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Speaking Of Asia

Finding silver bullets for Asia's silver-haired

Even as Asian societies age rapidly, a growing body of research shows that old can be gold

What if you were in your 70s and awoke one morning to find the morning headlines announcing that a key minister had just said the elderly should be encouraged to "hurry up and die"?

Sounds unlikely, sure. Yet, not too long ago, that was precisely what happened in Japan when Finance Minister Taro Aso addressed a council on social security reforms. Mr Aso was not being that hard-hearted. He was merely talking of a situation where, with a quarter of the population of 128 million being in their 60s or older, the nation had no laws regarding assisted suicide or living wills, while having to manage a nation with the worst public debt among advanced countries, partly due to the cost of medical care. This heavy burden was one of the reasons the Abe government decided to start raising the tax on consumption, weakening the growth impetus of an already flailing economy. But there it is. Someone had to pay.

Mr Aso himself would never have to worry, of course, being one of Japan's wealthiest politicians. But for countless others in his nation, life is tougher. Indeed, many are tempted to turn criminal; credible evidence links Japan's wave of shoplifting by elderly people to attempts by this cohort to earn a jail term, which comes with free food, a clean dwelling and most important of all, healthcare.

Thus, according to a Custom Products Research study, it makes perfect sense to steal a 200-yen (S$2.40) sandwich and earn a two-year jail term as a way to break into jail. The cost to the state of hosting the prisoner - 8.4 million yen.

"Hugging one's grandchildren is surely a better option than talking to them through a glass window. If you are in prison, you are supposed to be old when you leave, not when you enter it. Not so in Japan," the Tokyo research house said in a report released in February.

Japan is only the most egregious of examples in a world whose population is growing more slowly while ageing at unprecedented speed. According to the World Bank, the proportion of people in the typical working age - 15 to 64 - peaked in 2012 and is now starting to fall. These trends have been shaped by a steady decline in fertility rates and sharp improvements in life expectancy. Average life expectancy at birth has risen from 47 years in 1950 to 72 years last year, while infant mortality has declined. Rapid improvements in life expectancy are expected in the years to come.


ST ILLUSTRATION: MIEL

So far, aside from Japan, Asian societies have not had to worry too much about this problem. But they soon will, and some are doing so already. That list includes China, whose dependency ratio tilted three years ago, South Korea and even Thailand.

The influential Mr Ruchir Sharma, head of emerging markets and global macroeconomics at Morgan Stanley, has based much of his dire prognostications on China around one issue - its ageing population. The number of China's elderly is growing much faster than in developed countries such as France and the US, he notes. This rapid ageing, plus an unprecedented debt binge, is the reason he doubts China's economy is growing at even 6 per cent, against the claimed 7.4 per cent last year, and projections of 6.5 per cent for the next years. This has implications for the global economy because China accounted for about a third of global growth in the last five years, about twice as much as the US.

Massive demographic shifts are going to change Asia's regional balance in the coming decades.

Recent neuro-scientific research shows that well-performing seniors activate both brain hemispheres when solving tasks whereas young people rely only on the brain hemisphere that processes new information. Older people also use the second hemisphere to extrapolate, based on experience; in other words, they compensate for a decline in one ability by activating a new strength.

ASIA'S DEMOGRAPHIC SHIFT

Mr Peter Ho, the former head of the Singapore Civil Service, pointed out some months ago that in 1980, 42 per cent of the region's population lived in north-east Asia but, by 2050, only 31 per cent would live there. Instead, almost half of Asia will be clustered in South Asia. Meanwhile, whereas one in five of the world today aged 65 and above lives in China, that will be one in four by 2030 and in some cities, such as Shanghai, one in three would be older than 60 by 2020.

"While the Asian Tigers like Japan, South Korea and Singapore benefited greatly from a demographic dividend or youth bulge in the past, demographics are now subtracting from growth," Mr Ho pointed out. "Annual growth will be reduced by about one percentage point in the coming decades. This 'demographic tax' will have important implications for GDP growth, consumer spending and asset prices, judging from Japan's experience."

One major Asian economy hitting a demographic sweet spot is India, which will soon have the largest tertiary-age population in the world. But with more than half a billion people under the age of 25, and a million streaming into the workforce every month, the nation could, as I argue in a forthcoming book, India Rising: Fresh Hope, New Fears, be faced with a huge problem.

Indeed, forget the strategic rivalry with China, or the Maoist menace at home. Providing gainful employment for this aspirational class is the single biggest national security problem it will face, especially as it takes ever larger dollops of capital to create jobs.

Still, history shows that typically, ageing societies have tended to lose their economic vitality. The question then is, in this age of automation and artificial intelligence, whether they can sway with this demographic punch and find ways to turn this issue to some advantage.

In the emerging new economy, the old assumptions of correlating age to productivity may be less salient. Indeed, some skills may actually improve with age (take mine, journalism, for instance). So too those that require a variety of soft skills including an ability to get along with people, conscientiousness and emotional balance.

Hollywood has started sensing this: In last year's release, The Intern, the character Ben Whittaker, played by actor Robert de Niro, brings both sage-like balance and a calm efficiency to his job as he lends stability to the frenetic life of hands-on Internet start-up entrepreneur Jules Ostin, played by actress Anne Hathaway.

The film's tagline captured the theme beautifully: Experience never gets old.

Indeed, notes Mr Johannes Koettl, co-author of a World Bank book Golden Aging: Prospects For Healthy, Active, And Prosperous Aging In Europe And Central Asia, recent neuro-scientific research shows that well-performing seniors activate both brain hemispheres when solving tasks whereas young people rely only on the brain hemisphere that processes new information. Older people also use the second hemisphere to extrapolate, based on experience; in other words, they compensate for a decline in one ability by activating a new strength.

This is what Singapore's Health Minister Gan Kim Yong means when he talks of making the silver years meaningful. The island is on track to be what population experts call a "super aged society" by 2026 - just a decade from now. By then, one in five Singaporeans will be over 65 years of age and the median age would be 45, whereas it was just a shade over 18 at Independence in 1965. This will have a profound impact on Singapore society.

At an East Asia Summit session in Jakarta hosted by the World Economic Forum that I was privileged to moderate, he told the audience that Singapore was trying to shift the mindset.

"Instead of seeing it as a burden on society, we want to see it as something positive," Mr Gan said. "We want to see seniors as something we aspire to. How do we make seniors a good thing to be."

But this island, in many ways, tends to be the exception, the so-called outlier. The worry is that even as some solutions are available - immigration for one - and some more are coming into view, not all of Asia has prepared themselves for this.

The populations of Japan and Germany have the same median age but one has a more dynamic economy than the other, partly because the latter is more open to immigration. Elsewhere, battling everyday worries, most governments have not even taken full cognizance of the issue.

Do not be surprised, therefore, that in times to come the unspoken wish in many societies would be for older folks to "hurry up and die".

A version of this article appeared in the print edition of The Straits Times on April 01, 2016, with the headline 'Finding silver bullets for Asia's silver-haired'. Print Edition | Subscribe