Number of people over 65 to double by 2043

Citing data from the United Nations (UN), Japan's Nikkei newspaper said that the Southeast Asian region (ASEAN) is aging rapidly. The proportion of people of working age is expected to reverse the upward trend this year.

What is worrying is that people in Southeast Asia are aging rapidly but the social security system is weak, the rate of pensioners is very low compared to developed countries.

Southeast Asia’s labor shortages are structural and therefore likely to persist. The UN estimates that the working-age population in 11 countries in the region will peak at 68% in 2023. The rate peaked much earlier in Thailand, in 2013, and in Vietnam in 2014. In Indonesia, Southeast Asia’s most populous country and the world’s fourth-largest (270 million), the rate is expected to peak in 2030.

Despite the early retirement age, only a quarter of the working-age population (aged 15 to 64) will receive a pension. With demographics increasingly depleted, many countries are under pressure to strengthen their social safety nets to ensure the well-being of their elderly.

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Southeast Asians are aging rapidly.

The proportion of people aged 65 and over in Southeast Asia exceeded 7% in 2019, the threshold for an “aging society”. This figure is expected to reach 14% by 2043, placing the region in the group of elderly populations.

In Indonesia and Vietnam, less than 30% of the working-age population is covered by pensions, according to the Organization for Economic Cooperation and Development (OECD). Even in Singapore, the rate is below 60%, well below the OECD average of 87%. In addition, many countries in Southeast Asia have early retirement ages—55 for the average worker in Thailand and Malaysia, for example. Pension coverage in Thailand and the Philippines is also around 40%.

In addition, many warn of a shortage of low-income workers in urban areas around the world, including major cities in Vietnam and Indonesia, in the coming decade.

This is not a far-fetched prediction. At the beginning of the year, according to the forecast of the Center for Human Resources Demand Forecasting and Labor Market Information of Ho Chi Minh City, the largest city in Vietnam will lack about 320,000 workers in the new year 2024.

A shrinking workforce is likely to have a negative impact on economic activity.

With the rapidly aging population, in the next 10-20 years, the shortage of human resources will be a big problem for the Vietnamese economy. At that time, the elderly with low income may have to continue working in low-paid jobs such as waiters, cleaners... as has happened in some countries.

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Low pension rate.

Opportunities in new jobs?

Previously, according to the Economist , in 2018, people over 60 years old in Vietnam accounted for 12% of the population. This number is forecast to increase to 21% by 2040. This is one of the fastest increases in the world.

There are many reasons, but one is that life expectancy has increased from 60 years in the 1970s to around 73 years today. The birth rate has dropped from 7 children per woman to less than 2 children per woman today.

Population aging is a phenomenon that occurs in many countries. However, the difference is that it occurred when Vietnam was still poor.

In South Korea and Japan, when the proportion of the working-age population peaked, GDP per capita reached around $32,000. In China, the figure was over $9,500. In Vietnam, when the proportion of the working-age population peaked in 2014, GDP per capita was just over $2,000.

Currently, the Government provides support for the elderly, but only applies to those aged 80 and over, and is considering lowering the age of receiving social pension benefits to 75 for those who do not have a pension or social insurance benefits. The subsidy level is also proposed to be raised to 500,000 VND per month from the state budget instead of 360,000 VND as currently, and a free health insurance card is provided.

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Vietnam is the country with the highest number of high-speed Internet users and mobile phone users in the world. Illustration photo: Nam Khanh

In rural areas, the elderly are more likely to not have a pension and are often forced to do manual, heavy work until they are no longer healthy enough.

It can be seen that, with the current trend, in the next 1-2 decades, many elderly people of the 7x and 8x generations will have to continue working to have enough money to cover their living expenses. Many people will have to do manual, heavy work such as waiting tables, helping with housework...

However, in the era of technology 4.0 and digital economy, there may be easier jobs for the elderly. These could be online sales jobs, value-added jobs on social networking platforms...

This is also a trend that many countries are interested in. A few years ago, Thailand established the Ministry of Digital Economy and Society, replacing the Ministry of Information and Communications Technology, to plan, develop and implement activities related to the digital economy.

Vietnam is a country with the highest number of people using high-speed Internet and mobile phones in the world. In recent years, rural people have also known how to apply science and technology to agricultural production and sell products online throughout the country and the world.

Backless and weak, the elderly without pensions struggle to make ends meet. Vietnam is one of the countries with the fastest aging population in the world. It is predicted that by 2066 we will have about 20 million people without pensions, having to support themselves or rely on subsidies from their children and grandchildren.