Asia-Pacific Human Development Report 2016 - Shaping the Future: How changing demographics can power human development

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People are the real wealth of nations. The opportunities they have and the choices they make determine the course of human development—nowhere more so than in Asia-Pacific, home to half the world’s population. Asia-Pacific’s future, to a large extent, shapes the world’s future.
This ‘demographic destiny’ is not one with fixed outcomes, however. Beyond the sheer size of its population, Asia-Pacific is in the midst of a historic demographic transition. All countries are at some stage along a continuum where the shares of younger, older and working-age people have begun to shift.

The process builds on human development gains, but also stands to advance them. Making the most of it requires people to be healthy, educated and productive, enjoying well-being at any stage of life.
This Asia-Pacific Human Development Report considers the challenges and opportunities of demographic changes from a human development perspective. It explores how ‘demographic opportunity’ invariably occurs when there is a greater share of people who can work, save and pay taxes compared to lower shares of dependent young and older people. In economic terms alone, the region’s so-called ‘demographic dividend’ is already significant, varying among subregions, but accounting for about 42 percent and 39 percent of economic growth in developed and developing Asia-Pacific countries, respectively, between 1970 and 2010.

These gains have been accompanied in many cases by significant leaps forward in human development.

Fully capitalizing on demographic changes depends greatly on how proactive countries are in steering the process across many arenas—among them, labour markets, economic growth, savings and investment, education, health and nutrition, social protection, migration, the provision of public services and the pace of urbanization. Countries that fail to plan ahead may fall short, as when inadequate investments in education shackle a growing economy since people are poorly equipped for the labour market.

Squandering the demographic opportunity can result as well in losses to human development, as in the failure to invest new resources in pensions so older people can live in dignity.

Today, Asia-Pacific has countries with some of the youngest and oldest populations in the world. But the majority of nations have entered or are on the cusp of a period where working-age people comprise a significant population share. This puts the region as a whole at a favourable juncture to reap the demographic dividend and advance human development—although not for long. Demographic transition in Asia-Pacific not only involves large numbers of people, but also a pace of change more rapid than seen anywhere before, with particular consequences for societies that will be old long before they will be rich.

The implications are increasingly urgent in light of the recently agreed Agenda 2030, which maps an ambitious global vision for sustainable development that must be translated into action within each country. Countries will have to marshal all available resources, consider the most strategic mix of public investments, and explore all possible avenues—including those opened by demographic transition—to achieve the Agenda’s 17 Sustainable Development Goals. These largely reflect the culmination of thinking that emerged in 1994 at the International Conference on Population and Development.

It explicitly drew attention to the interplay between population and human development, and the potential for unleashing progress by upholding human rights, developing people’s capabilities and protecting dignity throughout the human lifetime.

This report is roughly organized around different stages of demographic transition: at the middle, with a large share of working-age people; at the onset, where societies are very young; and at the end, with an ageing population. Some countries in Asia-Pacific will need to consider all of these stages at the same time, because they bridge different periods of transition within their own populations.

National paths forward will vary widely, but based on the findings of the report, some common priorities apply:

  • All countries need to factor demographic changes into diverse public policy areas. To leverage opportunities from demographic dynamics and accelerate human development, demographic considerations need to be integrated across core national development plans and strategies. They also should be factored into policies related to economic management, education, health, gender equality, youth, ageing and urbanization, among other issues. This would be consistent with Agenda 2030, where countries commit to take population dynamics into account in national development strategies and policies.

  • Increased investments in human capabilities are essential. These should be planned carefully against the stage of demographic transition—to help initiate it, to make the most of the dividend and to sustain human development momentum as societies age. Different priorities may be informed by principles of generational balance and fairness, and there should be a focus on enhancing education, health and other capabilities among those who are most vulnerable or marginalized, in line with Agenda 2030. The overarching aim should be to work, over time, towards the universality of services essential to human well-being.

  • Decent and productive work is fundamental for greater well-being. As the 2015 global Human Development Report argues, decent and productive work is a fundamental driver to enhance human development, and should be readily available to all. Despite 20 million new jobs every year in the last decade in Asia-Pacific, employment still falls short of the needs of burgeoning working-age populations, both in numbers of jobs and their quality. Creating more work opportunities requires strategies such as setting employment targets, formulating an employment-led development plan, building a supportive macroeconomic framework, advancing regulations to protect workers’ rights and safety, and fostering employment-intensive sectors. Targeted actions should reach out to excluded groups, towards realizing the promise of Agenda 2030 to leave no one behind.

  • Without fully unleashing the power and potential of women, the demographic dividend will remain marginal at best. The region’s generally poor record on gender equality is a loss in terms of meeting internationally agreed human rights standards, and a serious impediment to making the most of the demographic transition and advancing human development. Gender equality should be understood as an immediate policy priority of central importance for women, and for societies and economies as a whole. Achieving the 4th Sustainable Development Goal on gender equality is a top priority—whether that involves political leadership, economic participation, education, public resource allocations, prevention of gender-based violence or any other area of life.

  • Cooperating more as a region on demographic changes would recognize that many relevant issues transcend borders. One priority might be easing imbalances in migration, since ageing societies may struggle to find workers, while those in the earliest stages of transition face a surplus.
    Another could be financial integration. Older populations have savings to invest, while younger ones need to attract capital given large labour pools and the need to boost productivity.

  • More and better data is needed to gauge and manage demographic changes. High-quality data needs to be geared towards monitoring the demographic profile overall, as well as the impacts of public policy measures aimed at youth, workers, older people and migrants, and related issues such as urbanization. More data and research are necessary on upcoming challenges due to changing epidemiological profiles and technology. This would be consistent with—and might build on—the data revolution called for as part of the Sustainable Development Goals.