Ethos Issue 1, October 2006

Ageing and Public Policy - A Global Perspective
Andrew Kwok

Is there an impending ageing crisis? Two views predominate in the global discourse.

The first warns of looming disaster — a shrinking labour force, unsustainable pension, and healthcare subsidies increasing the fiscal strain and destabilising the economy. Here, demographic upheaval foreshadows an inevitable economic decline, if not total collapse.¹ Those who disagree consider this analysis too Malthusian: it overlooks increases in productivity, and the reduced fiscal burden of households with fewer children to support. These pundits see demographic change as a gradual transition and not an imminent crisis.²

Neither fatalism nor nonchalance is likely to help much in informing public policy. How ageing affects a society will vary; the individual conditions of each country decide if a crisis will set in. The Japanese economy remains intact, even as one in five citizens are now aged 65 and above. In contrast, scores of nations with much younger populations are struggling.

Japan’s case suggests that an ageing society can still thrive. On the other hand, what could be disconcerting for Singapore is its exceedingly rapid pace of ageing. Its over-65 population is projected to grow by 372% from 2000 to 2030 – faster than in noted ageing countries Japan (54%), Germany (63%) and China (170%).³ In 2005, one out of every 12 Singaporeans was aged 65 or above. By 2030, they will number one in five.⁴ Post-war baby boomers lead this surge, with the first cohorts hitting 65 years of age as early as 2012, and setting off an exodus from the workforce. By 2050, 38% of Singaporeans will be 60 years or older.⁵

These dramatic changes mean policies cannot continue as before. Existing fiscal systems, retirement and healthcare provisions, structured in the context of a younger population and a growing economy, may no longer be suited to meet the needs of a rapidly ageing society.

Singapore could level up quickly by adapting the successful strategies of governments who already support a significant aged population. The latitude of policy response, however, does vary with the context of each country.

Augmenting Population
In 2005, Japan’s population declined for the first time since 1945. The proportion of persons aged over 65 rose to 21%; it is estimated to rise further to 35.7% by 2050. Its Total Fertility Rate (TFR) has fallen to a record low of 1.25. Despite this, Japan remains focused on raising TFR and is reluctant to open its borders to immigrants, for fear of their impact on its homogeneous society. Foreign residents account for only about 1.2% of Japan’s population as at end 2005.^{6 7}

Singapore, in contrast, has augmented its population through both immigration and pro-natal policies. Today, non-residents constitute around 20% of the total population⁸ and make important contributions in various industries. However, this approach has its trade-offs – competition for jobs and other opportunities will inevitably create some foreigner-local tensions. A successful immigration policy also needs to go beyond attracting foreigners to live and work in Singapore; immigrants must integrate well into the society, and foster emotional ties with the country. The 2005 French riots, fuelled by the discontent of its immigrant enclaves, attest to how easily social fragmentation can take place within a few short years.

Policies intended to raise fertility have proven to be complex and controversial. Yet Singapore is not the only country with an explicit population policy. France has a long-standing, conspicuous and active family policy. French politicians have gone so far as to appeal to nationalistic sentiments, talking of demography as a “source of vitality”.⁹ In Australia, parents were urged to “have one (baby) for mum, one for dad, and one for country”.¹⁰

Nordic states, on the other hand, take a more subtle approach. Through quality childcare services and generous parental leave, their policies focus on building favourable conditions for people to have children, without pitching the objective of population growth. Germany, France and Belgium target families as the focus of benefits, while resources targeted at children are proving to be popular in Sweden.¹¹ Scholars have also called for the expansion of assisted reproductive technologies such as in vitro fertilisation, which accounted for some 4.2% of total live births in 2002 in Denmark.¹²

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