The increase in the number of elderly citizens does not necessarily mean that there will be an aging population. If Singapore wants keep the same 2011 elderly ratio, though, the population would have to increase three-fold by 2030—an increase of 6.5 million citizens in the next nineteen years or an average of roughly 340,000 new citizens a year.
Given Singapore’s 2010 fertility rate of 1.15 births per female, and its current declining trajectory, a three-fold increase in Singapore’s current citizen population seems unlikely. Thus, in 2030, Singapore’s population will be larger and significantly older. It will be larger and older due to two underlying trends:
(1) an increase in life expectancy, brought about by economic growth, advances in technology and medicine, etc, which increases the number of people living at older ages and
(2) a decrease in fertility, due to less children being born, which will increase the burden on the young to care for the old. These intuitive predictions fit nicely with statistical projections. According to estimated projections, by 2030 over 65-year-olds will represent 20% of the population (from 9% currently).
The increased trend of population aging is not new and it is a global phenomenon. However, in Asia, unlike developed countries where population aging is more advanced, the sheer timeframe of population aging is much faster. It is no wonder then that the Singapore Government is actively promoting an increase in fertility rates as well as focusing attention on policies for the elderly.
However Singapore does have some advantages over its overseas counterparts.
Firstly, due to early investments and preparation, Singapore’s new silver generation will mostly be well educated and relatively financially independent.
Secondly, with increased focus on social and wellness programs as well as increased long-term care and integration of care policies from MOH, MCYS, CEL, C3A, and AIC, the elderly in Singapore are also likely to be healthy, better informed about their health, and have compressed morbidity.
These two trends mean that the elderly will not drain as much public and youth resources as they could otherwise have and that the elderly will be in a better position to still contribute and add value to the economy.
Thirdly, unlike many Asian countries, Singapore’s aging will be occurring at a later stage of development and thus will not counter the same restraints that other Asian countries may have in being able to afford a large dependent elderly population or even in being able to have the necessary institutions and financial systems in place. Singapore also has more resources to be able to think and plan carefully about how elderly programs should be structured and managed. For example, Singapore has already invested quite substantially in health care and pharmaceutical industries, which will benefit from an aging population. So will the wealth management industry and any industry in the business of death.
Fourthly, while Singapore is more advanced, its rapid rise puts it at an advantage compared to Western developed nations in that its aging is not as advanced and its welfare programs for the elderly are not as unsustainable or ambitious.
Thus, Singapore is unlike countries such as Indonesia, China, and Thailand, which are more pressed for time and where elderly reform will require more attention and be more costly. Singapore also avoids the sustainability issues that face many Western welfare states.
Fifthly, Singapore can learn best practices from other countries and benefit from lessons learned from programs already implemented elsewhere. The NUS-Tsao Ageing Research Initiative for example, is a network comprised of universities and organizations from 12 Asian countries that aims to share research that can tackle problems and develop policies and programs for the elderly.
Lastly, unlike other Asian countries with strict immigration policies, Singapore has been able to delay the rapid rise of the elderly population by allowing foreign immigration. It is a good way of reducing the dependency ratio, increasing productivity (which in Singapore has hovered around 1% for the last decade), and offsetting the sharp reduction in labor growth due to the aging of the population. Especially for Singapore, because unlike larger countries or countries with rapidly growing populations or economic growth, Singapore, to a larger extent, is dependent on external factors for growth.
According to the Department of Statistics’ Population Trends 2011 for Singapore, citizens (including immigrant citizens) grew by 0.8% or by 26,500 people in 2011. Foreigners increased by 59,100. While large for Singapore’s size, it’s nowhere near the 340,000 citizens needed per year to avoid an aging population (assuming ratio to be kept at 9%). Thus, immigration as a tool to offset aging can merely only delay and not avoid an aging population. Due to rising political costs of public backlash and the sheer size of the country, even its ability as a tool to delay is limited and diminishes with time. Its benefits also in no way outweigh other countries that can deal with aging populations more appropriately (i.e. they are larger, can accommodate greater immigrants, and have domestic populations that are rapidly growing).
Thus, Singapore cannot completely avoid dealing with the effects of an aging population. It is a trend that will continue to grow in the coming years. It also does not have the leeway that countries such as India, the US, and China might have. Given its limitations, Singapore can still institute policies to help avoid the burden of the elderly such as encourage healthy aging and financial sustainability. Singapore is also in a better position to adequately take steps to undertake reforms and the necessary shifts required to prepare for this trend.
What this analysis shows though is that even with careful avoidance and adequate preparation, there is no escaping the fact that the elderly shift will negatively impact long-term economic growth in Singapore, as it has in many countries facing increasing aging populations. In some respects, Singapore may be more hardly hit, but how negative the impact will be will also depend to some extent on adequate avoidance and preparation. The latter two Singapore has the advantage on.
By Melinda Elias
About the Author:
Melinda Elias is a recent graduate of the School of International and Public Affairs (SIPA) of Columbia University. Her interests intersect the areas of health, international affairs, finance, policy, and economics. She is currently also interested in documenting life stories of Singaporeans over the age of 70. To find out more about the latter please visit the following website: Singapore's Over-70s Project.