Asian economies on 'demographic cliff'
Monday, 20 August 2007
Andrew Taylor from London
THE rise in the size of Asia's labour force is expected to slow over the next decade threatening output growth in some of the region's fastest growing economies, according to the International Labour Organisation.
Uneven rates of population growth, ageing workforces, and a huge shift in employment from rural areas to cities pose challenges for the region's rapidly growing economies it says in a report published on Monday.
Asia's workforce is expected to increase by 221m to 2.0bn by 2015 as countries such as Iran, Bhutan, Cambodia and Pakistan continue to benefit from a rise in the proportion of "prime working-age" people, between 25 and 54. But the life of this "demographic dividend" would be limited with the proportion of children aged 0 to 15 and youth aged 15 to 24 declining across the whole of the region.
The ILO warns that more developed regions such as Singapore, South Korea and parts of China are likely to hit the "demographic cliff" even earlier.
"At the end of the decade, there will be a marked increase in the share of the population aged 65 and above in every region, with the largest increases taking place in the developed economies," it says.
More than a quarter of the people in some "developed economies" are expected to be older than 65 by 2015. In China family planning policies had "accelerated the process of demographic transition". As a result, the country was "ageing faster than any other nation in history". In Japan the number of people retiring from the country's workforce since 1999 had exceeded the number of new recruits.
In spite of average annual GDP growth of 6.3 per cent between 2000 and 2006 - more than twice rates experienced in the rest of the world - many people in the region were still suffering from serious poverty. More than 1.0bn people, representing almost 62 per cent of the region's labour force, were still working in the "informal economy". Some 900m were living on less than US$2.0 a day and "308m of these living in extreme poverty on less than US$1.0 per day", says the ILO.
Problems facing employers and politicians include: increasing migration by millions seeking better paid work abroad; the growing movement of people from the land to cities, with the region's urban population expected to grow by 350m by 2015, while the rural population is expected to rise by only 15m; rising income inequalities; and the need to improve job opportunities particularly for women. The need for raw materials and energy to fuel growth was increasing environmental pressures. Juan Somavia, ILO director general, said: "One thing is clear: doing business as usual is not sustainable over the long term. Asia is experiencing unprecedented growth and development. At the same time, vulnerabilities arising from environmental pressures, economic insecurity, shortcomings in governance and unequal income distribution pose a threat to the region's future development."
Under syndication arrangement
with FE
THE rise in the size of Asia's labour force is expected to slow over the next decade threatening output growth in some of the region's fastest growing economies, according to the International Labour Organisation.
Uneven rates of population growth, ageing workforces, and a huge shift in employment from rural areas to cities pose challenges for the region's rapidly growing economies it says in a report published on Monday.
Asia's workforce is expected to increase by 221m to 2.0bn by 2015 as countries such as Iran, Bhutan, Cambodia and Pakistan continue to benefit from a rise in the proportion of "prime working-age" people, between 25 and 54. But the life of this "demographic dividend" would be limited with the proportion of children aged 0 to 15 and youth aged 15 to 24 declining across the whole of the region.
The ILO warns that more developed regions such as Singapore, South Korea and parts of China are likely to hit the "demographic cliff" even earlier.
"At the end of the decade, there will be a marked increase in the share of the population aged 65 and above in every region, with the largest increases taking place in the developed economies," it says.
More than a quarter of the people in some "developed economies" are expected to be older than 65 by 2015. In China family planning policies had "accelerated the process of demographic transition". As a result, the country was "ageing faster than any other nation in history". In Japan the number of people retiring from the country's workforce since 1999 had exceeded the number of new recruits.
In spite of average annual GDP growth of 6.3 per cent between 2000 and 2006 - more than twice rates experienced in the rest of the world - many people in the region were still suffering from serious poverty. More than 1.0bn people, representing almost 62 per cent of the region's labour force, were still working in the "informal economy". Some 900m were living on less than US$2.0 a day and "308m of these living in extreme poverty on less than US$1.0 per day", says the ILO.
Problems facing employers and politicians include: increasing migration by millions seeking better paid work abroad; the growing movement of people from the land to cities, with the region's urban population expected to grow by 350m by 2015, while the rural population is expected to rise by only 15m; rising income inequalities; and the need to improve job opportunities particularly for women. The need for raw materials and energy to fuel growth was increasing environmental pressures. Juan Somavia, ILO director general, said: "One thing is clear: doing business as usual is not sustainable over the long term. Asia is experiencing unprecedented growth and development. At the same time, vulnerabilities arising from environmental pressures, economic insecurity, shortcomings in governance and unequal income distribution pose a threat to the region's future development."
Under syndication arrangement
with FE