i Published for the United Nations Development Programme (UNDP) ASIA-PACIFIC HUMAN DEVELOPMENT REPORT SHAPING THE FUTURE: HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT iiii ASIA-PACIFIC HUMAN DEVELOPMENT REPORT TEAM SHAPING THE FUTURE: HOW CHANGING DEMOGRAPHICS CAN POWER HUMAN DEVELOPMENT Team Leader and Lead Author Thangavel Palanivel Core Team Tasneem Mirza Bishwa Nath Tiwari Scott Standley Abha Nigam Editor Gretchen Luchsinger iii We live in times of great instability and change. That is apparent as in the Asia-Pacific region, home to half of humanity as it is anywhere else in the world. The sheer size of the region development choices will impact on the futures of people everywhere. In 2015, Asia-Pacific countries joined the in- ternational consensus on an ambitious vision to frame and guide those choices. Agenda 2030 and its seventeen Sustainable Development Goals, along with the major international agreements in 2015 on disaster risk reduction, financing for development, and climate change, have profound implications for all societies. Taken together, these agendas embody a common commitment to development which is sustainable, inclusive, and resilient. Advancing this agenda is an op- portunity to build people’s capabilities, provide opportunities for communities to thrive, and promote stewardship of natural resources to benefit people now and for generations to come. The Asia-Pacific with its economic dynamism and vast wealth in human resources is in a good position to realize the vision of the 2030 Agenda, and to be at the vanguard of the transforma- tion which its implementation requires. Many countries in the countries have improved living standards to a point where their population pro- file offers a distinct advantage—namely, smaller shares of young and old dependents, and larger shares of people in their productive working years who can power development. Making the most of this period—which will not last forever—requires smart policies and invest- ments. The greatest advances will come from recognizing that human development, where all people have access to education, health care, and a decent income, produces the demographic transition which leads to a demographic dividend. That dividend, if used wisely, can accelerate human development and prepare for that time when inevitably societies will begin to age. This Asia-Pacific Human Development Report breaks new ground in the way in which it links demography with human development. It ex- plores how periods of demographic transition come with significant opportunities, but also risks. Countries which overlook both these do so at their peril, missing out on potentially large gains in human well-being and economic prosperity. The report emphasizes that policy makers need to understand the implications of a demographic transition, and be able to incorporate appropriate responses to it across all aspects of national development planning. This report comes at an important juncture for UNDP. Our organisation recently celebrated its fiftieth birthday, and is looking to the fu- ture with confidence. The Asia-Pacific Human Development Report , with its wealth of insights and data, is one of our latest contributions to development thought leadership. I am confident that it will support policy and decision makers across the region in their work to advance human development progress. Helen Clark Administrator United Nations Development Programme FOREWORD iv This Asia-Pacific Human Development Report comes at a time when the region and the world are at crossroads. Nowhere is this more evident than in the 2030 Agenda with its 17 Sustainable Development Goals (SDGs) , endorsed in late 2015 by the 193 members of the United Nations General Assembly. It offers a fundamental re- thinking of development as a process that must be universal and transformative, and leave no one behind. The Agenda blurs the traditional lines between developing and developed countries, in keep- ing with the profound changes taking place in every region. It recognizes that no country has yet fully achieved sustainable development. It aims at systemic barriers, such as inequality, unsustainable consumption and production patterns, inadequate infrastructure and the lack of decent work. These are big issues, and our solutions must be equally bold. We have to think long term and across core economic, social and environmental dimensions. Business as usual will no longer be good enough. All countries need economies that generate enough decent work. All societies and political systems should be inclusive and cohesive. We all need healthy environments that sustain life for ourselves and our children. We need peace. Pursuing sustainable development within and across borders, recognizing our growing in- terconnectedness, will take everyone towards these goals. Asia-Pacific is a region with remarkable devel- opment achievements, but it would be easy to argue that this has been more of an ‘economic’ miracle than a ‘human development’ one. Too many people have been left behind or left on the margins. While only four out of 42 Asia-Pacific countries are still classified as low income, a disturbing 450 million extremely poor people live in what are technically middle-income countries. So we have work to do. UNDP will be there, as it has been now for five decades, to make change happen. Everything we have accomplished and will accomplish unfolds through partnerships and close attention to the priorities of the coun- tries where we work. We have a long legacy of helping develop institutional capacities, and we are already assisting the complex planning processes required to put the SDGs at the centre of national development. This current Asia-Pacific Human Development Report offers the kind of thought leadership that will also be essential. It highlights how Asia-Pacific has favourable demographic patterns that provide a historic opportunity to accelerate human development and galvanize progress on the SDGs. Aimed at catalysing informed debate around solutions, it calls on leaders from across the region to be innovative in steering new directions that can put the region where it belongs: showing the ways to a better future. Mr. Haoliang Xu UN Assistant Secretary-General and UNDP Regional Director Regional Bureau for Asia and the Pacific PREFACE v The Asia-Pacific Human Development Report is the flagship publication of UNDP’s Regional Bureau for Asia and the Pacific. Its findings, analysis and policy recommendations are those of the Regional Bureau alone and cannot be attributed to UNDP or to its Executive Board. The UN General Assembly has officially rec- ognized the Human Development Report as “an independent intellectual exercise” that has become “an important tool for raising awareness about human development around the world.” This edition of the report, Shaping the Future: How Changing Demographics Can Power Human Development , drew on contributions from many people. The report was researched and written by UNDP staff, led by Thangavel Palanivel. Tasneem Mirza, a key member of the core team, provided active and sustained support throughout the process. Team members at different points in the process included Bishwa Tiwari, who led the preparation of Chapter 4; Scott Standley, who led the preparation of Chapter 5; and Abha Nigam, who offered programme and research assistance support. We are indebted to Gretchen Luchsinger for her high-quality professional editing and for making the report highly readable; to Ramesh Gampat, who shared expertise based on previous Asia-Pacific Human Development Reports and provided significant technical contributions and advice; and to Cristina Ottolini for her attractive graphic design. We also grateful to interns Gard Heggelund, Arianna Fishman and Coralie Martin for their assistance in checking and updating data, compiling references and proofreading. The report benefited from technical