When I was thinking about topics to discuss with the new country head of the Asian Development Bank (ADB) in Thailand recently, one issue that came to mind was the challenge of population ageing in Southeast Asia. Clearly, this is a big issue for most Asian economies and the real situation may be more serious than we might have thought.
In Singapore, which already has the oldest population among the 10 Asean countries, the share of the population aged 65 and up will match that of the under-15 group for the first time in 2018. At the current pace, seniors in Singapore will outnumber its younger residents in 2030.
Analysts call this a "demographic time bomb" that could lead to increases in taxes, radical changes in demand for social services and more social challenges in general.
"Singapore is facing one of the toughest economic and social challenges since its independence in the form of a rapidly ageing workforce population," Francis Tan, a United Overseas Bank economist, wrote in a recent report.
As it reaches a tipping point in terms of greying residents, the city-state will have to increase the supply of its working-age population by easing immigration restrictions. Singapore tightened rules on hiring foreigners after the 2011 election but it clearly cannot afford zero immigration. At the same time, policymaking will be more complicated as the government must ensure the elderly population is cared for without affecting the wellbeing of younger generations.
In Japan, the world's senior citizen, decades of improving life expectancy and falling birth rates have already caused the population to shrink. Its current population of 127 million is expected to be one-third smaller in five decades. The proportion of those aged 64 and over, now about 25%, is forecast to reach 38% in that period, resulting in a surging financial and care burden on the working-age population.
Japan's demographic shift is threatening the existence of rural communities, causing public debt to skyrocket and straining the labour market. In Tokyo, there are twice as many job vacancies as applicants. The government is scrambling to cope, with policies aimed at boosting fertility and support for working mothers, a push for greater job automation and a softening of the nation's traditional aversion to immigration.
The best Asian policymakers can do is to slow the pace of population ageing, with measures such as improving fertility rates, to at least make it appear less menacing. As we cannot turn back the clock, let's face and embrace the change with enlightened policies and the courage to make the best of the short-term impacts of this shift.
There is a bright side to people living longer, of course. The current generation of over-60-year-olds is significantly different from its peers of a few decades ago. Senior populations these days are heathier and wealthier. Japan leads the world in average healthy life expectancy at 83.7 years -- 80.5 years for men and 86.8 for women, according to the World Health Organization.
As well, accumulated financial assets owned by the households headed by those over 60 made up nearly 70% of the Japanese total last year, up from 53% in 2002, according to AT Kearney. Average savings per senior household are ¥24 million per head, compared with ¥10 million for those aged 40-49. Higher net savings reflect lower mortgage debts than for those in their 40s and 50s.
Because they are healthier, Japanese seniors nowadays spend more money at fitness centres. People aged 60-69 account for 37% of the ¥400 billion spent annually on fitness clubs. That offers opportunities for "senior gyms" that emphasise a friendly environment rather than rigorous workout equipment.
Volunteering is also gaining momentum. The Japan International Cooperation Agency (Jica) offers programmes for people aged 40-69, along with their younger peers, to live abroad as volunteers and help with everything from engineering to welfare. It's a popular programme, with 2.5 candidates for every place.
Additionally, with more people living as singles and many married couples having no children, more seniors are free of conventional concerns about building a financial nest for their offspring, and thus likely to give more to charity. Proper channels should be available to allocate these funds for public good.
There is a lot to be said for "active ageing" which optimises opportunities for health, lifelong learning, security and participation to create a more vibrant senior population. As countries are ageing quickly, they have to make sure they age well by taking into account both quality of life and the economy as a whole.