Our ageing society could lose out in the race with youthful regional partners when economic integration begins next year
The starting pistol for the Asean Economic Community (AEC) is cocked and ready to fire next year. But make no mistake: This is a marathon, not a 100-metre sprint. As such, the “age” of the participants is crucial as the regional bloc prepares to set off on its next adventure. That should trigger concern for Thailand, whose fast-growing “grey-collar worker” sector is second in size only to Singapore’s in this region and will affect our competitiveness in the years to come.
Thailand and Singapore have been categorised as ageing societies since the 2000s, in contrast to Cambodia and Laos, which boast Asean’s most youthful populations.
This demographic structure means that Laos and Cambodia ought to be more competitive in terms of workforce and manpower, while their ageing partners are likely to struggle.
Recent research has confirmed the scale of the difficulty Thailand will face. The birth rate has plunged from an average six children per woman in 1970 to 1.6 in 2013 – the second lowest in Southeast Asia after Singapore. The Singaporean government began taking action years ago, offering financial aid and incentives to encourage couples to have children. It realised that strong measures are needed to prevent the youth population from shrinking further.
In contrast, Thailand has not done enough to combat its ageing demographic. Despite the falling number of births, no concrete measures have been implemented. Upping the birth rate is an arduous and complex task, as authorities in Japan and Singapore have discovered. But, so far, no Thai government has seriously addressed the issue and its implications for our competitiveness in the AEC marathon.
And Thailand could be even more vulnerable than forecast.
We have suffered an even greater drop in births than either Singapore or Japan, and this has come at a time when we are already facing a shortage of workers, especially in labour-intensive industries. With local labour in such short supply, the number of migrant workers in Thailand has been spiralling upward in recent years, which has brought problems of its own for the government.
The labour shortage might be merely a short-term “symptom” of our ageing society, but what awaits Thailand is a lack of manpower in skilled professions that will hinder the country’s economic growth. “Grey” workers will soon dominate both the white-collar and other sectors. The average age of farmers in Thailand is rising and has now reached 51. By 2019 another 5.4 per cent of our elderly population will enter the job market.
Future governments will need to take care of this growing “grey” population, initiating policies to address the issue, increasing the healthcare budget and beefing up infrastructure that caters to the needs of the elderly.
Governments might think they have enough on their plate with existing problems, but the “grey” future is coming and we need to prepare for it. Thailand must start now if it wants to keep up with its AEC counterparts. It must build an economy and institutions that can take care of an ageing society while at the same time drive growth.
Singapore has given itself a head start with measure to increase the birth rate, while Japan has begun adjusting its immigration policies and citizenship laws in a bid to lure highly skilled foreign professionals. Thailand can’t afford to postpone action or pretend there is no problem. Measures will only follow if we have a clear-cut agenda. With or without the AEC, our ageing society is a major issue we have to face up to.