COLUMN ONE : Aging Asia Feels the Squeeze : More people are living longer, fueling hot debates in a region where many countries have no safety nets for senior citizens. Societies that honor the elderly face anger, anguish over future burdens.
Asia is turning gray.
A substantial increase in their elderly populations is confronting Asian governments with such painful questions as who will care for the growing number of retired workers and what will happen to the region’s vaunted family structure under pressure from demographic change.
While the percentage of older people in Asian countries is still smaller than in many Western nations, the difference is that most Western industrialized countries already have elaborate safety nets to help the elderly with pensions, health care and even welfare. Most Asian countries have yet to enact similar benefits, making the graying of their populations one of the region’s hottest political controversies.
Hong Kong and Taiwan, two booming “tiger” economies, have endured agonized debates in the last two months about whether they can afford to give the elderly even tiny pensions. Japan’s current political battle over taxes centers largely on how it will pay its ballooning welfare bill for the old.
“Asian countries are nearing the end of what we call the demographic transition,” said Peggy Teo, a population specialist at Singapore’s National University. “If we see this trend into the future, people are wondering who is going to support us? Everyone sees a need to look ahead.”
For centuries, Asia’s population charts have looked like a pyramid. A wide base of people under 15 supported a narrower band of the middle-aged, topped by the slender sliver of the elderly.
But the percentage of the population over 60 has been steadily increasing, from Japan in the north to Indonesia in the south, in some cases dramatically. The increase is attributable to two phenomena: steadily rising life expectancy, thanks to better medical care, and a sharp decline in birthrates. Those pyramid charts are beginning to look like wine glasses.
Consider Singapore, a tiny but prosperous city-state of 3 million. In 1957, the number of people over 60 was less than 4% of the population. By 1990, it had more than doubled to 9.1%, and it is projected to rise to 26% by 2030.
While the rest of the world this spring was riveted by the story of an American teen-ager who was caned for vandalism, Singaporeans were engrossed in a passionate debate about two controversial proposals stemming directly from their demographic time bomb.
One proposal would make it possible for parents to sue their children for financial support in the way a divorced spouse can seek alimony. The other would give middle-aged family men--there has been no mention yet of married women, who are normally enfranchised--two votes in elections to help ensure that the bulging population of elderly voters won’t elect a government that promises to adopt expensive entitlement programs for the aged.
Judging by official comments, Singapore’s planners are mainly concerned with the perception that welfare programs have beggared Western governments, turned their work forces slothful and ruined their economies. “I worry that in 30 years’ time our economy may lose some of its drive, vigor and competitiveness,” said Prime Minister Goh Chok Tong.
Singapore has nothing like America’s Social Security or Medicare. Instead, it compels workers, with help from employers, to save money for retirement and health care. Welfare for the elderly is available only to the destitute, providing a miserly $100 a month per recipient.
Walter Woon, a law professor sponsoring the parent-support bill in Parliament, said he doesn’t expect a wave of lawsuits if the bill is adopted but believes fewer children will abandon their parents. “The idea is not to have litigation,” he said. “If you don’t support your parents in a society like this, you’re at the highest level of shame. The prospect of going to court would only increase the shame.”
Woon cited government statistics that show 95% of elderly people without outside incomes receive support from their children. Woon said his bill was designed to protect the 5% without such support, a segment that is expected to grow as the elderly population increases.
While a bill to protect aged parents might seem a sure-fire vote-getter in a Confucian society such as Singapore’s, it has provoked a sometimes anguished response. One social worker said children do not ask to be born, so it is parents’ responsibility to support a child, not the other way around.
The “two-votes-for-some” proposal was made by Lee Kwan Yew, Singapore’s controversial founding father, who cited statistics showing that while each retired person is supported by eight workers, by 2030 there will be only two workers per retiree.
Lee’s prominence as a senior government minister has ensured that the idea has received a wide hearing in the country, which has been ruled by one party since independence in 1965. So far, a majority of voters polled have opposed the proposal. Toh Keng Kiat, an appointed Parliament member who is not answerable to the ruling party, noted, “The danger of the system is that theoretically any government can stay in power in perpetuity, as long as it can take care of the interests of a group it gives the two votes to.”
Singapore’s demographic problems are similar to the rest of Asia’s and have been caused by two converging trends. Because of rising incomes and education, the birthrate has been steadily declining. And, thanks to better medical care, life expectancy is jumping.
The problem is most apparent in Japan, where people over 60 made up 7.7% of the population in 1950 but reached 17.5% in 1990. By 2020, this number is projected to reach 24%, the highest in the world. At the same time, life expectancy after age 60 has increased 40% for women since 1960 and 35% for men. So many Japanese are living longer, that Japan talks about “younger old” and “older old.”
A panel advising the Health and Welfare Ministry reported in March that at current levels of benefits, public welfare expenses will rise from $600 billion to $3 trillion in 2025. If this system remains in place, Japanese workers will be paying one-third of their income in social security taxes for old-age pensions, the panel said.
In part because of the growing burden of caring for the elderly, Japan has become the first Asian country to suffer a breakdown in the traditional extended family, in which several generations lived together, providing mutual support. A study conducted by Tokyo’s Nihon University found that 14.7% of women over 65 live alone, and the number is expected to rise by one-third in the next 20 years. Newspapers have reported a surging number of cases of landlords turning away elderly tenants.
In addition to the Japanese tax debate, another controversy has swirled around the age of retirement, which for decades has remained sacrosanct at 60. Last October, the government asked employers to find ways to raise the retirement age to 65, and was immediately opposed by both organized labor and industry. It is an especially tall order in an era when many Japanese companies are reducing their work forces. A compromise was suggested involving a two-tier pension system that pays lower benefits to retirees under 65.
Perhaps as a result of the recent debate, an opinion poll conducted by a Tokyo insurance company found that one in four Japanese expects to work into old age to support himself or herself.
Although Japan enjoys nearly universal health care, like many Asian countries it lacks services for the elderly such as hospital gerontology units and nursing care. “The greatest fear people have of the coming old-aged society is that the care it provides may be inadequate for those who become bedridden or suffer from senile dementia,” said Yasuhiko Yamasaki, a professor at Tokyo’s Sophia University.
Still, Japan offers far more elaborate care for the elderly than any other Asian society. In Taiwan, 4,000 elderly people marched through the streets of Taipei in June beating gongs and demanding that the government pay everyone over 65 a pension of $185 a month. The government pays $110 a month, and that only to the most desperately needy, saying it cannot afford universal pensions.
Taiwan’s answer is to offer tax breaks to companies that keep employees on the payroll after they reach 65. Singapore too is encouraging the elderly to take up hard-to-fill service jobs; the McDonald’s fast-food chain expects half of its 6,500 restaurant jobs in the island state to be filled by the elderly in three years.
Hong Kong offers no government pension benefits to the elderly except to retired civil servants, but the colony’s British administration last month proposed a $306 monthly pension for people over 65, funded by a 3% wage tax, divided evenly between workers and employers. A decision will be made this year.
Lam Woon-Kwong, secretary for education and manpower, said the government refused to bow to public pressure to help fund the plan. “This will enable Hong Kong not to fall into the same situation as in most Western countries, where politicians will make a lot of promises to increase pensions, ignoring where the money will come from,” Lam said.
Despite the government’s precautions, however, the plan has been attacked by political parties and the Hong Kong Chamber of Commerce, which said that the proposal would increase costs to business at a time when high expenses are prompting companies to move elsewhere.
“As a universal scheme, payments under the old-age pension would be made to the many who do not need it,” said chamber assistant director Ian Perkin. “It would involve substantial income redistribution--high-income earners to low-income earners, contributors to non-contributors and the working population to the aged.”
China, which will take over the colony in 1997, also has reacted coolly to the pension proposal, perhaps because it will face its own demographic problems in the 21st Century. There are already more than 100 million Chinese older than 60 in a population of 1.13 billion.
After decades of enforcing a “one child” policy on couples, the Communist government has succeeded in reducing the birthrate in the world’s most populous nation. But because of this policy, “we expect a very rapid aging of the population in China,” said Yean-Lu Lee, a population expert at the East-West Center in Honolulu.
Experts such as Lee refer to China’s problem as the phenomenon of 4-2-1: four grandparents, supported by two parents, who in turn are supported by just one child. “Abandonment of parents doesn’t happen much in China, but the number of children has decreased so fast, what can they do?” Lee asked.
While the birthrate has dropped precipitously, life expectancy has increased from 39 years in 1950 to 68 in 1990. The declining birthrate and soaring life expectancy add up to a potentially massive problem in the next century, despite China’s current economic boom.
A recent news report noted, for example, that a state-run automobile factory in populous Sichuan province had to use almost all of its income to meet its pension commitments to retirees, who outnumber factory workers.
The problems facing the elderly will be compounded by many of the economic reforms undertaken by China’s Communist rulers. Workers at state enterprises enjoy pensions and free health care in retirement. But the government is closing many loss-producing state enterprises, throwing many senior employees out of work. In addition, these older workers lose pension protection and find it hard to compete for new private-sector jobs.
The government is trying to promote private pension plans that encourage working-age people to save for retirement. But the plans are almost exclusively available in urban areas, leaving many in rural areas unprotected.
Labor Minister Ruan Chongwu spoke recently of a “pressing need to establish a unified pension program that will cover all units in urban areas, as well as one that applies to all kinds of workers, in order to free workers from worrying about their futures, to allow the free flow of labor within a unified market and to create a good external environment for transforming enterprises’ management systems.”
Even for those who are lucky enough to continue receiving pensions in China, the economic boom has produced spiraling inflation, the enemy of anyone on a fixed income. Health costs, in particular, have soared as the country moves toward the private sector, thereby eating up a proportionately larger share of the income of the elderly.
The aging problem is less acute in the relatively poor countries of Asia, which have high birthrates. The Philippines, for example, has seen the percentage of elderly climb only marginally, from 4.3% in 1960 to 5.3% 20 years later, the latest period for which data is available. Vietnam’s elderly population increased one-tenth of 1% in a decade.
But that does not mean that such countries are immune to the problems of a graying population.
Surging health care costs for the elderly have even become a point of discussion in Indonesia, where the population is one of the youngest in Asia with only 6.4% of the population over 60.
“Aging is a phenomenon in Indonesia today because of family planning,” said Samuel Lieberman, a specialist on Indonesia with the World Bank. “We’re seeing a change in the disease burden that the health system has to cope with. More and more deaths are not attributable to childhood illnesses but to older people.” Lieberman said that in 10 to 15 years there will be “striking changes” in the number of diseases of long gestation, such as cancer and heart disease.
“We’re experiencing the first wave of the aging problem,” said Haryono Suyono, Indonesia’s minister of population. “Families are having to face problems they have never experienced before.”
Indonesia is trying to deal with the problem by encouraging families to be the principal providers of support and care. The government is encouraging families to remain together by providing grants to help start small businesses.
“We need to convince people that they need to plan not for today, but for the future,” Suyono said.
The Graying of Asia
Life expectancy is rising and birthrates are falling throughout the region. Life expectancy for women and percentage of the population over 60 in selected countries:
COUNTRY 1950 CURRENT % OVER 60 Brunel 62.10 72.69 4.3 China 42.30 70.90 8.6 Hong Kong 64.90 80.05 11.5 India 38.00 57.90 6.5 Indonesia 38.10 62.00 6.4 Japan 59.61 81.81 17.5 Malaysia 50.00 71.60 5.8 Myanmar 43.00 61.80 6.4 Pakistan 37.60 56.50 6.9 Philippines 47.72 66.10 5.3 Singapore 62.10 76.40 9.1 South Korea 49.00 74.96 6.8 Sri Lanka 55.50 72.50 6.6 Thailand 49.10 68.85 7.3