Ageing Population and Solutions

 

Deputy Minister of Labour, Invalids and Social Affairs, Nguyen Trong Dam, said that old people now account for 11 per cent of Vietnam’s population and the annual growth is 0.52 per cent. This is a very fast pace.

 

Philip O’Keefe, principal author of the report, said the future workforce of Vietnam is at risk of deficiency. The birth rate in Vietnam is currently at 1.8 per cent. Like other countries in the region, this ratio is expected to fall to 1.5 per cent then 1.4 per cent.

 

To offset the decline in people at working age, he suggested Vietnam accept young workers from other countries in the region. This is not an urgent solution but Vietnam needs to take it into account, Philip O’Keefe noted.

 

According to the WB, Vietnam needs to apply some measures, e.g. raising the working age, expanding pension system to cover more population, refine healthcare system and public finance system for long-term healthcare of the elderly.

 

According to the WB report, East Asia is ageing faster than any other region in history, and some middle-income and wealthier economies could lose as much as 15 per cent of their working-age population by 2040.

 

The report found that 36 per cent of the world’s population ages 65 and over, or 211 million people, live in East Asia, the largest share among all regions. By 2040, the greying of the population could shrink the number of working-age adults by more than 15 per cent in South Korea and more than 10 per cent in China, Thailand and Japan. In China alone, that would translate into a net loss of 90 million workers. As a result, by 2060, one in five of the oldest countries in the world will be in East Asia, compared with just one in 25 in 2010.

 

The rapid pace and sheer scale of ageing in East Asia raises policy challenges, economic and fiscal pressures, and social risks. Without reforms, for example, pension spending in the region is projected to increase by 8 - 10 per cent of gross domestic product (GDP) by 2070. Meanwhile, most East Asian health systems aren’t prepared for age-related spending, as cancer, heart disease, diabetes and other chronic illnesses could account for 85 per cent of all disease burdens by 2030. In addition, today’s older population is less likely than previous generations to have adequate family support.

 

Axel van Trotsenburg, Regional Vice President of the World Bank’s East Asia and Pacific Region, said, “Managing rapid ageing is not just about old people, but requires a comprehensive policy approach across the life cycle to enhance labour-force participation and encourage healthy lifestyles through structural reforms in childcare, education, healthcare, pensions, long-term care, and more.”

 

The report proposed countries like China, Vietnam and Thailand remove incentives in pension systems that have encouraged some workers, especially urban women, to retire too early. More advanced economies such as South Korea and Japan would also benefit from opening up their ageing labour markets to attract young immigrants. Countries at all income levels will also need to keep improving the quality of their workforces by strengthening education and lifelong learning.

 

The report recommended that developing countries in East Asia take steps to reform their existing pension schemes, including considering gradual increases in retirement age. Such changes would also make it possible to expand currently low pension coverage to include those working in the informal economy.