ABD warns Asia facing ageing crisis
Updated
The Asian Development Bank is warning Asia is facing an ageing crisis with inadequate pensions and dwindling family support networks. The ADB's latest study also shows that two thirds of the world's elderly population will reside in Asia by the year 2050. Coupled with low fertility rates, the Manila based bank warns most Asian countries are not economically or socially prepared for the looming number of retirees.
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ASHER: Asia is going to experience among the most rapid ageing, many countries in Asia will get old before they achieve high income status of the current OECD countries. Basically each person in Asia is going to live longer than before, as person lives longer, society's resources that the person consumes particularly for health care goes up disproportionately. So we will have issues in financing pensions, health care and long term care for those who are not able to perform certain daily functions, mostly in their 80's. In some countries in Asia, this will also be tide with gender because women live longer than men but they have lower exposure to labour force, so policies will need to explicitly provide for the income security of the older women aas well.
WERDEN: What examples of have you got that the governments are taking note of this, are adapting their systems to take into account this ageing population?
ASHER: There are countries like China which has expanded the health coverage quite significantly in recent years, China is also attempting to diversify its national social security pension fund investments in order to generate higher returns. India is expanding its social safety nets including from May 2009 it has instituted a voluntary national pension scheme whereby any person can join. There are also a lot of de-centralised initiatives in countries like Indonesia, Philippines and Bangladesh where microfinance institutions are being harnessed in order to provide micro pension products. An instrument which is increasingly used to address the lower family size because of lower fertility rates is the increasing use of social pensions, the social pension idea is that, it's almost like Australia's federal level old age pension that is provided through the budgetary resources. The challenge there is to increase the fiscal capacity and improve the delivery systems so that more and more elderly can get at least a basic level of income.
WERDEN: You're confident those issues are being addressed and that we're not going to see another class of poor in Asia?
ASHER: Well I am cautiously optomistic that there is recognition, where there needs to be a lot more work done is that there needs to be more fiscal resources that need to be devoted to it and much greater professionalism with which the service delivery both in public and private sector regarding pensions and health care is undertaken. Now those are not something that can be fixed overnight, so we will see somewhat uneven progress in different countries but the countries that you mentioned whether it is high income countries like Japan, Korea, Singapore and China, Indonesia, India and Vietnam there will be reasonable amount of progress that is very likely to occur.
