Empower the elderly

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Empower the elderly

Perry Wong, Amos Garcia
Perry Wong is managing director of research and Amos Garcia is research associate at the Milken Institute, a nonprofit economic think tank.

As Asia strives toward the “Asian Century,” we are seeing another rapid rise, the likes of which we have never seen before in both pace and magnitude.

By mid-century, the number of older adults in Asia will reach near 1 billion and will make up 60 percent of the global aging cohort. Asia’s population is aging at a much earlier stage of economic development, meaning that the region’s emerging economies are getting old before getting rich.

When Japan and Korea’s elderly population reached 7 percent of the total, the point at which a country is considered to be “aging,” income per capital was $18,000 and $14,000 respectively. In comparison, China’s per capita income was only $1,700.
This unprecedented demographic shift could pump the brakes on the region’s continued rise.

Aging at a much earlier stage of economic development makes it more challenging for an economy to move up to higher-value industries, leaving less savings for retirees and less revenue for pensions and investment.

On the face of it, Korea has avoided these issues. For while a glance across the region shows us Asia is not ready for its growing elderly populations, Korea has a stable (if young) national pension scheme and universal health care. But eligibility depends on contribution, which in turns depends on formal sector employment, leaving large coverage gaps among those who need it most.

For too long, the elderly have been seen as a burden to institutions, to communities and to families. This has to change.
Moving toward successful aging will require both the government and the private sector to champion new strategies and reset their outdated attitudes.

While building tangible infrastructure, such as housing and health care, is important, governments rarely focus on the hurdles to promoting greater engagement with older populations to unlock their economic and social value.

However, the region has centuries of traditional values it can leverage to provide the foundation on which the elderly can remain active and productive in society. In cultures across Asia, elderly members of society derive a deep sense of self-worth and purpose through their social interactions. Meanwhile, adult children still desire to fulfill their filial duties to their parents.

Families provide the immediate source of old-age support. For generations, a typical household contained multiple generations living under a single roof, a practice that provided aging adults with financial, social and long-term care support. However, a balance must be struck to ensure that adult children are not overburdened by the needs of their aging parents.

In this way, housing policies can become a tool to leverage value in family interactions. Singapore, for example, offers incentives for married couples and parents to live closer to one another. But providing low-cost housing for the elderly is a low priority for the government, which must focus on improving relations with North Korea, boosting the country’s low fertility rate and lowering its highest unemployment rate since 2010.

Communities provide the network of health care services, information and other resources the aging cohort will need to both remain healthy and productive. More than just providing services, robust health care environments must align with cultural values. For example, institutional care remains a less preferred option for long-term care maintenance among Asia’s older adults who would rather age at home and in their communities.

For cities looking to build enabling aging environments, policy design and implementation must consider the cultural desires of the elderly to interact, participate and engage in society.

Finally, being in the workplace and having meaningful employment fulfills the cultural desire to remain relevant and productive, while also providing the active lifestyle that improves health outcomes. It is essential that the government champion continued participation and reduce labor market rigidities, such as mandatory retirement ages, that have for too long excluded older workers. At the same time, businesses must recognize the value in advocating, institutionalizing and enabling greater opportunities for their older workers.

Instead of being a big burden, Korea’s growing aging population has to be seen as a big opportunity — one billion active, healthy and engaged individuals with tremendous value — given the right infrastructure and institutional framework.

If Korea is to avoid stalling, private and public institutions will need to proactively empower the elderly to remain healthy, active and vibrant. If Asia is to continue to rise, tomorrow’s older cohorts will be the driving force behind growth and progress.
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