Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is chief economist of the Asian Development Bank. Aiko Kikkawa, senior economist at ADB and the lead author of ‘Aging Well in Asia’, also contributed
The rapid ageing of societies across Asia and the Pacific doesn’t just raise the question of who will pay for higher pension costs. It also poses the challenge of how to meet increasing physical and mental healthcare needs.
The number of people over 60 in the region is expected to double over the next few decades. Today, on average, 57 per cent of this group have at least one noncommunicable disease — the most common are hypertension, diabetes, and heart disease — yet only four in 10 receive regular check-ups. Nearly a third experience elevated depressive symptoms, with many saying they feel isolated or lonely.
By 2050, the number of people in this age group will surge to 1.2bn, or about a quarter of the population in developing Asia and the Pacific. This demographic shift is unprecedented in its speed, fuelled by steep declines in fertility rates and occurring at an earlier stage of development than in advanced economies. While greater longevity reflects the region’s successful socio-economic development, it also presents increasingly urgent challenges.
Paramount is how to ensure the wellbeing of the soaring number of older people. Health is the most critical dimension of wellbeing, because it directly affects quality of life. But it is also key for other aspects, such as productive work, economic security, and family and social life.
Health and long-term care services will need to be expanded. This is likely to be expensive — although the experience of advanced countries shows that budget resources can be increased by mobilising more tax revenue and promoting growth-oriented spending. Over time, greater investment in healthcare can contribute to a “silver dividend” as a healthier population of older people will be more productive and require less care. In fact, the Asian Development Bank estimates that the current untapped work capacity of older persons could increase GDP by up to 1.5 per cent in some Asian economies.
Moreover, significant health and economic benefits can accrue through disease prevention. Community-based programmes have achieved promising results in lessening tobacco use, blood pressure control, diabetes management and health screening. Promoting physical activity and healthy food and diets can also minimise the burden of disease.
Beyond healthcare policies, policymakers must also tackle related challenges such as pervasive informal employment and stark gender inequality. Informal workers enjoy little or no protections at work; many have no choice but to keep working until their health fails.
Women can expect to live longer than men but are more prone to disease, and depressive symptoms with 59 per cent of older women in Asia and the Pacific suffering from at least one noncommunicable disease. At the same time, older women may have fewer resources than their male counterparts to access healthcare because their economic opportunities are constrained, and they have less access to pensions.
These challenges are interconnected, requiring governments in Asia and the Pacific to take a comprehensive approach. A top priority should be to increase pension coverage and ensure adequate benefits for the poorest.
Policies can also make it easier for older people to work, for instance by offering incentives for employers to hire and retain older workers and adapt work patterns. Outdated statutory retirement ages can be increased over time and made more flexible. Remuneration based on seniority, prevalent in many regional economies, can be reformed to make wages better reflect the productivity of older workers.
Governments can and must also do more to empower their citizens to plan and prepare for old age. Policies should focus on life-long preparation — encouraging not only healthy lifestyles, but also continuous learning to update skills and acquire new ones, and long-term financial planning for retirement. Early investments will be key to success.
The cost of inaction is high, ranging from the unhappiness of older citizens to widening inequality and lack of social cohesion, and eventually to soaring health and pension costs. The potential reward is that future generations of older people will live longer, healthier, and more productive lives.
It’s time for governments to ensure that people throughout Asia and the Pacific can realise their aspirations to live well by ageing well.
Read the full article here
