REPUBLIKA.CO.ID, JAKARTA -- The World Bank estimates that Indonesia will have a problem of an aging population with the increasing decline in labor force percentage by 2040.
"Indonesia will not register a negative impact of aging until 2040. The rate of aging in Indonesia has not hit as fast as happens in South Korea and Japan," the Chief Economist of World Bank, Phillip O'Keefe, stated while delivering the Aging Issues Report on East Asia and the Pacific here on Monday.
Philip pointed out that a number of countries in East Asia and the Pacific, including Indonesia, are currently experiencing a very rapid rate of aging.
The countries with high rate of aging in Asia include Japan, Korea, Hong Kong and Singapore. People over 65 years comprised 14 percent of the total population in 2010 in these countries.
The decline in the workforce percentage in South Korea is expected to exceed five percent, while China is estimated to have a decline of 90 million in the working-age population between 2010-2040.
Meanwhile, Indonesia, Malaysia, Mongolia, Thailand and Vietnam are the middle class countries that had an average of six percent of the population as elderly in 2010. It is estimated that the number of elderly will grow up to 24 percent after 2040.
The countries which are "young" include Cambodia, Laos, Myanmar, the Philippines, and Papua New Guinea, as these had an average of four percent of the elderly population in 2010, which may grow to 13 percent after 2060.
O'Keefe explained that Indonesia still enjoys demographic bonus, but it is time to prepare a strategy to face the problem of aging population which has a potential to become a demographic burden.
One strategy could be an improved pension system and health care for the elderly population.
"The biggest risk that the elderly face is fiscal risk. If the system is not changed, people in old age will see a lot of poverty and finally the government must have to allocate a great amount of budget to overcome these problems," O'Keefe cautioned.
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