The Middle East's demographic transition: what does it mean?

AuthorLaipson, Ellen

"[F]rom Morocco to Iran ... [b]irth rates are falling, and the baby boom that characterized the 1960s and 1970s has given way to a potentially more favorable situation. The population growth is occurring not in the ranks of under-15-year-old dependents, but in the ranks of the working- age population (15 to 64 year olds)."

Today's Middle East conjures up an image of masses of young disaffected males loitering in hot, densely populated cities with crumbling infrastructure and dim prospects for jobs. This picture is true-for many cities around the Mediterranean littoral--Casablanca, Algiers, Cairo and Gaza. Farther east, in Baghdad and Riyadh, the problem is also acute, but not as visible. Many believe this demographic reality is a contributing, if not determining, cause of the rise of support for the violent extremism of Osama bin Laden and Palestinian suicide bombers.

Yet professional demographers and political economists focus on a different story. For them, the important message is the demographic transition occurring across the Middle East--from Morocco to Iran. Birth rates are falling, and the baby boom that characterized the 1960s and 1970s has given way to a potentially more favorable situation. The population growth is occurring not in the ranks of under-15-year-old dependents, but in the ranks of the working age population (15 to 64 year olds). Middle Eastern states have in fact pursued effective family planning policies. It is important, therefore, amidst the unrelentingly depressing news of failed politics and peace processes, to examine more closely this demographic shift and to analyze whether it holds the key to a more promising future for the region.

Why is it promising for a state that the largest segment of its population is working adults? The concept is the demographic dividend or demographic gift. (1) According to this theory, the ratio of dependent groups (under 15 and over 65 years old) to working- age cohorts can shape the economic fortunes of a society. If a government prepares for a shift in the country's dependency ratio (e.g., from a large youth cohort to a large working-age cohort) through appropriate economic and social policies, the availability of a greater pool of workers can generate economic growth and lead to higher standards of living. Several East Asian countries experienced this demographic gift in the 1960s and 1970s. During this period, when the baby boomers moved into their working years with fewer young dependents coming in behind them, the circumstances were ripe for sustained economic growth. The availability of a larger work force became an engine for higher productivity and output.

This success also depended on economic and social policies that encouraged private sector expansion. One of the key policy instruments that worked for Japan, Korea, Taiwan and Singapore was investment in education. Even when the population shifted, the share of spending on education remained constant, so that the state was effectively investing more per student than it did when it had higher dependency ratios. (2)

It cannot be assumed that all the right circumstances prevail in the Middle East, and many economists are indeed worried about the ability of governments to generate employment opportunities for first-time job seekers, in addition to the swollen ranks of the already unemployed. (3) The potential ramifications of the demographic transition for the economics, domestic politics and regional relations of the troubled Middle East are both positive and negative.

LET'S DO THE NUMBERS

A quick review of the demographic history of the region is startling. The population of the region from roughly A.D. 1000 to 1800 remained stable at approximately 30 million. Today it is nearly 400 million. (4) The period of fastest growth occurred between 1875 and the present. Growth is predicted to continue until 2025, although the rate is gradually declining in most countries of the region. Significantly, the latter half of this period has been characterized by the political upheavals and external crises of the post-independence era. In other words, the rapid expansion of population has taken place in circumstances of political distress and poor governance.

It is estimated that by 2050, the population of the Middle East will reach a stasis point of about 700 million. These projections may even understate the progress being made across the region in bringing birth rates down; economists and demographers would be pleased if the 700 million figure in fact turned out to be too high.

Projections of population growth must take into account not only how many births occur but also how general health conditions are affecting mortality and morbidity rates. In the Middle East, the decline in births per woman has been impressive, but its net impact on population growth has been muted by the improvements in care for the elderly and the increase in life expectancy throughout most of the region. While the number of young dependents as a group is not increasing as rapidly as earlier, the number of elderly dependents is growing. This is a sign of success in public health systems and can be a source of economic activity in prosperous states, generating new service sector employment to support the needs of a healthier, older population. Of the two dependency groups, young children and those over 65, the latter can also contribute more to political and social stability. In the Arab world, the United Arab Emirates are expected to have the largest percentage of elderly within two decades and Yemen the smallest.

The UN Development Program (UNDP) Human Development Report suggests that there is a correlation between high birth rates and failure to thrive economically. (5) The Middle Eastern countries ranked highest on the human development scale also have the lowest population growth rates. Four Middle Eastern countries rank in the category of "high human development" in the UNDP's Human Development Index: Bahrain, Kuwait, United Arab Emirates and Qatar. While Kuwait's annual population growth rate has remained at 2.5 percent on average since 1975, the others are due to experience dramatic drops when figures for the period 1975 to 1999 are compared with projections for...

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