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An aging Asia:
Demographic challenges
for government and business sectors in 2050
Within the next 50 years or so, the world will face a dramatic transformation as
the main profile of the population shifted from younger profile to older one, particularly in Asia. The demographic
forecast that the world population will age very dramatically will bring about far reaching ramifications.
In CSIS seminar titled: ‘Asia's population over the next 50 years: Implications for business and government’ in
August 8, 2003, Dr Clive Edwards, Associate Professor in the School of Business, University of Queensland, explores
the main demographic changes that would occur in Southeast Asian countries over the next 50 years. Present as discussants
were Dr Mayling Oey-Gardiner, President Director, PT Insan Hitawasana Sejahtera, and Dr Djisman S. Simandjuntak,
Executive Director, Prasetiya Mulya Business School. The seminar was moderated by Mr Arya B. Gaduh, researcher
in Department of Economics, CSIS.
World Population Development to 2050
In the overall assessment of world population development, there will be continued substantial population growth
and a major age structure change. Between 2000 and 2050, the world’s population rises from 6.1 billion to 9.6 billion,
an increase of 57%. Over this 50 years, the population of Europe, North America, Japan rises just 7%, from 1.3
billion to 1.4 billion. Thus most of the rise in the world’s population that occurs between 2000 and 2050 occurs
in the developing countries of the world: Asia, South America and Africa.
Asia’s population rises from 3.7 billion to 5.6 billion, an increase of 52%. South America’s population rises from
0.5 billion to 0.8 billion, an increase of 57%. Africa’s population over this period is projected to rise by a
massive 143%, from 0.8 billion to 2.0 billion (the impact of AIDS is addressed in the recently released [2003]
UN World Population Projection report).
Until now, the world’s population has always been ‘young’, with 44% of the world’s population being at the ages
0-19 years and less than 5% at ages 65+. That changes according to the 2050 forecast where those ages 0-19 is 24%
and those ages 65+ 15%.
Age Structure Change in Southeast Asia
One of the main proposition of Dr Edwards’ presentation is that we are facing significant aging of the population
throughout most of th ecountries in SEA region including Indonesia. The region’s population rises from 452.0 million
in 2000 to 717.2 million in 2050, an increase of 265.2 million, or 59%.
Numbers at ages 0-34 rise just 9%, from 311 million to 339 million. Those aged 35+ rises from 141 million in 2000
to 378 million in 2050. Numbers at ages 35-64 rise from 120.7 million in 2000 to 269.2 million in 2050, an increase
of 123%. Numbers at ages 65+ rise from 20.1 million in 2000 to 108.7 million in 2050, an increase of 440% in just
50 years.
Reliability of Demographic Forecast
The reliability of demographic forecast was also discussed by the speaker and both discussants. Although relatively
more reliable than economic or political forecasts, the floor maintains that there are factors to be considered.
Dr Mayling highlighted several of these factors. First is the source of information and its reliability. The international
community in this sense often uses the UN statistical data. These data may be different to the ones in each country.
Second is the necessity to establish solid basic assumptions. These basic assumptions include fertility assumptions,
life expectancy assumptions, etc. Third, which was brought into attention by Dr Djisman Simandjuntak, is the possibility
of external shocks, e.g. natural disaster, epidemic, famine, etc.
Opportunities and Challenges for Indonesia
Dr Edwards pointed out several challenges for the Indonesian government. The demographic shift will bring implications
for government spending and government provision of basic services, e.g. education, health. Costs of medical care
for people aged 35+ is considerably greater per individual than that of medical care for children. There are several
opportunities addressed for the private sectors, which involve the private sectors capacity to accommodate such
demographic shift through innovative business ventures.
Dr Djisman also raised the concerns over the ‘caring capacity of the earth’. The imbalance between resources and
population and income will bring about serious consequences to Indonesia. The shifting economic structure will
also raise the issues of income gap, employment, resource allocation, and government spending. On the social front,
the social capital formation through education and good governance.
To face the challenges ahead, education and proper health services have to be on top of the priorities. Indonesian
government and business sector need to be innovative, especially the latter in discovering overall services needs
and older group needs.
Source: CSIS
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