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Asia's Aging Populations Pose New Challenges for Region's Economies

October 14th 2012

Elderly man

Researchers in Asia are warning that aging populations pose challenges for governments, as economic productivity falls and more people need financial and medical support. Governments are beginning to heed the warning, pursuing a range of policies to try to address the problem.

In Singapore this year, the government unveiled a catchy song to address a topic that usually does not have dedicated state-sponsored jingles: the island state's young couples need to produce more children to help reverse declining fertility rates. The song is light-hearted, but the problem is serious. By 2030, the population will halve within a generation as the elderly are set to triple in number.  As an incentive, Singapore is offering bonuses of up to $3,250 for each of the first two children, rising to nearly $5,000 for the third and fourth offspring.

Through the 1980s and on, Asia's young working age population was a driving force for the region's economic success. But the trend in Singapore is symptomatic of broader shifts across Asia Asian Development Bank (ADB), said economist Donghyum Park.

“The share of the elderly - those aged 65 plus in total population - as well as relative working age population is steadily increasing across developing Asia. Asia is no different from the advanced economies that experienced its demographic transition much earlier," he said. In Japan in 2010, more than 22 percent of the population was aged more than 65 years.

In Thailand, the population older than 65 years has risen to just over 7.0 percent in 2010 from 3.6 percent in 1975. Thailand's family planning’s successes led to dramatically smaller families. In the 1960s, mothers had on average five to six children. Now, that figure has fallen to 1.5 children, well below the “replacement level” to hold the population steady.

For Vipan Prachuabmoh, dean of population studies at Chulalongkorn University, the population decline threatens to have a longer term economic impact. “We are concerned that we will have a decline in the number of the population in the labor force age, so the numbers are starting to decline," said Vipan. "We [also] have a very sharp rise in terms of number and the proportion of population in the old age group. So now we start to concern about the sustainability, development of the country because we still have a problem in terms of human capital.”

Ron Corben writes for VOA, from where this article is adapted.


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