unlicensed population ageing opportunities and challenges of population ageing for sustainable evelopment in vietnam

Population Ageing: Opportunities and Challenges of Population Ageing for Sustainable Development in Vietnam NGUYEN THI THU HA The University of Danang, University of Economics - nguyenthithuhaktdn@gmail.com Abstract Population ageing is a global issue, which is observed everywhere and affecting all nations and countries worldwide In Vietnam, ageing has become a typical sign in the 21st century with a rapid increasing number and proportion of elderly people in the overall population, and is one kind of inevitable trend with both opportunities and challenges The key is how to seize the opportunities, meet the challenges, respond to ageing of population, and promote sustainable development In other words, major task of countries is not to obstruct or put off this historical progress, but to face up to the reality of ageing of population, to actively explore strategies and countermeasures of ageing of population that adapt to requirements of sustainable development, to maximize the benefits of ageing of population and to minimize the influences The main aims of this paper is to describe the characteristics of population ageing in Vietnam, to provide a review of opportunities and challenges of population ageing that pose to sustainable development, and then to bring forward countermeasures from four important aspects: population policy, retirement pension system, developing human resources of the old, and accelerating society economy development in order to respond to ageing of population as well as to realize sustainable development in Vietnam Keywords: challenge; opportunity; population ageing; suggestion; sustainable development; Vietnam Introduction In recent years, population ageing has been recognized as an emerging social challenge in many parts of the world Some clear evidences of population ageing are observed, for example, the share of the aged 60+ population in the world increased from 8% in 1950 to 12% in 2014, and it is predicted to be 21% by 2050 (United Nations, 2009) The world life expectancy also increased from 47 years in 1950 to 70 years in 2014, and a further increase to 75 years is expected by 2050 (United Nations, 2014a) However, only a few decades ago, the major concern regarding world demography was its rapid growth and in one hand, increasing pressure on sustainable economic growth due to the possible shrinkage of the labor force and social security systems to support the elderly, such as pension plans, healthcare schemes and long-term care insurance (MacKellar, 2000) On the other hand, population ageing also brings opportunities, for instance, a positive economic outlook of the emerging “silver market”, a deep knowledge of the elder (Kohlbacher & Cornelius, 2008) With the increase of life expectancy and the actual size of the older population defining an era of ageing society, in which the increasing proportion of older population will continue in the coming decades, the key emerging questions are what kinds of challenges and opportunities should we expect? Given the expected impacts of population ageing in the coming decades, this paper aims to describe characteristics of population ageing in Vietnam, to provide a review of opportunities and challenges of population ageing that pose to sustainable development, and then bring forward countermeasures from four important aspects: population policy, retirement pension system, developing human resources of the old and accelerating social and economic development to respond to ageing of population as well as to realize sustainable development in Vietnam The characteristics of population ageing in Vietnam Compared with the process of ageing of population in developed countries, ageing of population in Vietnam has its obvious characteristics as follows 2.1 Conversion of ageing is fast and the scale of population of the elderly is huge The annual population survey by General Statistics Office (2011) showed that Vietnam has entered the so-called “ageing phase” since 2011 The increasing rate of ageing population in Vietnam is very fast and will potentially be higher than that in developed countries More specifically, Western countries took a hundred years to complete the demographic transition, Thailand and Japan - the two countries having been considered as the fastest ageing in the region took 22 years and 26 years respectively to transit from an “ageing” to an “aged” phase, while Vietnam only spent 20 years to finish (Thanakwang & Soonthorndhada, 2007; UNFPA, 2011) In addition, according to Vietnam General Statistics Office (2011), the proportion of the elderly at the age of 60-plus in Vietnam was 8.69 % in 2009, increases rapidly to 11.78 % in 2019 and is estimated to 26.10% in 2049 that is much higher than the world ageing figure (21% in 2050) [10] 2.2 Ageing of population is ahead of economic development According to the Vietnam General Statistics Office’s annual report, GDP per capita in Vietnam increased to 2.109 USD in 2015, but this country is also a develping country with a low average income that is just equal to GDP per capita of Malaysia in 1988, of Thailand in 1993, of Indonesia in 2008, of Philippines in 2010 and Korea in 1982 Moreover, although GDP per capital in Vietnam increased to 2109 USD in 2015, it is much lower than the average income level per person in the world (10000 USD) (An Ngoc, 2015) Vietnam now is attacked by the “silver tide” in the situation when its economy is under-developed and its per capital GDP is extremely low, and meanwhile, its total population is swelling, so, without doubt, quite a lot of perplexities are encountered in social and economic development of fostering of ageing population, which poses huge challenges to sustainable development in the future 2.3 Increased rate of seniors in the 70-79 age group and in the oldest group (80+) are faster, but lower than that of elderly people in the lowest (60 - 69) age group According to Vietnam General Statistics Office (2011), the rate of elderly people at the age of 65 and above will increase remarkably from 6.43% in 2009 to 6.49% in 2019 and 19.06% of the total population in 2049, in which, the proportion of the oldest people at the age above 80 will increase most rapidly from 0.93% in 1999 to 1.47% in 2019 and 4.16% in 2049 In the early 21st century, the rate of elderly people in the lowest age group (from 60 to 69) decreased from 4.51% to 4.07%, while the proportion of seniors in the 70 - 79 age group and the oldest (80+) tend to rise more quickly from 2.67% to 3.05% and from 0.93% to 1.47% respectively In the period 2009 to 2049, there will be a huge increase in the rate of all age groups in the population More specifically, the rate of seniors in the 70-79 age group, in the oldest group (80+) and in the 60 – 69 age group in the population rise quickly approximate times from 3.05% to 8.76%, from 1.47% to 4.16% and from 4.07% to 13.18% respectively Moreover, the average annual growth rate of the elderly aged from 60 to 69 is 1.03% that is equal to the average annual growth rate of the elderly in the 70 - 79 age group, but is little lower than the average annual growth rate of the oldest - old people (1.04%) in Vietnam in the period 2009 – 2049 Co-existence of opportunities and challenges brought by ageing of population Sustainable development means sustainable and healthy development of the whole human society on the basis of mutual coordination and common development of population, society, economy, resources and environment and under the guarantee of resources and with a benign environment Its purpose is not only to satisfy demands of contemporary population, but also not to pose threats to development of later generations Sustainable development is centered with human being and regards the overall development of human being or the society as its target of development Thus, a good population environment is required in order to implement the strategy of sustainable development A good population environment will promote coordinated development and sustainable development of population and economy, society, environment and resources (Li, 2015) The rapidly increasing population of the elderly brings opportunities to the sustainable development of social economy, but at the same time, it will put forward challenges to the national situation in Vietnam 3.1 Ageing of population brings opportunities for sustainable development 3.1.1 Ageing population provides talent resources with high quality and low cost for sustainable development Human resources of the elderly, especially talent resources, have high value and advantages Advantages of talent resources of the elderly are mainly reflected in two aspects On the one hand, they have incomparable experiences and skills and accumulated cultural tradition In order to realize sustainable development, a society has to inherit the excellent achievements of its traditional culture, and carry forward and innovate these achievements The group of the elderly is the bond and bridge that serves as a link between the past and the future and as a connecting link between the preceding and the following, and is an important support and guarantee of sustainable development of the society On the other hand, a group of healthy old people with knowledge and skills is precious wealth of the entire society The earlier a society is able to realize this, the more possible it is for them to acquire advantages brought about by ageing of population 3.1.2 Ageing population generates senior consumption market In the process of ageing of population, not only the ratio of consumption of the elderly to the total consumption amount of the society is increasing, but also the particularity of demand of the elderly causes the consumption structure of the whole society to change The senior consumption market of the elderly in Vietnam is one that contains huge potential and emerges with changes of the age structure of population Although this market has already been started, it is still at an initial stage, and many of its fields are still blank or are under-developed In addition, during the post period of ageing of population, namely, the stage of ageing, demand of the society on the tertiary industry will exhibit an obvious tendency of increase and the market about medical care and life service of the elderly will also be greatly developed 3.1.3 Ageing population is the shock absorber of social stability After ageing population suffers from frustrations and vicissitudes of life; their state of mind and feelings become more moderate, and their way to look upon an issue and deal with an issue will become more objective and rational Compared with young people, they are less impulsive and are less rebellious Furthermore, they tend to influence and educate with their own actions the young generation who are more impulsive and are more rebellious, so as to enable the whole society to become more harmonious, coordinated and stable, and a harmonious, coordinated and stable society is, without doubt, the foundation of sustainable development 3.2 Ageing of population poses challenges to sustainable development Ageing of population not only brings opportunities for sustainable development, but also puts forward new challenges to sustainable development of the society In fact, human resource of the elderly is also neutral, which is a kind of wealth if employed in a correct way and is a kind of burden if employed in an incorrect way According to Bloom et al (2011), as numerous profound impacts of population ageing are anticipated, the author divides the expected challenges into following ways (Bloom et al., 2011): 3.2.1 Ageing of population will finally cause insufficient labor force and ageing of working age and will affect improvement of labor productivity It is believed that physical strength of elderly labor force falls gradually into a decline, and the elderly cannot react as fast as the young, unable to adapt to production activities with a fast rhythm Especially in labor-intensive production, the elderly labor force is unfavorable for improvement of labor productivity and its influences on industries with relatively low automation level and high labor intensity are relatively obvious The major industry in developed countries is technology intensive industry, and its improvement of labor productivity mainly depends on science and technology, so unfavorable influence of working-age population ageing is relatively small However, Vietnam belongs to a developing country, in which most industries are labor-intensive industries with physical strength as the major subject As a result of differences of different labor force ages in terms of physical strength, energy and adaptability, the supply structure of labor force and changes of quantity are unfavorable for improvement of labor productivity to a certain extent 3.2.2 Ageing of population affects older people in terms of physical and psychological aspects Another challenge of population ageing is how to ensure the fulfillment of living conditions for older individuals Earlier studies suggest that older people have higher health risks, for instance, chronic diseases (Adams et al., 2012) In addition, older people are also exposed to greater risks by being trapped in a state of social exclusion or relative poverty (Killeen, 1998) In terms of the psychological conditions of older people, loneliness and social isolation are two important concepts that enable better understanding of the state of older people in a society Loneliness is a subjective notion and describes the state of individuals experiencing the loss or absence of an intimate or needed relationship (Killeen, 1998; Walton et al., 1991) In contrast, social isolation is an objective notion that describes the actual degree of connectedness to other individuals or social groups The condition of being socially isolated is explained as “the objective state of having minimal contact with other people” (Wenger et al., 1996) People with a higher degree of loneliness tend to be males at the low income level or those who infrequently communicate with their children or other family members, or those who provide home care for their spouse or relatives (Drennan et al., 2008), while poor physical health, low morale and experiencing difficulties in communication and mobility are considered as the causes of social isolation (Findlay, 2003) As individuals go through different stages of life, they experience various patterns of losing social relationships that they have built For example, retirement is a representative occasion of losing connections that can increase one’s vulnerability not only in financial terms, but also in social relationships Deaths of partners, friends, and family members are also symbolic moments that may become a trigger for a greater degree of social isolation Furthermore, gender appears as the second trigger for social isolation In fact, older women tend to be subjected to discrimination in employment, access to daily needs, ownership of property and even participation in leisure activities In addition, in developing countries, older women tend to have lower educational levels and economic independence; hence, they tend to be economically dependent on either their husbands or relatives (Cornman, 1996) One major challenge regarding loneliness and social isolation of older people exists in the social perception towards older people General perceptions of the elderly often have negative connotations, and they set a strong assumption that “older people are inevitably dependent and a burden on society” (Beard, 2011) 3.2.3 Increase of the total number of retired people and expenditure of retirement pension will influence expanded reproduction At the national level, population ageing is often framed as an imminent issue for social welfare systems, which are based on the balance between older population who receives services and younger population who supports the system’s operation Additionally, since public insurance for medical and geriatric services is covered almost universally in developed countries and older-old persons have a higher risk of suffering from chronic diseases and developing disabilities (Anderson & Peter, 2000), there will be considerable pressure on welfare budgetary schemes In the context of developing countries, where social welfare schemes are not yet well established, the main challenge is to respond adequately to the escalating medical and other needs of the elderly Moreover, the difficulty in constructing care facilities fast enough to catch up with the growing ageing population and the relatively expensive medical costs for low and middle-income people in Vietnam, it will be important to train geriatric care workers, to prepare a policy to cover uninsured and underinsured elderly and to build a strategy to cope with the expected increase of elderly with disabilities Besides, according to “Vietnam 2035 Report" by the World Bank and Vietnam Ministry of Planning and Investment, Vietnamese spending in health is large in relation to GDP - about 6% that is higher than most of the developing countries in Asia Expenditure of the country on retirement pension grows too fast and its proportion in GDP increases, which is unfavorable for expanded reproduction and sustainable development of social economy (World Bank, & Ministry of Planning and Investment of Vietnam, 2016) 3.2.4 Ageing of population is unfavorable for social stability As a result of decreased tolerance of physical activities and degenerated intelligence of the elderly population, it is necessary that their ability of self-support will reduce and their independence upon others will be aggravated, and they will become a weak group of the society For the time being, the social security system is still not perfect, and the economic self-support ability of the elderly is not enough Especially, rural elderly people almost totally depend on their children, which will increase the economic burden of the family Increase of the population of the elderly will bring about direct or indirect influence upon the family economic income and the family consumption level and will generate contradictions between generations If the relationship between generations is not well handled, it might affect the stability of the society Harmony of the society is first of all, harmony of people Only if the elderly is harmonious and the family is harmonious, the society can be stable and then such a society can be created in which generations are harmonious, there is no distinction of ages, all people share everything, and the society can be sustainably developed Suggestions to respond to ageing of population and realize sustainable development Through analysis, it can be seen, ageing of population is a necessary trend, both with opportunities and challenges Our major task is not to obstruct or put off this historical progress, but to face up to the reality of ageing of population, to actively explore strategies and countermeasures of ageing of population that adapt to requirements of sustainable development, to maximize the benefits of ageing of population and to minimize the influences 4.1 The country should formulate a population policy that cannot only control growth of population, but can also prevent excessive ageing population to realize coordinated development of ageing of population and economy At present, the huge population in Vietnam has become a heavy burden of economic development Thus, Vietnam has to carefully carry out existing population policy and continue to control growth of population At the same time, under the circumstance when the total fertility rate reduces, in which the urban fertility rate rapidly declines while the rural fertility rate increases, Vietnam should appropriately increase the urban fertility rate to encourage the couples in urban area to give birth to two children while using policies to reduce the rural fertility rate This way cannot only control growth of population through maintaining the replacement fertility rate (2 children per woman) but also prevent too fast ageing speed and reduce the feeding coefficient of the elderly that is favorable for coordinated development of ageing and economy 4.2 The country should establish and make perfect the old-age security system in which the progress of ageing of population fits with the level of economic development It is a primary issue to be resolved in the process of ageing to guarantee providing for the elderly In order to adapt to the progress of ageing of population and demand of social and economic development, we ought to establish a multi-level old-age security system that takes into consideration of both fairness and efficiency, has multiple channels of resources of funds, and has a combination of social old-age support, family old-age support and community old-age help service with a distinction between urban and rural areas The country should accelerate reform of social endowment insurance system and enlarge the coverage of endowment insurance, improve the socialized degree of endowment insurance and realize overall social planning of endowment insurance, expand resources of old-age insurance pension, set up a mechanism in which retired people can share achievements of economic development, change the collection means of old-age insurance pension and transfer from the model of pay-as-you-go to the model of partial accumulation, accumulate more insurance pension as accumulated funds and make preparations for the radical growth of retirement pension in the peak period of ageing population in the 21st Century This cannot only guarantee the economic life of the elderly in a short period, but can also alleviate pressure in the future 4.3 The country should develop and employ human resource of the elderly and transform ageing of population as a pressure to a motive An important measure to face up to challenges of ageing is to develop and employ human resource of the elderly and let more old people with labor capacity participate in social and economic development Firstly, this can make up for deficiency of labor force Secondly, this can create more wealth for the country Thirdly, this can change part of consumption population to production population and change the pressure of ageing of population to a motive that promotes economic and social development The specific measures are as follows First, the country should gradually increase age of retirement Under the attack of an increase of ageing in many countries in the world, retirement has become a new globally difficult problem Suffered from deficit and the crisis of ageing, a number of countries in the world are moving back the age of retirement to reduce the pressure of deficit and lessen attack of ageing on economic development Since 2010, it has become a unanimous choice of many countries (especially developed countries) to extend age of retirement For instance, Germany has increased the age of retirement to 67 in order to cut down on release of retirement pension and reduce pressure of the financial expenditure of the government The age of retirement that is being used at present in Vietnam was confirmed according to the productivity level and the per capita life expectancy in the 90s in the 20th century Over twenty years, the social productivity level in Vietnam has been greatly improved and life expectancy has been extended to 70 Thus, increase of the upper limit of the working age at an appropriate time can effectively develop and employ labor resources and make the higher rate of working age population as well as the lower rate of dependent population that are favorable for economic development Second, the country should encourage re-employment among younger elderly people Re-employment of younger elderly people means that the elderly people with good physical condition, working aspiration, and working ability at the age of 60 to 69 come back to a working position after their retirement Thus, we can conduct continuous education and vocational training on younger elderly people, improve their scientific and technical level and their ability to adapt to development of skills, select appropriate working positions to continue to offer service for the society, alleviate economic pressure of the family and the society, and maintain normal running of social life Third, we support healthy ageing Healthy ageing means that most of the elderly are in good health and have a long life, which is not only reflected as extension of longevity, but more importantly as improvement of the quality of life This can not only promote development of employment of talent resources of the elderly, but can also reduce expenditure of medical care and reduce financial pressure of the nation 4.4 The country ought to accelerate social and economic development and improve endurance to ageing of population The issue of ageing is to satisfy both particular demand of the elderly and the social and economic development brought about by ageing of population Vietnam now is in the situation when the economy was under-developed and has entered the stage of ageing The objective fact that the ageing of population is ahead of economic development needs acceleration of social and economic development so as to strengthen endurance on ageing of population Thus, before coming the peak period of population ageing, Vietnam should make full use of the “golden period” of population age structure, and vigorously develop economy to lay a material foundation to adapt to the rapid development of ageing and for the forthcoming of ageing society Especially, Vietnam should regard ageing industry as an important point of increase in the economic development of the ageing society, expand domestic demand, drive consumption, alleviate the employment pressure of the society, and promote economic prosperity Conclusion Ageing of population is the objective rule of human social development and is the necessary outcome of social and economic development The rapidly increasing population of the elderly in Vietnam brings both opportunities and challenges to the sustainable development of social economy This country ought to take positive responsive measures to alleviate unfavorable influences of ageing of population upon economic and social development and create more favorable population environment for implementation of the strategy of sustainable development References Adams, V., Sharon, R K., Taslim, V H., & Sandra, M (2012) Ageing disaster: Mortality, vulnerability, and long-term recovery among katrina survivors NIH Public Access, 30, 1-17 An Ngoc (2015) Vietnam’s GDP per capital fall short of Singapore and Malaysia (in Vietnamese) Retrieved July 21, 2016 from 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(1.04%) in Vietnam in the period 2009 – 2049 Co-existence of opportunities and challenges brought by ageing of population Sustainable development means sustainable and healthy development of the... process of ageing of population in developed countries, ageing of population in Vietnam has its obvious characteristics as follows 2.1 Conversion of ageing is fast and the scale of population of the