers is relatively poor compared to other regions, child spacing of at least two years can reduce child mortality by about 15 percent. It can also significantly reduce maternal mortality. In addition to child spacing for health, family planning programs can help adoles- cents, including young newlyweds, to avoid first births that come too early for young women. In Africa's circumstances, in particular, the provision of safe and effective family planning services can discourage recourse to traditional family planning methods that may be relatively unsafe or unworkable. Some eighty-seven countries in the developing world, repre- senting about 95 percent of its population, now provide such 20 publicly subsidized family planning programs. Tremendous progress has been made in improving couples' access to information and services. But much more needs to be done. Nearly all programs fail to reach most rural people; even in the towns and cities, the quality of services is often poor and discontinuation rates of users are high. In many countries, the potential of the private sector to provide family planning ser- vices has hardly been tapped; in others, the gap in services provided privately can be filled only by enlarging public programs. Twenty-six countries have yet to introduce family planning programs. Almost half of these are in Africa, where incomes are among the lowest in the world, population growth is the highest, and the potential benefits from family planning may be the greatest. About 40 percent of all couples in the developing world now use some form of contraception, ranging from 70 percent in China and Singapore to less than I 0 percent in most of Africa. But in all countries surveyed, the number of women of child- bearing age who want no more children exceeds the number practicing contraception. About $2 billion is currently spent on public family planning programs in developing countries each year. In most countries, it is less than $I per head of popula- tion (about $21 per user). To fill unmet needs today of women who would like to space or limit births but who are not prac- ticing contraception would require another$ I billion per year. In the next two decades, program spending will need to rise even further because of the growing number of women of childbearing age and the increasing proportion of them who are likely to want to use modern contraceptives. If developing countries are to achieve a rapid decline in fertility, leading to a developing world population of 6.5 billion in the middle of the next century, an estimated $7.6 billion (in 1980 U.S. dol- lars), or $1 .66 per capita, would be needed in the last year of this century. What we call the standard decline, leading to a developing world population of 8.4 billion in 2050, would re- quire $5 .6 billion a year at the end of this century, or $1.14 per capita. The estimated per capita expenditure on population 21 programs in developing countries today is 62 cents. That can be compared with government spending per capita of about $7 on all health programs in developing countries in 1982. The figures make it clear: relatively small increases in govern- ment spending could go a long way toward meeting the pro- jected financial requirement for supplying family planning ser- vices. That could make the difference between 6.5 billion and 8.4 billion people in the developing world by the middle of the next century. The same is true for external assistance. International aid for population programs has two major objectives: to assist governments and private organizations in providing family planning, information, and services, and to assist governments in developing population policies as part of their overall development strategy. Only about I percent of official development aid now goes for population assistance, and less for family planning. It sup- ports about 25 percent of all family planning costs in develop- ing countries, and about 50 percent of family planning programs outside China. Assuming these proportions did not change, population assistance would need to triple its current level by the year 2000 to achieve standard fertility decline, or quadruple it for the rapid decline. A quadrupling would raise annual population assistance from about $500 million in 1981 to $2 billion (in 1980 U.S. dollars} by the end of the century. Few could dispute that relatively small increases in donor assistance can, given effective policies in developing coun- tries, make a vast difference in population change and signifi- cantly improve maternal and child health. Those relatively small increases must be forthcoming. Since Sweden made its first population grant in 1968, donors have transferred more than $7 billion in population aid. Al- though its contribution has been falling in real terms since 1972, the United States has remained until now the biggest supporter of population programs, providing, along with pri- 22 vate U.S. foundations, about 40 percent of all population aid. Japan is the second largest donor. Canada, the Federal Re- public of Germany, the Netherlands, and Norway have all in- creased their share of the total. Donor assistance is provided both directly to country programs and through multilateral and nongovernmental organizations, of whom the two largest are the United Nations Fund for Population Activities (UNFPA) and the nongovernmental International Planned Parenthood Federation (IPPF). The World Bank also has an active role to play in helping address the problem of rapid population growth . The Bank attaches major importance to this key development issue and offers its support in three ways: • by helping improve understanding, through its economic and sector work and through policy dialogue with member countries, of the consequences for development of faster or slower population growth • by helping support development strategies that naturally build demand for smaller families, especially by improving women's opportunities in education and income generation • and by helping supply safe, effective, and affordable family planning and other basic health services focused on the poor in both urban and rural areas. Over a period of fourteen years, the Bank has committed about $500 million for population projects and over $I 00 mil- lion for health projects. Its operations grew in real terms by more than 5 percent per year between 1977 and 1983, despite the fact that the terms of its finance are not as easy as most population assistance, which is in grant form . Meanwhile, the Bank cooperates with other U.N. organizations, especially UNFPA and the World Health Organization (WHO), in research analysis, and operations requested by member governments. In the next few years, as part of a major effort involving donors and developing countries to increase resources for population 23 programs, the Bank intends at least to double its population and related health lending. The major focus will be on Africa and Asia. We believe that the opportunity is there, and we look forward to cooperating with governments in the design and implementation of effective population policies and pro- grams. During the next five years, the number of population and related health projects that we plan to finance in sub- Saharan Africa will rise to twenty-one from the total of three financed by the Bank in the five years to mid-1983. And the number of countries of the region which will be borrowing from us for that purpose will likely rise from three to seventeen. Small increases in spending, as I have noted, can make a big difference. Sustained progress, however, requires not just do- nor funds. It requires a firm commitment on the part of the international community to population progress as a critical part of the overall development effort. And the strongest com- mitment must be made by the governments of the develop- ing countries themselves. Religious and cultural characteristics cannot be ignored in de- signing an effective policy to reduce fertility. But they do not rule out effective action. In every part of the developing world during the past decade, some governments have made signifi- cant progress in developing a policy to reduce population growth. Where progress has been made, it has been because governments, setting explicit demographic goals, have been employing a wide range o( policies, direct and indirect, to reduce the attractions of high fertility. An effective policy requires the participation of many minis- tries, not just the Ministry of Health, and clear direction and support from the most senior levels of government. It requires the collection of reliable data and expert analysis of them to identify rapid population growth and project its conse- quences. Such information is critical to generating and sus- taining the political commitment of leaders to slow growth. Strong institutions, both central and local, are needed to 24 translate that political commitment into effective policy and action. Let me now sum up. Ten years ago, at the World Population Conference in Bucharest, a debate raged about the relative merits of devel- opment and family planning programs as alternative ways of slowing population growth. It is now clear that the dichotomy is false. Accumulating evidence on population change in de- veloping countries shows that it is the combination of social development and family planning that is so powerful in reducing fertility. But further fertility decline, and the initiation of decline where it has not begun, will not come automatically. In rural areas and among the less educated, desired family size will not be reduced much without sustained improvements in living con- ditions. The gap between the private and social gains of high fertility, itself the product of poverty, calls out for government action, especially in areas relating to women that merit gov- ernment action anyway. However, measures to raise living standards do not quickly bring about fertility reductions. The need is to act now in education, primary health care, family planning, and improv- ing women's opportunities, so as to bring a sustained decline in fertility over the long run. In the meantime, too many cou- ples still do not benefit from adequate family planning ser- vices. Family planning programs, successful as they have been, have by no means reached their full potential. Action there will provide an immediate payoff. In concluding, let me stress the central message on popula- tion growth in the World Bank's 1984 World Development Report. Economic and social progress helps slow population growth; but, at the same time, rapid population growth hampers eco- nomic development. It is therefore imperative that governments 25 act simultaneously on both fronts. For the poorest countries, development may not be possible at all unless slower popu- lation growth can be achieved soon. In the better-off develop- ing countries, continuing high fertility, especially among poor people, could prolong indefinitely the long wait for develop- ment to improve measurably the quality of their lives. No one would argue that slower population growth alone will assure progress. But the evidence in the World Development Report seems conclusive. Poverty and rapid population growth reinforce each other. Therefore, the international community has no alternative but to cooperate, with a sense of urgency, in an effort to slow population growth if development is to be achieved. But it must be slowed through policies and pro- grams that are humane, noncoercive, and sensitive to the rights and dignity of individuals. World population has grown faster, and to higher numbers, than Malthus would ever have imagined. But so have world production and income. If we can correct the current mismatch between population and income-producing ability, a mis- match that leaves many of the world's people in a vicious circle of poverty and high fertility, we may yet evade the doom which Malthus saw as inevitable. It is not inevitable that history will vindicate his dire prediction of human numbers outrunning global resources. We have a choice. But that choice must be made now. Opportunity is on our side. But time is not. Thank you. 26 Address to the International Population Conference Mexico City August 7, 1984 Mr. President, Mr. Secretary-General, Distinguished Delegates: I am grateful for the opportunity to address this plenary ses- sion of the International Population Conference. The World Bank's deep interest in the issues confronting this distinguished forum is well known . No one would argue that slower population growth can alone assure development. But the evidence is clear that, in many developing countries, de- velopment will be postponed indefinitely unless slower pop- ulation growth can be achieved soon-even before higher real incomes would bring down fertility spontaneously. That evidence is set forth in our recent staff study, the World Development Report of 1984, which I respectfully commend to you. What that evidence means is that the international com- munity must work together in a renewed effort to slow popula- tion growth . Such an effort is critical to the drive to accelerate economic and social development. The past hundred years have brought to this globe extraordi- nary economic and technological progress, and vast increases in population . It is time now to use our economic gains and our accumulated wisdom to better the human condition. We cannot and we must not bequeath to future generations a world in which the most spectacular growth has been in the number of people living in absolute poverty. The evidence is overwhelming that rapid population growth impedes efforts to raise living standards in most of the devel- oping world. There must therefore be a continuing effort to contain population growth if pervasive poverty is to be eased and development accelerated. But it must be contained through policies and programs that are humane, noncoercive, and sensitive to the rights and dignity of individuals. We be- lieve that the international community has no alternative but to cooperate, with a sense of urgency, in this endeavor. And we already know from experience that the objectives of this endeavor can indeed be achieved. 29 That is what this great gathering in Mexico City is all about. This morning, therefore, I would like to tell you how we at the World Bank will join in this endeavor. Ten years ago in Bucharest, at the first International Con- ference on Population, the World Plan of Action, which this conference is reviewing, was drawn up after a vigorous debate; a debate over whether birth rates could be brought down more rapidly by concentrating on family planning or by con- centrating on development that built demand for smaller families. During the ten years since the Bucharest conference, we have all reached the conclusion that it is a false dichotomy. Rapid reductions in population growth, and indeed rapid improve- ments in living standards, plainly require a combination of eco- nomic and social development with family planning. Let me now focus on how the Bank, as part of the develop- ment community, can support an effective combination of these approaches. We believe that assistance can be brought in three key ways: • First, through productive dialogue-dialogue between all involved in the development process-with the aim of forg- ing effective understanding of the causes and consequences of population trends, and encouraging the design of policies addressed to the link between population growth and development • Second, through supporting the economic and social devel- opment efforts in different sectors, in particular those which stimulate a demand for smaller families, such as education for women and improved economic security for the poor •Third, through assisting in the extension and improvement of family planning and basic health services. The World Bank can, and does, seek to provide effective as- sistance through each of these approaches. 30 The economic dialogue which the World Bank conducts with its borrowing member countries is the linchpin of its lending program. In it we are giving increasing attention to the conse- quences of rapid population growth. Those consequences vary, depending on the institutional, economic, cultural, and demographic setting. But most countries find that rapid popu- lation growth makes the choice between higher consumption now and the investment needed for higher consumption in the future very stark indeed. They face the pressing problem of large increases in their labor forces, alarming overcrowding of their cities, strains on basic services, and the threat to an already precarious balance between limited natural resources and a growing population. Technical change may bring some alleviation. But such change is neither free nor predictable. Frustrated development expectations, environmental stress, strain on maternal and child health, limitations on women's opportunities-all owing much to high population growth rates-are obvious issues for discussion when the Bank and its borrowing members review development strategies. The second key way in which the Bank can help is to support those aspects of development which most influence fertility. Why do poor parents say they cannot afford few children, while richer, better educated parents say they cannot afford many? Poor parents, especially mothers, are forced to depend on children for old-age support, protection, and help. But we see development generate interest in smaller families as parents' expectations for their children increase and as their own eco- nomic and social choices·expand. We must help parents reduce their dependence on children and help widen eco- nomic opportunities for women. But how can these objectives be affordably achieved? Alleviation of the severest poverty, for example by improving small-farm productivity, is a high priority. So is basic educa- tion, particularly for girls; the provision to women of more technology, credit, and productive inputs; and stronger sav- 31 ings institutions. This requires making education and produc- tion-oriented programs in agriculture and industry more accessible-and opening them more to women. These devel- opment objectives, particularly when focused on poverty al- leviation, are worth supporting in their own right. But their impact on family size is another solid reason for emphasizing them. We will strengthen our emphasis on lending for basic education, especially for women, and on encouraging policy reforms that will widen women's educational and employment options. Third, the Bank can assist in extending and improving family planning and health services. Basic health care not only serves humanitarian ends, it also improves productivity. Fam- ily planning demonstrably improves maternal and child health, reducing child mortality, which in tum promotes inter- est in family planning. Encouraging child spacing is particu- larly important. Here in Mexico, for example, the data show that the birth of a child less than two years after the birth of a sibling doubles the risk of death for the elder child during his or her second year of life. Family planning also makes a demographic difference in widely different settings. As already cited in this forum, vig- orous government support for family planning here in Mexico has helped reduce population growth from 3.2 percent in 1970 to about 2.4 percent today. Strong government support has also helped reduce population growth rates in countries such as Korea and Thailand, and, to take other examples, in Colom- bia, Indonesia, and parts of Bangladesh and India. Family planning can be effectively introduced in a broad range of conditions if service programs are carefully designed. We have seen this work in all areas of the world; it has cer- tainly worked here in Mexico. And what are the keys to effec- tiveness? They include: • offering a variety of family planning methods and informa- tion about them 32 • providing basic health care to improve maternal and child health • delivering services not just at clinics but through active out- reach programs rooted in individual communities • structuring programs that are manageable and culturally sensitive. Demand for family planning services often outruns supply. An estimated 65 million couples in the developing world, many of them poor inhabitants of rural areas, do not want more children, but do not use any contraception. This is often for lack of access to effective means of fertility control. Today, less than 40 percent of the couples in the developing world out- side China have access to adequate family planning services. In Peru, for example, collected data suggest that about half of the couples want no more children or want to space births, but lack access to family planning services. At least one-third of the couples in Bangladesh appear to face the same dilemma . These are the dimensions of the challenge. Most family planning services in developing countries are pro- vided by governments along with maternal and child health care. But private organizations are active in many countries, even though they must rely on uncertain support from abroad. In Latin America they provide services on a wide scale . Private health care providers and pharmacies reach urban and even rural areas, particularly in the better-off countries. But this alone cannot be relied upon to correct inequalities of access to services. As a practical matter, governments must be the main source of support, particularly in the poorest countries. The World Bank helps governments extend health care to- gether with family planning. Family planning and other basic maternal and child health care make a natural package. But family planning can often be underemphasized. We therefore 33 also support more focused family planning programs, some independent of the health system. In the last fourteen years the Bank has committed some $500 million for population projects and over $I 00 million for health projects. Many of the health projects include family planning. Strengthening the health system and providing a better flow of information to parents are often necessary mea~ sures to extend family planning. This is true particularly where health care ·facilities are scarce and where parents are reluc~ tant to use family planning without firmer evidence that their children will survive. In our population and health lending, the World Bank begins by working with countries to identify objectives and require~ ments for various resources. We may then help coordinate formally or informally with other donors to ensure that re~ quirements are met through a sensible division of labor. The Bank helps meet a variety of needs-clinics and equipment, medicines and contraceptives, information and education, training and local recurring costs, technical and management assistance, and efforts to test better ways to deliver health and family planning services. We know well the outstanding record of nongovernmental organizations (NGOs) in this field, and the Bank encourages continuing and growing support for them from the developing countries and the donor community. We provide modest sup~ port for NGOs through our projects with governments, and are actively exploring ways of cooperating further with them. The Bank is exploring opportunities to support further re~ search: on the consequences of population growth, on social and economic forces that influence population growth, and on more effective service delivery. We are considering direct Bank support of international efforts in contraceptive research. In short, the World Bank is both willing and able to do more in the population field. Requests for population assistance are 34 rising, and where there are programs that we can effectively support, we shall certainly respond. We plan to at least dou- ble our population and related health lending over the next few years, and our major focus will be on Africa and Asia where population and related health problems are still the most dramatic. For example, in the next five years, the number of population and related health projects that we aim to finance in sub-Saharan Africa will total more than twenty, and the borrowing countries will likely number seventeen. We look forward to cooperating with governments, with other do- nors, with other U .N. organizations, especially UN FPA, and with private organizations in the design and implementation of effective population policies and programs as requested by our member governments. With the increase in demand, and with the continuing devel- opment of effective approaches to family planning, we have concluded in our World Development Report that population as- sistance could usefully triple or even quadruple between now and the end of the century. Population assistance is now about $500 million annually-less than 2 percent of official development aid. Yet this small effort supports about 25 per- cent of all family planning costs in developing countries, and about 50 percent of family planning programs outside China. A quadrupling of population assistance in real terms could raise the level to some $2 billion per annum by the year 2000. Even such a relatively small volume of donor assistance could, given effective policies in developing countries, make a vast difference to population growth, to maternal and child health, and thus to the future we share. Surely all donors can recog- nize that fact and respond accordingly. But a few donors should not be expected to carry the bulk of the burden. The whole donor community must help. The de- veloped world has had access to good family planning ser- vices for some time now. And its experience has shown that such services cost little. If donors and developing countries were each to make minimal adjustments in their budget al- 35 locations, the resources would be there to make such services available to most people in the developing world as well. If we can make that commitment here in this forum-making the slowing of population growth the priority that it surely is- we shall have taken a giant step toward more rapid economic and social development in the developing world. Thank you. 36