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Warnings : Fast population aging poses challenges to Vietnam’s economic growth
Warnings : Fast population aging poses challenges to Vietnam’s economic growth
9/5/17
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.
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 ]
Vietnam has been starting to become one of the countries with the fastest rate of aging in the world.
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.
Population aging poses major challenges for the countries with average incomes such as Vietnam, especially the issue of protecting the interests of labourers.
The transformation of this population bring harsh consequences, it would required policy or actions and changes in social behavior to help mitigate the consequences.
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.
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.
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
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.
It is not early now to start working on policies to cope with the looming problems.
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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