Warnings : Fast population aging poses challenges to Vietnam’s economic growth

09/05/2017

For roughly the last decade Vietnam has found itself in a very economically favourable demographic position. About 25 per cent of Vietnam’s 90 million population is aged between 10 and 24, while the median age is around 29. The result: lots of relatively well-educated young workers available now and for the near future to drive Vietnam’s growth, with foreign companies flocking here to take advantage of a plentiful labour supply.
Vietnam will continue to reap the benefits of this ‘demographic golden age’ for several more years with Vietnam’s growth forecast to continue. However, a demographic time bomb sits on the horizon, and Vietnam is not prepared for the aging it will bring. Vietnam’s population is growing old at the fastest rate of any nation in recorded history. Việt Nam’s aging population is growing quickly, and the nation faces pressing challenges in managing the burgeoning demographic
In about 15 years, Vietnam’s share of people aged 65 years or older will rise from 7 to 14 percent of the population. This information comes from the World Bank. Comparatively, the same demographic is expected to reach 14 per cent in Thailand in 17 years; Laos and Indonesia in 20 years; Timor-Leste, China and Singapore in 25 years; the United Kingdom in 45 years; the United States in 69 years; and France in 115 years. The change will result in a rapid decline in the working-age population in East Asia and Asia Pacific countries.
World Bank Vietnam director Victoria Kwakwa says the aging of Vietnam’s population will strain the workforce. She said, “What you’re going to see is a slowing down, beginning to slow down and ultimately shrinking of the labor force, which will make significant demands on labor productivity.” Low-cost labor has powered businesses in Vietnam. It is the only country in East Asia where economic growth was higher in 2015 than 2014, said Kwakwa.
Vietnam’s government has recognized the aging problem, but it will be difficult to turn major demographic trends around. The country’s long-standing two-child policy, though not as strictly enforced as China’s population control, has helped reign in growth almost too well.
In addition, elderly people in Việt Nam rely mainly on their own work for financial support, and 60 per cent of people polled by the World Bank said they expected more Government support in addition to their pension and support from children and other family members. Philip O’Keefe, Regional Lead Economist for Human Development for the East Asia and Pacific Region, said aging presents challenges for healthcare systems.
Firstly, the current over-reliance on hospital care could exacerbate the cost pressures brought on by an aging population with multiple non-communicable diseases.
Secondly, the poor quality of primary care presents challenges for the cost-effective management of conditions that increase with age, such as diabetes and cardiovascular disease.
Thirdly, pharmaceutical spending and procurement creates inefficiencies in healthcare, which will be exacerbated by an aging population.
He said reforms across the healthcare delivery and financing system are needed. This entails reorienting the delivery system from the intensive use of hospital care to greater reliance on primary care with improved quality and case management, as well as reforming provider payment mechanisms from fee-for-services to case-based approaches.
The report also recommends increased participation in the labour force among urban residents in their 50s and 60s. Việt Nam should also improve labour productivity to compensate for fewer workers, it said.
A larger senior citizen population could lead to labour shortages, increased funding for social welfare and a heavier burden on the public healthcare system, Đàm said.
“An aging population not only requires the country to have a better healthcare policy for older people, but also sustainable development policies, including a reproductive health policy, employment, pensions and services for senior citizens,” he said.
Shared challenges
According to a World Bank report, East Asia is aging faster than any other region in history, and some middle-income and wealthier economies could lose up to 15 per cent of their working-age populations by 2040.
The report found that 36 per cent of the world’s population aged 65 and over, or 211 million people, live in East Asia.
By 2040, the graying of the population could shrink the number of working-age adults by more than 15 per cent in 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.
The rapid pace and sheer scale of aging 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 eight to 10 per cent of the GDP by 2070.
In addition, 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.
Rapid aging in East Asia is partly a result of the region’s breakneck pace of economic development in recent decades, the report says. Higher incomes and better education have led to steady increases in life expectancy, and have been accompanied by sharp declines in fertility rates, with a growing number of countries now well below replacement levels.
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./.
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All comments [ 10 ]


John Smith 12/5/17 22:10

Vietnam has been starting to become one of the countries with the fastest rate of aging in the world.

LawrenceSamuels 12/5/17 22:11

Vietnam has reached the turning point of the elderly population size and started to become one of the countries with the fastest pace of population aging on the world.

yobro yobro 12/5/17 22:12

Population aging poses major challenges for the countries with average incomes such as Vietnam, especially the issue of protecting the interests of labourers.

MaskOf Zero 12/5/17 22:14

The transformation of this population bring harsh consequences, it would required policy or actions and changes in social behavior to help mitigate the consequences.

Only Solidar 12/5/17 22:15

This phenomenon has occurred in Korea, China, Thailand and other countries. This can be also happened in Vietnam if we do not have supportive policies.

Deck Hero14 12/5/17 22:15

it’s necessary to push media communication to raise awareness for the people and the community, including for the authorities to spread fully aware of the problem aging population.

Pack Cassiopian 12/5/17 22:17

Experts have warned that the transitional period from an aging population to an aged population in Vietnam will be about 18-20 years, much shorter than in other countries

Love Peace 12/5/17 22:18

Vietnam has entered the group of middle income countries in 2010 and is keeping up an impressive growth rate while working hard to fulfill all Millennium Development Goals by 2015.

Jane smartnic 12/5/17 22:19

It is not early now to start working on policies to cope with the looming problems.

Gentle Moon 12/5/17 22:20

The country will have to face great challenges in meeting the needs of the elderly population in the context of falling number of people in the working age group.

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