East Asia Pacific ageing faster than anywhere else in history: World Bank
The East Asia Pacific region is ageing at a faster rate than any other place in history, the World Bank warned Wednesday, a demographic shift likely to cramp public services and economic growth.
The region, which spans from Myanmar and China’s western borders as far east as Japan, Papua New Guinea and the Pacific islands, is now home to a third of the world’s over 65s — some 211 million people.
That lurch towards older populations will have a significant impact on economic growth in a area of the globe that has been financially booming for much of the last two decades, according to the study.
The report is titled “Live Long and Prosper: Aging in East Asia and Pacific” — a reference to the so-called Vulcan salute from the Star Trek sci-fi series.
Sharp falls in birthrates and a rise in life expectancy will likely heap pressure on public services while economies will struggle to fill the shortfall of working-age employees.
The region “has undergone the most dramatic demographic transition we have ever seen”, said Axel van Trotsenburg, regional vice president of the World Bank’s East Asia and Pacific Region.
“All developing countries in the region risk getting old before getting rich.”
Much of the swing towards a greying population is taken up by China — home to 130 million over 65s — but other middle income nations like Thailand, Vietnam and Indonesia are also swiftly ageing.
Industrialised East Asian nations such as Japan and South Korea have already experienced decades of ageing populations.
Poorer nations such as Laos, Cambodia and the Philippines will not start to see a significant swing towards an older demographic for another two decades or so.
The report’s authors warn most East Asian health systems are not prepared for the demands on healthcare and pensions posed by an ageing populous, compounding the impact of a shrinking workforce.
Calling for “a comprehensive policy approach across the life cycle”, the report urged nations to build and invest in childcare, education, healthcare and pensions to off-set the demographic time bomb.
The report recommends a range of reforms such as encouraging more women to join the labour force, a policy Japan’s Prime Minister Shinzo Abe is currently pushing with limited success.
Industrialised nations like Japan and South Korea also need to open their labour markets up to immigrants, something both nations are historically reluctant to do.
Middle income nations like China, Vietnam and Thailand should also remove incentives in pension systems that often encourage workers to retire early or increase the retirement age, the bank said.
The report’s authors estimate that unless reforms are implemented, South Korea’s working age population will decline by 15 percent by 2040. China, Japan and Thailand will see a 10 percent reduction over the same period.
News source: AFP