Caroline van Dullemen: The impact of an ageing population

Development Policy04 Feb 2010Caroline van Dullemen

This WRR report reads like a history novel. Its brilliant style and comprehensive and detailed content make it a rich report, a must for all students of international economic relations or developmental studies. From the 500 interviews and the literature study, the WRR formulates a solid analysis and makes recommendations for changes in the organization as well as the themes. It is a timely report that will fuel an interesting political debate.

Having been actively involved in development cooperation for the last 20 years, partly as secretary to the National Advisory Council for Development Cooperation, where studying these issues was core business, I have three comments.

1. The definition of the term ‘development’. The WRR frames this as fast-track modernization, a complex interaction between economic infrastructures, the quality of governance, the functioning of the political system, and the way social relations develop. This might be a rather academic definition. In the late 1990s, much debate was on cultural relativism, which came with the debate about whether human rights were a Western concept (D.A. Bell et al). There has never been a Washington consensus around the ultimate definition of ‘modernization’, or ‘development’ for that matter. This debate is more polarized that the authors would like to believe.

2. I am not surprised that the actual recommendations do not entirely fit with the analysis; this is a common feature of many advisory reports. But I am astonished that the attention given to demographic transitions as a future trend, i.e. ageing and its consequences, is later on totally ignored in the report as a political and developmental policy issue.

In demographic research, two processes are considered to be responsible for the ageing of a population:

  1. aging at the base of the population.
  2. aging at the top.

The first results from a decline in fertility; the latter has to do with mortality reduction among older people. Both processes are recent phenomena in most developing countries.

Worldwide, populations are ageing: the current number of people aged 60 years and older is roughly 2 billion. By 2025, this will have almost doubled to 3.8 billion. Estimates predict that in 2050, 80% of this group of people over 60 years will be living in low-income countries. Even in present times, one out of five extremely poor people (living on less than US$1 a day) is aged over 60 (source: World Economic en Social Survey 2007, Development in an Ageing World, United Nations).

3. The Third World does not exist, the WRR report rightly declares. However, the number of people living in poverty (on less than US$1.25 a day) has doubled in the last 25 years. Extreme poverty is found with people who have lost their ability to work, who have lost their labour market value. These people could be handicapped, chronically ill, war victims and/or aged. However, older people and the elderly do not feature in the report.

If poverty reduction should not be the primary focus of development cooperation, then at least local capacity building, knowledge sharing (internet) and the exchange of expertise should be key. Trade not aid has so far proved to be a shallow one-liner. The WRR has paid little attention to innovative ways of long-term poverty reduction that will contribute to the modernization of regions and cultures that are developing in the shimmering radiation of globalization. The Pension & Development Network is such an example, where financial institutions in the Netherlands embrace CSR and share their pension knowledge to cooperate with microfinance institutes in setting up micro-pension systems.

The WRR has laid very solid ground for the debate on the reshaping of development cooperation into serious international cooperation based on solidarity and knowledge sharing. Development is a long-term process without any clear blueprint. Yet, developing poverty-reduction mechanisms is the urgent issue of today.