Ageing Asia: A New Challenge for the Region (workshop)

Ageing is no longer just the concern of a few high-income countries in Asia. While countries like Japan and Republic of Korea are far advanced in the ageing curve, many of the developing countries in the region will soon follow.

A rapidly aging population can have adverse effects on economic performance and prospects through a decrease in the labor force, and lower saving and investment rates. What will be the impact on Asian economies? How can Asian countries and the region as a whole respond to these challenges?

To address these issues, the Asian Development Bank Institute hosted a half-day workshop on Ageing Asia: A New Challenge for the Region. Speakers at the workshop included Professor David Canning of Harvard, Professor Charles Horioka of Osaka University, Dr. Ralph C. Bryant of the Brookings Institution, and Dr. Masahiro Kawai, Dean of the ADBI. ADB President Haruhiko Kuroda delivered the closing remarks.

The workshop attracted more than 80 participants from government, the academe, private research institutions, and diplomatic missions in Japan. Participants at the workshop debated the domestic and regional implications of ageing in Asia and explored feasible policy responses, particularly in the area of regional cooperation.

A key message that came out of the discussions was the need to adopt critical reform measures before ageing takes its toll, particularly in developing countries. Speakers at the workshop emphasized that the ageing problem was not one of longer life spans and falling fertility rates, but of inappropriate institutions and behaviors. To prevent an “ageing crisis” in developing countries, policymakers need to start refashioning their institutions and policies to influence behavior. “Younger” developing countries also need to adopt policies that will allow them to maximize the demographic dividend and achieve rapid economic growth before ageing sets in.

Apart from emphasizing the need for urgent action, the workshop also underscored the importance of tackling ageing issues at the regional level, as economic interactions are expected to take place among countries that are economically integrated but ageing at different speeds. The workshop described how the domestic effects of ageing could be influenced by cross-border transactions, and explored policy responses that could be taken at the regional level.

Finally, the workshop brought to light areas for future research. These include, among others:

1. Determining the impact of ageing in countries with low income levels;
2. Revisiting conventional assumptions and empirical data on the impact of ageing on private savings, particularly in the case of Japan, where robust corporate sector savings have prevented a decline in private savings;
3. Examining the extent to which Asian countries can continue to rely on family support mechanisms in the face of falling numbers of children and increasing separation of living arrangements with urbanization;
4. Improving current methodologies, particularly general equilibrium models, to analyze the economic impact of heterogeneous demographic transitions.
5. Exploring whether cross-border migration will be more important in the future, and ascertaining what kind of affect this might have on macroeconomic outcomes as well as welfare outcomes, particularly for sending developing countries.