Academic journal article Journal of Southeast Asian Economies

Ageing in Asia: Trends, Impacts and Responses

Academic journal article Journal of Southeast Asian Economies

Ageing in Asia: Trends, Impacts and Responses

Article excerpt

"Stop at two!"--Singaporean population slogan in 1972

"Have three, if you can afford it!"--Singaporean population slogan in 1987

I. Introduction

Within the next few decades, Asia is poised to become the oldest region in the world.

In 1950, the elderly in Asia numbered roughly 57.6 million and accounted for no more than 4.1 per cent of the region's population (Table 1). By the middle of this century, the elderly population is projected to reach 922.7 million, and their share is expected to rise to 17.5 per cent. Asia accounted for only 44 per cent of the global elderly population in 1950, but by 2050, this share is projected to increase to 62 per cent (UN 2006).

The demographic transition towards an ageing population is more advanced in developed countries like Japan, the People's Republic of China (PRC) and the newly industrialized economies (NIEs)--Hong Kong, China, Republic of Korea (Korea), and Singapore. However, many of the developing countries in the region are on the same demographic path, and are making the transition at a much faster rate.

A rapidly ageing population can have adverse effects on economic performance and prospects through a decrease in the labour force, lower saving and investment rates, and spiralling pension and health care costs. Japan, the PRC and the NIEs are already wrestling with some, if not all, of these problems. While developing countries in Asia still have a bit of time on their side, they would do well to use that time wisely. Reforming policies and creating new structures and institutions to address the challenges of ageing is a huge and complex undertaking, one that requires a big head start.

As fertility and mortality rates continue to drop, and as the population grows older, many countries in Asia will be forced to re-examine key social and economic policies, if not abandon them altogether. Conservative Japan is now considering revising its immigration laws to deal with its shrinking workforce and ageing population (AFP 2008). For close to two decades, Singapore adopted various anti-natalist measures in a bid to keep the birthrate in check. Yet by the late 1980s, Singapore's population slogan had changed from "Stop at two" to "Have three, if you can afford it!". (1) While these policy reversals in Japan and Singapore may be the most dramatic, they certainly will not be the only countries shifting gears as a result of changing demographics and population ageing. Population ageing will touch every aspect of our lives, and unless we start making difficult policy choices soon, there is very little chance that Asia will age gracefully.

The paper is organized in six sections. Section II describes trends in ageing in Asia, focusing on differences in timing and speed across subregions. In section III, we examine the impact of ageing on the domestic economy, while section IV takes this further by focusing on the peculiar challenges that ageing presents to developing countries. Section V analyses the regional interactions taking place among countries that are economically integrated but ageing at different speeds, and how these interactions can help mitigate many of the negative impacts that ageing will have at the domestic level. Finally, in section VI, we examine policy options in dealing with the problems caused by ageing, and how different sub-regions may require different responses.

II. The Greying of Asia

Between 1950 and 1975, although the number of elderly persons increased by nearly 70 per cent from 57.6 million to 97.7 million, their share of Asia's total population was constant at 4.1 per cent. Asia was a young region then: the population share of those aged 14 and below rose from 36.2 per cent in 1950 to 39.7 per cent in 1975, and the median age declined from 22 to 20 years during the same period. The old-age dependency ratio in 1975 was a mere 6.8. By 2005, however, Asia's demographic landscape had changed completely. …

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