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Asia’s population is ageing fast. Here’s what we can learn

Globally, the number of older persons, rising at an unprecedented rate, is forecast to exceed 2 billion by 2050. By then, nearly two-thirds of the world’s older people – close to 1.3 billion – will be living in Asia-Pacific

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When floods devastated large swaths of Myanmar last year, Aye Than and her family fled their home for a makeshift roadside shelter.

She’s now the caregiver for her 86-year-old father and her two young grandchildren. Her pregnant daughter earns a meagre income through casual labour, while her son-in-law has left to search for employment as a migrant worker. Aye is just one of the 4.5 million people in Myanmar over the age of 60, many of whom lack income and social support networks.

In the Philippines four years ago, 75-year-old Ligaya Bahillo saved part of her small income from laundry jobs to buy medicine for her hypertension. To her shock, the drugstore wouldn’t give her the significant senior citizens’ discount because she didn’t have an official ID to prove her age.

But without ever having a birth certificate, she was unable to apply for the document. Ligaya’s story illustrates the gap in many countries between social security systems meant to benefit the elderly and the realities that often prevent those systems from being properly implemented.

This chart shows the population over 60 by region.

Image: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, 2008 revision

Asia-Pacific at the forefront

These are just a couple of the many socio-economic challenges older people face in Asia and the Pacific, currently home to over half the world’s people over 60 years of age.

Globally, the number of older persons, rising at an unprecedented rate, is forecast to exceed 2 billion by 2050. By then, nearly two-thirds of the world’s older people – close to 1.3 billion – will be living in Asia-Pacific, and one in four people across the region is expected to be over 60. In north-east and East Asia, this proportion will be more than one in three people.

Women currently constitute the majority – some 54% – of the older demographic in Asia-Pacific, but represent an even greater majority, 61%, of the “oldest old” population (80 years and older).

On one hand, increasing longevity is a genuine cause for celebration, a triumph of social, economic and technological development for a region that in the not too distant past presented a very different picture of life expectancy. But the rapid pace of ageing has profound socio-economic, cultural and political implications, which governments and civil society must come together to address in countries across the spectrum – from upper-income countries such as Japan and the Republic of Korea through middle-income countries including China and Thailand, to lower-income countries such as Nepal.

This is all the more crucial within the context of the 2030 Sustainable Development Agenda underpinned by its 17 Sustainable Development Goals, whose central pledge is to ensure that “no one is left behind”.

It is creditable that more than 20 countries in Asia-Pacific have adopted national policies or established special bodies on ageing, but many others have yet to do so. And even where policies do exist, implementation must be strengthened to ensure some of our most vulnerable and marginalized fellow humans can fully benefit from them.

With insecure incomes, a lack of assets and insufficient social protection, far too many senior citizens in Asia-Pacific are struggling to get by, and many fall into extreme poverty. Barely a third receive some form of pension, and where such pensions do exist they are often insufficient to support a reasonable quality of life. Older women, as exemplified by the struggles of Aye and Ligaya, are more vulnerable to poverty, which is exacerbated by factors linked to gender equality and equity.

A different policy approach to ageing

Asia-Pacific has a long tradition of family and community support for older people, but that too is rapidly changing as lower fertility, mass migration, development and globalization change family structures and long-held values. As older people are increasingly left to fend for themselves, current government healthcare and other protection systems – if they do exist – are stretched too thin to meet their needs. Further, the vast majority of countries lack age-friendly environments including housing and infrastructure.

Governments are grappling with a shrinking labour force, escalating healthcare expenditure and pension costs within a volatile economic landscape. To maintain economic growth and keep living standards rising, policies and institutions must be reformed – there is little time to lose.

All of this requires a different political and socio-cultural mindset, one that sees the opportunities arising from an ageing population and works to turn these challenges on their head.

Asia-Pacific countries could actually reap a “longevity dividend” if older people were enabled to work for longer, but in ways appropriate to their age. Age-friendly employment policies, flexible retirement and investment in human capital, infrastructure and public services could help make this happen, alongside doing away with laws that discriminate on the basis of age. These and other approaches can and should be adopted, and a growing number of countries have already started exploring various options.

In 2002, 159 governments along with civil society organizations and representatives came together to produce the Madrid International Plan of Action on Ageing (MIPAA) – the first-ever global agreement to recognize older people as contributors to the development of their societies. Countries pledged to incorporate ageing into all social and economic development policies, including poverty-reduction programmes, as a key factor in reaching the 2015 Millennium Development Goals. This commitment was reiterated within the Ministerial Declaration on Population and Development at the Sixth Asian and Pacific Population Conference in Bangkok three years ago.

Next year, the international community will convene for the third MIPAA review – the first to be conducted in the SDGs era – and the Asia-Pacific scorecard will be key. The region has the potential to be a leader in ensuring the well-being of older citizens and, in turn, strengthening societies to help ensure absolutely no one is left behind.

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Asean

Assessing the economic impacts of COVID-19 on ASEAN countries

All ASEAN countries are dependent on tourism flows but Thailand is probably the most dependent.

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Author: Jayant Menon, ISEAS–Yusof Ishak Institute

The COVID-19 pandemic is first and foremost a human tragedy. Measures introduced to deal with the pandemic could save lives but are having wide-ranging economic effects and inducing economic contagion.

There are already studies estimating the economic impact of the virus. But greater focus is needed on the transmission mechanisms of the economic contagion and in critiquing how assessments of the economic impacts are made, concentrating on the ASEAN region.

The effects of COVID-19 are hitting ASEAN economies at a time when other risk factors, such as a global growth slowdown, were already rising.

COVID-19 is disrupting tourism and travel, supply chains and labour supply

Uncertainty is driving negative sentiment. This all affects trade, investment and output, which in turn affects growth. Tourism and business travel, as well as related industries, especially airlines and hotels, were the first to be affected. And the conditions are worsening as more countries go into shutdown.

The supply disruptions emanating mostly from China will reverberate throughout the value chain and disrupt production. Since China is the regional hub and accounts for 12 per cent of global trade in parts and components, the cost of the disruption in the short run will be high.

The negative effects of quarantine arrangements on labour supply could also be high depending on duration and sector. Manufacturing has been hit harder than service industries, where telecommuting and other technological aids limit the fall in productivity.

All these disruptions will lead to sharp declines in domestic demand. And their impact on economic growth will further propagate these disruptions. This compounding effect can magnify and extend short-run effects into the long run.

The highest economic cost could come from the intangibles

The effects of negative sentiment about growth and general uncertainty — which is already affecting financial markets — will feed into reduced investment, consumption and growth in the long run.

Rolling recessions around the world now appear inevitable, despite the stimulus measures being contemplated. If so, there will be sharp increases in unemployment and poverty. Some degree of decoupling from China, or de-globalisation in general, may also be a permanent reminder of this pandemic.

Among ASEAN countries, Singapore, Malaysia and Thailand are heavily integrated in regional supply chains and will be the most affected by a reduction in demand for the goods produced within them. Indonesia and the Philippines have been increasing supply chain engagement and will also not be immune.

Vietnam is the only new ASEAN member integrated into supply chains with China and is already suffering severe supply disruptions.

Given time, supply-side adjustments will alter trade and investment patterns. The main adjustment will involve relocating certain activities along the supply chain from China to ASEAN countries. Although the pandemic will disrupt the relocation phase, ASEAN countries can benefit from the new investments, mitigating overall negative impacts.

Thailand is probably the most tourism dependent Asean country

All ASEAN countries are dependent on tourism flows but Thailand is probably the most dependent. Cambodia and Laos receive most of their investment and aid from China, and a marked growth slowdown in China will affect them the most.

The Philippines and Mekong countries have large overseas foreign worker populations and restrictions on their movement or employment prospects as COVID-19 spreads will affect sending and receiving countries. Brunei and Malaysia are net oil exporters and the price war indirectly induced by the pandemic will hit them hard. Others will benefit from lower oil prices, as will the struggling transport sector.

In measuring the impacts of COVID-19, it is important to separate its marginal impact from observed outcomes. This is important because the remedy may vary depending on the cause of the disruption. This requires an analytical framework that can measure deviations from a baseline scenario that incorporates pre-existing trends. A model-based analysis, rather than casual empiricism, is required to reduce the problem.

Even before the outbreak, risks of a global growth slowdown were rising

The restructuring of regional supply chains had started, driven initially by rising wages in China and accelerated by the US–China trade war. While COVID-19 may further hasten the pace and extent of the restructuring, it is only partly responsible for what may happen. It would be misleading to attribute all of the current disruption to COVID-19. Had the trade war not preceded it, COVID-19 may have resulted in greater disruption to supply chains.

Any assessment of impacts must recognise that the spread of COVID-19 is unpredictable, and so too the response by governments. It is difficult to estimate the impacts of a shock that is uncertain in itself. This reiterates the need for rigorous modelling and scenario analyses. The current trend points to risks rising, often accelerating, as with previous epidemics. This uncertainty underscores the need for caution in assessing, and regular recalibration in producing assessments.

Jayant Menon is a Visiting Senior Fellow in the Regional Economic Studies Programme at the ISEAS–Yusof Ishak Institute, Singapore.

A version of this article first appeared in ISEAS Commentary.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.

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Asean

Coronavirus’ economic impact in East and Southeast Asia

The ASEAN+3 Macroeconomic Research Office (AMRO) estimates that the COVID-19 epidemic could deduct as much as half a percentage point from the economic growth of some regional economies in 2020.

East Asia Forum

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As the number of coronavirus cases continues to rise around the world, there are deep concerns over the potential economic impact of the virus.

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Asean

Trade War Incentive Schemes flourishing in ASEAN

Countries such as Thailand, the Philippines, Malaysia, and Indonesia have unveiled an array of incentive packages to entice businesses affected by the US-China trade war.

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Governments across ASEAN have been unveiling an array of incentive packages to entice businesses affected by the US-China trade war.

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