This article first appeared in The Edge Malaysia Weekly on January 6, 2020 - January 12, 2020

COME May, it will be two years since the landmark general election that brought Pakatan Harapan to power and three years since Dr Muhammed Abdul Khalid raised a red flag on the need to prepare for an ageing society with the headline-grabbing statement of Malaysians being “old, poor, sick and without children” in 2050 and still having to work.

“Some will do better, but many of us will not. We will get worse. Therefore, you need adjustments in policies for this,” Muhammed was quoted as saying in April 2017, more than a year before he was named economic adviser to the country’s 94-year-old Prime Minister Tun Dr Mahathir Mohamad.

The demographic clock is ticking fast for many developing countries, which are projected to house 80% of the world’s 2.1 billion older people by 2050.

By the end of the coming decade, all baby boomers (born between 1946 and 1964) and the ­Gen-Xers born before 1970 will be at least 60 years old, Malaysia’s current official retirement age.

From about 3.6 million, or 10.3% of the population in Malaysia currently, people above the age of 60 are expected to make up 15.3% of the population, or 5.8 million people, by 2030. By 2040, their numbers will reach 8.2 million, or one-fifth of the population — more than the 7.7 million young ones below the age of 15 expected to be born after the year 2025, according to projections by the Department of Statistics Malaysia (DoSM).

By 2050, there will be 9.65 million people aged 60 and above in Malaysia, or 23.1% of the population, according to the United Nation’s World Population Ageing 2017 report.

In Malaysia, on average, men and women above the age of 65 are expected to live to 80 and 82 respectively, with Chinese women living the longest and Indian men the shortest, official estimates show.

Rising longevity means that issues of sustainability of public pensions and sufficiency of funding for public healthcare and social safety nets will only become increasingly pertinent on the social and public policy agenda. For wage earners in the private sector and gig workers, adequacy of retirement savings is an even bigger concern as real estate prices and cost of living rose during the era of ultra-low global interest rates.

Lessons from greyer nations

The good news is that the more developed parts of the world have been tackling the issue since the turn of the millennium and Malaysia can learn from the successful policy actions taken. Japan is home to the world’s most aged population — 33% of its citizens were aged 60 and above in 2017 and more than 42% will be so by 2050.

Singapore and South Korea are expected to see the largest percentage point changes in the proportion of the population aged 60 and above globally from 2015 to 2030, according to the UN report. More than 2.64 million, or 40.1% of Singapore’s population, are expected to be 60 years and older by 2050. Half of the population in the city state will be above the age of 52.8 by then compared with the median of 40 in 2015. In Malaysia, the median age is expected to rise to 40.2 in 2050 from 30.5 currently.

Even so, the number of aged and retirees that Malaysia will need to prepare for could easily top 10 million by 2050, well exceeding the population in Singapore.

Malaysia’s annual population growth rate is expected to fall to 0.8% by 2040 from 1.4% currently owing to a decrease in fertility as well as net international migration.

Total dependency ratio — the number of those in the young and old age groups dependent on every 100 people of working age — is expected to increase from 44.1 to 47 in 2030, rising further to 49.5 in 2040. The higher dependency ratio comes in tandem with rising longevity and falling fertility rates at a time when more women are pushing back marriage, and thus, childbearing to a later age.

Malaysia’s total fertility rate slipped below the rate of 2.1 a population needs to replace itself in 2016 and currently only 1.8 babies are born to every woman of reproductive age (15-49 years), below the global average of 2.4 babies.

Fewer babies would mean a smaller and older workforce, a smaller base of consumers and fewer young people to pay taxes to fund pensions and facilities for the elderly — all else being equal.

Still, the 206,253 marriages versus 50,356 divorces recorded in 2018 imply roughly one marriage every minute versus one divorce every 10 minutes in Malaysia — giving policymakers a sizeable pool of potential parents to work with. With social isolation and neglect among concerns in an aged society, it is heartening that data from DoSM shows that in 2018, the oldest groom was 92 years old and the oldest bride, 83.

Beyond finding fiscal resources to finance the public pension and healthcare bill as well as widen social safety nets for the vulnerable group faced with physical, mental and financial security challenges, there is also a need to improve accessibility for the elderly and disabled in terms of infrastructure as well as transport.

These include formulating directives on the provision of accessible changing rooms for seniors and adults with disabilities and their helpers, much like how many public buildings and malls have nursing and changing facilities for mothers and babies.

Even though the official retirement age is 60, policymakers have already begun providing opportunities for the elderly to remain in the workforce longer by giving incentives to employers for rehiring — and that is not just to ease the fiscal pressures. Keeping retirees employed, even with unpaid work such as volunteering or in artistic projects, can help improve the psychological and overall well-being of the elderly, experts say. The need to raise awareness on preventive healthcare is also key as maintaining a healthier lifestyle helps keep diseases at bay during one’s old age.

Fiscal constraints mean policymakers will need to work smarter to stretch every resource available to prepare for the demographic challenges ahead. The rising number of people taking to the streets around the world means the powers that be can ill afford to drag their feet.

Cindy Yeap is a senior editor at The Edge

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