With advancements in technology, mankind now has ways to extend life beyond that which nature allows. This has led to the increase in the average lifespan, and even the option to artificially keep a person alive. This will obviously have a major impact on the global economy.

It’s usually considered a good thing when a person lives longer. After all, they’re able to spend more time with their family. But from an economic perspective, it’s a headache to accommodate senior citizens while deciding whether to increase public spending on healthcare.

Throughout much of East Asia and ASEAN, an aging population is putting pressure on entire governments and economies.

To take countermeasures, an understanding of the factors which contribute to an aging population must be understood. These include not only better standards of living, but also low fertility rates.

Each individual country has their own unique obstacles as well. In China, the one child policy led to a steep fall in fertility rates. Even though the policy was lifted, an economist at Moody’s Analytics said that it’s extremely difficult to reverse fertility rates once they fall to a certain level. China’s fertility rate is now the lowest in the world, which will impact its future growth prospects.

Some countries, on the other hand, have realized the problem and have taken appropriate measures. Singapore has similarly low fertility rates, but pro-immigration policies have kept the city state’s population growth healthy.

The Singaporean government has even launched an online dating portal aimed at helping working professionals find love and marriage, eventually leading to higher birth rates. The country’s Social Development Network has personals on their website and holds matchmaking events for singles.


World Bank Isn’t Optimistic About Global Economy

A report from the World Bank released at the end of 2015 warns an aging population will pose many risks. Korea, Thailand, China, and most notably Japan, are on the path to losing as much as 15% of their working-age population by 2040.

Much is at stake here. Asia’s elderly population will demand higher public spending. Pension spending in Asia will increase by at least 20% by 2070 without reform.

The regional vice president of the World Bank’s East Asia and Pacific Region, Axel van Trotsenburg, suggested that policy makers “consider comprehensive, proactive policies that will increase labor force participation, encourage healthy behaviors, boost productivity, reform social security, and ensure that public services are affordable.”

Governments aren’t just the ones feeling the pressure. Private companies will also be greatly impacted.

Julio Portalatin, the CEO of Mercer, spoke out and shared his thoughts on the subject. Governments would have to extend benefits for older workers in a “fiscally responsible” manner, according to Portalatin.

His suggestions include raising the retirement age so that an aging population does not affect the workforce too much. Other options include encouraging more women to join the workforce.

Another one of Portalatin’s recommendations is to set aside a portion of employees’ salaries as savings. Workers could opt out if they wish. With a plan like this, employees would have more awareness about their pension plans. This could lead to a higher percentage of salaries kept as savings.

An aging population is truly a worrisome ordeal. This is especially the case in East Asian countries where fertility rates are shrinking too. Governments and the private sector must work together to maintain their workforce.

With that said, there’s still ways to invest and profit from an aging global population.

About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He’s an accomplished stock trader and property investor in Thailand, Cambodia, and many other places. He’s been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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