After cashing in on 'golden demographics' Vietnam braces for grayer times

By Minh Le, TN News

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A woman wearing traditional conical hat pushes her bicycle past a restaurant. Photo: Reuters A woman wearing traditional conical hat pushes her bicycle past a restaurant. Photo: Reuters

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​Its vibrant populace, in a culture that increasingly reveres youth, sometimes makes people feel Vietnam will never grow old.
For years the country has cashed in on its so-called “golden demographics," in which the number of dependent citizens is much smaller than the labor pool.
This blessing allowed the country some time to rebuild after a destructive war. It molded an impressively large, young workforce to consistently drive the economy from both production and consumption sides.
But Vietnam cannot be forever young.
While the country's median age is now low — at around 29 compared to China’s 37, for instance —its population growth is no longer driven by births, but by more people living longer.
It is only a matter of time before the golden age passes. And the clock is ticking fast.
Most of the world has seen its population skew toward the aged, and so the trend is inevitable.
The difference is that for Vietnam and some others it will be a very steep climb down the demographic peak.
Aging will likely hit Vietnam with full force within a very short span of time, whereas in most developed nations it comes gradually, and often after the dream of prosperity has been realized.
The World Bank, in a report released last month, warned that East Asia and the Pacific is “aging faster than any region in history, driven primarily by a rapid decline in fertility, but also increased longevity.”
Transitioning from an aging to an aged society, where people of 65 and above account for 14 percent or more of the total population, took the UK 45 years, the US 69 years and France 115 years.
For Vietnam, this transition would come in a mere 15 years, and complete well before the 2040s, the report forecast.
Poverty
The projected decline of Vietnam's working-age population is not as dramatic as in Hong Kong, South Korea or Singapore.
Unlike these richer economies, though, Vietnam is hardly ready to deal with a lack of workers and the pressures on economic growth that ensue.
Steady annual growth of around 6 percent has lifted many Vietnamese out of poverty in recent years, but the country’s annual per capita income is barely past US$2,000.
More efforts are required to bring the share of population living below $2 a day from 12.1 percent in 2012 to 5.8 percent in 2017 — the year that policymakers believe will mark the beginning of the aging phase, though some argue it has begun.
Speed bumps on the road to affluence will have a stronger impact on older people than other age groups, considering that they have already been left behind when most become better off.
A study by the United Nations Population Fund, or UNFPA, found that between 2010 and 2012 incomes increased for every age group in Vietnam except for the 65-80 category.
Ritsu Nacken, acting representative of UNFPA in Vietnam, said around 17 percent of older persons live under the poverty line and the rate could be as high as 22 percent in rural areas.
She said there are many factors that lead to bad economic outcomes in old age.
“First, changes in family composition and social norms may lead to more old people living alone.
“Second, increased life expectancy means old people may exhaust their savings well before dying.
“And finally, government policies to ensure income protection for older persons are falling short.”
The country has a social security system that doles out allowances regularly to its elderly citizens, but Nacken said the eligibility criteria of the policy is narrow, targeting only people who are poor and without family support. Others have to wait until they are 80 to get the allowance.
Data from different agencies vary. The figure provided by UNFPA is notably low: only around 100,000 people aged between 60 to 79, accounting for a mere 1.3 percent of the population in that age group, receive monthly allowances.
And the sum is not much to begin with.
Increased life expectancy means old people may exhaust their savings well before dying." -- Ritsu Nacken, UNFPA 
Most provinces rarely pay more than the minimum income support of VND180,000, or $8.45, per month, which Nacken considered "insufficient to bring beneficiaries out of poverty.”
For those who have worked long enough and contributed to the state pension fund, the financial situation is only a little better.
It is well known that this stipend is not enough to cover necessities either. Many pensioners say they receive less than $25 per month after working for decades.
And since 2013 there has been talk that the national pension fund might go broke — a prediction that can only add to the vexations of a graying workforce.
Elderly care
Money aside, the increasing number of people entering old age also lays bare the weaknesses in Vietnam’s health and elderly care services that are usually swept under the carpet.
The UK Foreign and Commonwealth Office said in a research note early this year that, with a sub-replacement birth rate of 2.09 and a life expectancy of 73 years and rising, Vietnam would see its population age “extremely rapidly” in the coming decades.
One of the biggest challenges, it said, would be seen in the healthcare system, which is not keeping up with changes in the society.
"The traditional family structure – three-generation households, with the eldest child caring for aging parents – is weakening, yet institutional structures to care for the elderly remain extremely rare: there are fewer than 3,000 geriatric care beds across the whole of Vietnam,” according to the note, which was meant for UK investors looking for business opportunities in Vietnam.
Even officials concede that there are shortcomings in long-term care for the elderly.
“We all know that living standards have improved, but a part of the population including many elderly citizens are still facing hardships — they stay in dilapidated houses, have to work to make a living and sometimes do not receive good care when they are sick,” Deputy Prime Minister Vu Duc Dam said in a speech in Hanoi last week to hundreds of elderly people.
At the end of the speech, he urged children across the country to take good care of their aging parents, because “one day we will also have children and grandchildren, will be old, and will want the exact same things that our parents and grandparents want."
Vietnamese are required by law to take care of their parents in their own age, but it is not an easy area to police, as evidenced by the many instances of old parents being neglected.
After all, putting a virtue — filial piety, in this case — under the purview of the law will not stop the evolution of family dynamics and economic conditions that any aging society is bound to see.
Pham Tuyet Nhung, deputy head of the International Relations Department at the Vietnam Association of the Elderly, said a better life for older people has to begin with how society sees and empowers them.
Better awareness will allow the country to introduce better policies for the elderly, she said.
“For instance, we can’t consider them a burden who are dependent on their children. We need to be able to see their contributions and even potential. If they are supported just like other age groups, they will have a better chance to lift themselves out of poverty.”
If they are supported just like other age groups, they will have a better chance to lift themselves out of poverty." -- Pham Tuyet Nhung, Vietnam Association of the Elderly
Nhung said in many rural families old parents sometimes have to live alone after their children migrate to big cities to work.
“Taking care of aging parents is a beautiful tradition… but in the current context, we need to understand it differently and have a more practical view about it,” she said, calling for more funding for state-run and community-based care services.
Dilemma of the age
Professor Alfred Chan of the Asia Pacific Institute of Aging Studies at Lingnan University in Hong Kong said many countries in the region are caught in the dilemma of “becoming old before becoming rich."
Some of them, including Vietnam and China, are influenced by centuries-old Confucian values and they still see family and neighbors as the core support for the aging, he said.
"This is what most elders from Asia would wish for as well. Children in many ways are still obliged to care for their parents, even though sometimes they may not be capable.”
Many older persons live to 90 now, and so having the youngest householder take responsibility for the whole family becomes rather unrealistic and the expenses are a very heavy burden indeed, he said.
"Thus falling back to the public safety net for welfare provision is inevitable.”
As for Vietnam, he said, a quick drop in labor participation would cause economic growth to slow, while a sudden surge in the older population demands a quick fix to health and social care services.
“One of the most probable ways to sustain economic growth is to allow those who can work to carry on working beyond retirement age.”
Vietnamese legislators last year voted against raising retirement ages, currently at 60 for men and 55 for women. As the pension system remains strained, discussion of the issue is unlikely to go away.
For many, working after the age of 60 is already upon them.
Statistics from UNFPA indicate that 35 percent of older women in Vietnam and 45 percent of older men work, mostly self-employed or as unpaid family workers. And yet they cannot make enough money.
In its report, the World Bank said since East Asia is graying, many old people may have to "work till they drop" to escape poverty.
How many Vietnamese will be in that bleak situation?
Only time will tell.

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