Throughout Eastern and Southern Asia, countries are experiencing a drastic shift in demographics, which will place a greater strain on nation’s governments and social programs. A new report by the International Monetary Fund (IMF) found that countries who have a large elderly population will see GDP growth stagger by roughly 1% over the next three decades.
The countries most at risk are China, South Korea, Thailand and Japan, which saw its population shrink by a record 308,000 people in 2016. Those unable to work place a massive burden on one’s nationwide pension, health services and welfare costs.
So what can be done to limit economic stagnation due to aging populations? The IMF told governments to pursue flexible labor market reforms that encourage foreign workers, something the U.S. refuses to do. They also suggested to craft policy that raises the female participation rate in the workforce, and expand child-care facilities to help mitigate the adverse effects of aging. With the birth rate slowly declining, Asian policy makers need to strongly contemplate how they will tackle the effect of an aging population.
Source: The Diplomat