The juxtaposition of Asia's ageing giants and youthful contenders
As ageing powers grapple with a declining workforce, some turn to immigration as a solution, while youthful nations, like India, face the challenge of creating sufficient jobs for their burgeoning working-age populations
![East Asian countries are grappling with an ageing population and a declining workforce. Photo: Reuters](https://www.tbsnews.net/sites/default/files/styles/big_2/public/images/2023/11/25/east-asian-countries-grapple-with-an-ageing-population-and-a-declining-workforce.jpg)
Asia, known for its dynamic economies and diverse cultures as well as accounting for about 60% of the world population, is undergoing a seismic shift in its demographic landscape at the moment.
The once-manufacturing powerhouses like China, Japan, South Korea and Taiwan are facing unprecedented population ageing.
For that reason, low fertility and rapid population ageing are by far the biggest talking points about Asia's population today, believes Dr Toshiko Kaneda, Technical Director of Demographic Research at the Population Research Bureau (PRB) based in Washington, DC.
In 1990, only five countries in the Asia-Pacific region had fertility at or below replacement level: Japan, South Korea, Taiwan, Singapore and Thailand.
This number then increased significantly in just a little over 20 years. By 2022, 17 countries had replacement or below-replacement fertility. By 2050, nearly all countries in the region are projected to have below-replacement fertility.
Before fertility started declining, it was high in the region; in 1970, all but seven countries had a total fertility rate of five or more children, including Bangladesh with a total fertility rate of 6.9.
By 2022, most of the countries saw their total fertility rate decline by three or more children per woman. So, fertility declined by a large amount in a short amount of time across the Asia Pacific.
"Fertility declines lead to the share of older adults increasing because we have fewer children. This is a direct consequence of fertility decline," Dr Kaneda told The Business Standard.
She attributed the growth in absolute numbers to two primary factors: firstly, larger groups of people who were born during higher past fertility rates are entering older ages, and secondly, mortality has declined, so older adults live longer today.
However, while East and Northeast Asian countries have already started to feel the wrath of population ageing, countries like India (median age 28.7), Indonesia (31.1), Bangladesh (27.9), the Philippines (25.0), and Vietnam (31.9) still boast youthful demographics, forming the majority of the world's population.
As a result, there is an intriguing juxtaposition of ageing giants and youthful contenders emerging in Asia, which is quite justifiably reshaping the economic and social fabric of the continent, according to Poonam Muttreja, Executive Director of Population Foundation of India.
In 1999, Japan became the first major country to surpass a median age of 40. Fast forward to 2023, and Japan still holds the record with a median age of 48.4. "Japan's demographic landscape, marked by an ageing population, underscores the need for policies focusing on healthcare, pension systems and age-friendly infrastructure," Muttreja said.
Japan's neighbours, including China (38.4), South Korea (43.2) and Taiwan (42.3) are not far behind either, signalling a shared challenge of ageing populations, such as staffing militaries, increasing burdens on public finances, and the imperative need for higher productivity from a smaller working-age population.
"China's challenges with a declining population and a skewed sex ratio due to its former one-child policy highlight the long-term implications of stringent population control measures," Muttreja reasoned.
In contrast, earlier this year, India surpassed China to become the world's most populous country, marking a significant milestone in global demographics, according to UN estimates.
With a median age of just 28.7, India is expected to maintain a predominantly youthful population for the next two decades.
However, such a youth bulge poses a double-edged sword for India and other South and Southeast Asian countries, requiring them to create ample employment opportunities for the expanding workforce — a challenge they currently grapple with.
Attracting global investments is also crucial within a narrowing timeframe; otherwise, the demographic dividend risks transforming into a looming unemployment crisis.
"To harness the dividend, investing in education, healthcare, skilling and creating employment opportunities for the youth is essential," Muttreja said.
She further emphasised that South Asia, where significant gender disparities persist in education, employment and health, has a chance to realise a "gender dividend" through the empowerment of women and girls in the workforce.
"Gender equality in education and employment can significantly boost economic growth. A crucial aspect of this is addressing sexual and reproductive health and rights (SRHR) issues, including child marriage, maternal mortality, contraception access, and comprehensive sexuality education," she described.
Meanwhile, a demographic divergence sets the stage for a complex interplay of economic shifts and geopolitical dynamics.
In 2023, South Korea raised the maximum number of visas available to migrant workers from abroad to 110,000, a notable increase from the pre-pandemic count of 51,000 in 2019.
Unlike its neighbour Japan, which attracts skilled workers, South Korea relies on foreign workers predominantly performing unskilled or semiskilled tasks in industries such as manufacturing and agriculture.
At the same time, there is a notable trend emerging in which manufacturing is shifting from ageing powerhouses to youthful nations.
Both Japan and South Korea, renowned for their industrial prowess, are strategically relocating production to countries with younger labour forces.
A compelling example is Vietnam, where over a quarter of the GDP in 2018 was generated by one South Korean giant, Samsung.
The symbiotic relationship extends both ways, with Vietnamese labour contributing to 30% of Samsung's global sales that year.
The ageing powers, however, face substantial challenges.
South Korea, despite its economic ascendancy, anticipates a staggering 35% reduction in its working-age population (20-64 years old) by 2050 based on current fertility rates.
China is closely following suit, expecting reductions of 20.6% by 2050.
Dr Kaneda shared that by mid-2040, there will be more older adults ages 65 and older compared to children and youth under age 15 in Asia Pacific.
Also, by 2050, one in 10 people in the world will be older adults from Asia Pacific, up from one in 50 back in 1970.
Hence, the looming question right now is how to maintain a robust workforce and address the consequences of an ageing population.
"Asian countries don't have nearly as much time as countries in Europe and the Americas have to prepare to meet the needs of the growing older populations unless they start right away," Dr Kaneda said.
One potential solution is immigration, a strategy embraced by some regional states like Australia, New Zealand and Singapore, to counter low birth rates and ageing demographic profiles, resulting in continued population growth.
However, Northeast Asian states, including Japan, South Korea, and Taiwan, have yet to implement immigration programmes on a scale that would significantly impact their ageing populations.
For example, China boasts the smallest (0.1%) international migrant population among major countries globally. This contrasts starkly with the approximately 14% in the United States and 18% in Germany.
Consequently, South and Southeast Asian nations are not reaping substantial benefits by having a significant portion of their population migrate to the Northeast.
That being said, the changing demographics within Asia are fostering interconnectedness among nations. Despite their differences, demographic challenges are bringing states closer together, creating new opportunities for collaboration and competition.
Investments from ageing powers into growing states provide a platform for the latter to benefit from the fierce competition among regional heavyweights.
Taking all these factors into account, the demographic diversity across Asia, from Japan's ageing population to India's youth bulge, offers valuable lessons, reckoned Muttreja.
"Collaborative learning among these nations could foster strategies to effectively manage their unique demographic challenges," she concluded.