Notes

economy—by an estimated lE 150 billion in 2019 GDP—because of a high dependency ratio. Additionally, very large savings in public expenditure were forgone in health, education, and housing, amounting to a cumulative loss of lE 93,456.8 million in real terms.

The path forward can be different, though, and estimating potential gains from policies is vital for estimating their cost-effectiveness. This chapter has shown that Egypt could see very large savings in public expenditure by 2030, reaching lE 26.3 billion in housing, education, and health under an accelerated fertility decline scenario. Additionally, the economy could see potential gains in income—for example, increasing its 2030 GDP per capita by up to lE 3,918— depending on the particular fertility scenario projection. similarly, under different specifications, assumptions, and fertility decline scenarios, Egypt’s potential cumulative gain in GDP between 2020 and 2030 could be between lE 284.9 billion and lE 569.0 billion. Potential gains increase exponentially, highlighting the vitality and time-sensitivity of adopting effective policies. The economy could potentially forgo approximately lE 103.5 trillion in GDP between 2020 and 2050 by not adopting policies to pursue the accelerated fertility decline scenario.

The government therefore needs to tailor policies to ensure that the fertility decline of 1990–2010 is repeated and sustained, so as to benefit from increased GDP per capita, potentially improved human capital, and a reduction in poverty.6

The actual outcome will, of course, largely depend on the policies that the government adopts both to slow population growth and benefit from the youth bulge—including socioeconomic interventions that affect people’s decisions on the number of children—and to create productive jobs, drawing on global best practices as necessary. in short, solving Egypt’s demographic challenge will require a government whose various ministries can come together with a strong population program and plan of action, a human capital development program, and concerted development efforts. These themes are taken up in the following chapters.

NOTES

1. The UN population data were used for the retrospective and prospective population projectionsasitprovidesdetailedyearlyprojectionsbyagegroupuntil2050,whichareneeded to populate the DemProj model. CAPmAs data are relatively limited and could not therefore be used. 2. 2018 GDP and dependency ratios are used to be able to compare with the latest data available, from 2019. 3. Based on the WDi database, which deflates prices based on Egypt’s National Accounts base year of 2016/17. 4. Thisisnotthecumulativeeffect,butonlytheeffectin2019,assumingthatashockoccurred. 5. This calculation was also carried out for a growth rate of 2.0 percent, and results yielded similar estimates in potential gain, albeit lower (not shown in this report). 6. A poverty analysis could not be conducted for Egypt because of the limited data available on poverty; however, given the findings on GDP per capita and additional channels through which demographic changes affect poverty, it is likely that poverty would also decline with a decrease in dependency ratios.