When today's industrial countries were themselves developing, their population densities and growth rates were much lower than those of developing countries today, and the pressure on their resources was consequently lower. They also had a more evenly distributed age structure and lower dependency rates, allowing social institutions to adapt gradually to the requirements of a changing population.

Populations in industrial countries as a group were fairly stable for most of the second half of the 20th century. As a result, the growth in world population in this period has been driven primarily by population growth in developing countries. The stresses and spillovers from this population growth are generally observed not, as was originally expected, at the aggregate level (for example, in large-scale famines and food shortages) but, rather, in more insidious ways-in many smaller interactions between population, poverty, and resources.²⁵ The outcomes are felt in greater pressures on fragile lands, in lower wages, and in persistent unemployment.

It is now clear that a global demographic transition is well underway, even if it is not yet complete. This is a major historic opportunity. World population is expected to stabilize by the end of this ­century at 9 billion to 10 billion people, 20 to 30 percent lower than forecast in the 1960s and 1970s. Many factors have contributed to this slowdown:

• More educated, employed women and smaller families
• Greater off-farm opportunities, creating a need for more education for children
• Widespread dissemination of modern contraceptive technology, making it easier for people to plan childbearing.

Of the expected population increase, 85 percent (3 billion) will be born in the next 50 years (figure 1.1). But the speed of the transition, and the resulting population size and structure, will vary by region (figure 1.2) and by country. If fertility rates do not fall as rapidly as now projected, aggregate populations will be larger, putting greater pressures on natural resources and the social fabric. If they drop faster, many countries will have to deal sooner than expected with another problem-an aging population. This can have major consequences, especially for rural populations, for whom formal social safety nets are either nonexistent or not well developed. For example, one consequence of China's one-child policy-which dramatically and successfully lowered aggregate population-may be that by 2030 as much as one-third of the population will be over age 65.²⁶



Influencing the demographic processes in many countries is the growing incidence of HIV/AIDS, malaria, and tuberculosis. For example, current estimates and projections in Sub-Saharan Africa indicate increasingly large losses of working-age people to the AIDS epidemic. The economic impact of such high mortality is especially serious because enormous private and public investments have already been made in members of this age group. The loss of their productive lives leaves large and unpredictable gaps in the labor force. Malaria causes high levels of adult sickness rather than deaths, but this too inflicts heavy losses on labor productivity. Changes in the incidence of disease will have profound effects on health expenditures in these African countries.

With declining fertility, the age structure of the population changes, opening a window of opportunity in developing countries for a few decades-a window they can use for catching up and raising welfare for all. As figure 1.3 shows, the proportion of the working-age population rises in relation to the proportions of children (those under 15) and the elderly (over 65), enabling societies to spend less on school construction and on old-age medical expenses and to invest the savings in generating economic growth. But such benefits will materialize only if the members of the working-age population are gainfully employed and have opportunities to expand their asset base. Eventually, dependency ratios rise again as these workers age, and the window of opportunity starts to close, as it will soon begin doing in East Asia and Eastern Europe (see figure 1.3).



Some regions, notably East Asia, have benefited substantially from the drop in the ratio of dependents to workers.²⁷ Investment in forming a skilled, healthy labor force, combined with policy and institutional settings conducive to using this labor force effectively, helped generate strong economic growth. Two keys to success were maintenance of an open economy and investment in sectors with high growth potential. Since most developing regions will continue to experience relatively low dependency ratios for some decades, careful preparation now can help make the most of their windows of opportunity.

Until now, populations have been growing too rapidly for fiscally constrained governments to expand the provision of jobs, infrastructure, and public services enough to keep pace with people's needs. This task will become easier now that the global population is approaching stability. Governments in both urban and rural areas can move from catching up with the quantitative need for services, to upgrading their quality. Much of the social tension and frustration arising from unemployment and poor public services can then be attenuated.

Lower rates of population growth will reduce pressure on natural resources, but this will be offset by the increase in per capita consumption. The latter trend makes it essential to adopt the technologies and growth paths for production and consumption that will ensure the sustainable use of natural resources. To benefit from the opportunities a stabilizing population provides, it is critical to anticipate problems and identify development strategies for getting through the transition period (the next 20 to 50 years) without creating conditions that generate further conflict or resource degradation.