Conference on Shrinking Populations

Many countries in the world are experiencing the demographic shift toward a shrinking population. With rising longevity, declining fertility, and the baby boomers' retirement, societies are aging more rapidly now than they have in the past. This presents a significant economic challenge not only for developed countries, but also for some emerging economies, particularly those in East Asia. Population aging has significant impacts on almost every economic aspect of society. It reduces the labor supply and national savings; raises demands for health, medical, and care-giving services for seniors; and can strain public finances. Because of this, economic adjustments will likely be needed in fields such as public finance and social security systems, fiscal policy, financial market development, and capital and labor mobility.

On 3 June 2008, ADBI held the Public Finance/Social Security System and Intergenerational Issues in De-population Society International Conference, in collaboration with the Policy Research Institute, Japan's Ministry of Finance, and Hitotsubashi University. The conference focused on the impact of shrinking and aging populations on economies' pension systems and related issues. The conference assessed the issues faced by Asian countries such as Japan, People's Republic of China, and Republic of Korea, and European countries such as Germany and Sweden. Resolving social security issues such as pension and medical care, in which one generation depends upon funds from the next, were agreed to be the biggest challenge. The growing social security burden is expected to affect economic vitality and public finance due to its influence on the labor supply and productivity. The participants, who included economic experts, government officials, and academics, discussed the policy challenges of depopulation and exchanged views on appropriate policy responses and suggestions for regional cooperation in Asia and Europe.

The search for an optimum social security system brought about many important policy discussions on how the timing and implementation of macroeconomic policy could adjust to structural changes in society. A variety of issues were discussed, including the participation of older people and women in the labor force (in order to offset the decline in the number of workers) as well as immigration policy adjustments and investment in technological innovation (in order to stimulate labor productivity and provide medical care in the future). Finally, there was a comment that current global problems like the recent food crises and environmental issues should be considered to address depopulation in societies.

Recent Brown Bag Lunches

Thanong Bidaya, visiting research fellow and former finance minister of Thailand, presented his paper, “Thailand's Crisis, Recovery and Restructuring: A Policy Perspective,” at an ADBI brown bag lunch seminar. He pointed out that financial restructuring efforts alone were not sufficient to recover economic growth but that parallel efforts in economic restructuring through appropriate institutional changes were key engines for balanced and sustainable growth after the 1997 financial crisis. Other presenters in brown bag lunch seminars have covered topics from trade and logistics to regional financial integration and cooperation (see Table). Brown Bag Lunch Seminars, June–August 2008