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The author is Chief Economist at the Asian Development Bank. Aiko Kikkawa, Senior Economist at the ADB and lead author of ‘Aging Well in Asia‘, He also contributed
The rapid aging of societies in Asia and the Pacific not only raises the question of who will pay the highest pension costs. It also poses the challenge of how to meet the growing needs for physical and mental health care.
The number of people over 60 in the region is expected to double in the coming decades. Today, on average, 57 percent of this group has at least one noncommunicable disease (the most common are high blood pressure, diabetes and heart disease), but only four in 10 receive regular checkups. 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 rise to 1.2 billion, or about a quarter of the population of developing Asia and the Pacific. This demographic shiVscek is unprecedented in its speed, fueled by sharp declines in fertility rates and occurring at an earlier stage of development than in advanced economies. While increased longevity reflects the region’s successful socioeconomic development, it also presents increasingly pressing challenges.
Of fundamental importance is how to ensure the well-being of the growing number of older people. Health is the most critical dimension of well-being, because it directly affects the quality of life. But it is also fundamental to 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 will likely be costly, although the experience of advanced countries shows that fiscal resources can be increased by mobilizing more tax revenues and promoting growth-oriented spending. Over time, increased investment in health care can contribute to a “silver dividend,” as healthier older populations will be more productive and require less care. In fact, the Asian Development Bank estimates that the current spare work capacity of older people could increase GDP by as much as 1.5 percent in some Asian economies.
Additionally, significant health and economic benefits can be derived from disease prevention. Community-based programs have shown promise in reducing tobacco use, controlling blood pressure, managing diabetes, and providing health screening. Promoting physical activity and healthy foods and diets can also minimize the burden of disease.
In addition to health policies, policymakers also face related challenges such as widespread informal employment and high gender inequality. Informal workers enjoy little or no job protection; many have no choice but to continue working until their health deteriorates.
Women can expect to live longer than men, but they are more prone to illness and depressive symptoms, with 59 percent 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 limited and they have less access to pensions.
These challenges are interconnected and require 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 example by offering incentives to employers to hire and retain older workers and to adapt work patterns. Outdated statutory retirement ages can be increased over time and made more flexible. Seniority-based pay, prevalent in many regional economies, can be reformed to make wages better reflect the productivity of older workers.
Governments can and should also do more to empower their citizens to plan and prepare for old age. Policies should focus on lifelong preparation, encouraging not only healthy lifestyles, but also lifelong learning to update and acquire new skills, and long-term financial planning for retirement. Early investment will be the key to success.
The cost of inaction is high, ranging from unhappiness among older citizens to growing inequality and lack of social cohesion to soaring health care and pension costs. The potential reward is that future generations of older people will live longer, healthier, and more productive lives.
It is time for governments to ensure that people in Asia and the Pacific can realise their aspirations of living well while ageing well.
