INTRODUCTION

The success of Indonesia's population policy, particularly the family planning programme, has resulted in lowering the fertility rate as indicated by the decrease in the total fertility rate (TFR) from 5.6 in 1967 to 2.3 in 2000. Conversely, the combination of low fertility with rising life expectancies has resulted in accelerating the population ageing process. An Indonesian population census shows that there is a significant increase in the proportion of elderly from 4.5 per cent of the total population in 1971 to 7.2 per cent in 2000. Compared with other developed countries (North America, Europe and Japan), the proportion of Indonesian elderly is lower, however, in terms of absolute numbers, the number of Indonesian elderly in 2000 was about 14 million, close to the number of older people in the Netherlands in 2001, which was about 16 million. It is projected that the proportion of the elderly will increase to 12.7 per cent, or equal to 37 million in 2025 (Demographic Institute 1999).

The industrialization process has led to changes in family relations in Indonesia. For example, because industrialization provided various wage employment to many household members, the proportion of households getting income from family businesses, such as from farms and shops, had decreased. Instead, more households had come to rely on income from wage employment, either from formal or informal jobs. The relation between parents (elderly) and adult children are less inter dependent in part because the children are more independent as they have their own income. Finally, since industrialization largely took place in the urban areas, it has led to the migration of young people to the cities. Therefore, according to Mason (1992), the effect of industrialization on the situation of the elderly may be less co-residence with adult children in the rural areas.

Some studies on Asia have shown that the proportion of elderly who coreside with adult children has decreased over time. The decreasing proportion of co-residence does not necessarily mean an erosion of support and care of the elderly by family members (Mason 1992). In Asia, including in Indonesia, family support remains high.

INTRODUCTION

Social definitions of the elderly vary from one society to another. In general, the conventional age set for retirement reflects the social recognition of old age, as well as the socio-economic context of that society. When the socioeconomic attributes of society change, the age limit for retirement is also likely to be affected. In Singapore, the official retirement age limit has been raised from 55 to 62 in 1999, but 55 remains the voluntary retirement age since it coincides with the statutory age for Central Provident Fund withdrawal for retirement. In this chapter, the elderly is defined as one who is 55 years and above. This is also the definition employed by the Singapore government when it conducted the national survey of senior citizens in 1995 (Department of Statistics 1995).

Continuing decline in fertility and mortality rates in the past three decades as well as improvements in health care facilities and services have changed the demography of Singapore from a “pyramid-shape” young, postwar baby-boomers population to a rapidly ageing population. In fact, Singapore has the fifth fastest ageing population in the world, growing at a rate of 3.8 per cent and ranking between that of Hong Kong's (4.6 per cent) and Japan's (2.8 per cent) (Kua 1994; Shantakumar 1994). In the 2000 Census of Population, the elderly aged 60 years and above constituted 10.7 per cent of the population in Singapore. This is projected to increase to about 27 per cent in 2030. In numerical terms, the population of elderly aged 60 years and above in 2000 (348,729) is expected to increase to approximately 898,500 in 2030 (Shantakumar 1994; Department of Statistics 2001). Figure 9.1 shows the projected demographic changes in Singapore from 1990 to 2030. In view of the fact that the elderly will form a significant proportion of Singapore's population, addressing the issues associated with an ageing population has been highlighted as one of the major challenges on the national agenda.

In recognition of the situation of older persons in the world, 1999 was declared as the International Year of Older Persons by the United Nations. Following the Second World Assembly on Ageing held in April 2002 in Madrid, Spain, the inaugural ASEAN Senior Officials Meeting on Social Welfare and Development, held in October 2002 in Siem Reap, Cambodia, included in its ASEAN Work Programme on Social Welfare, Family, and Population (2003–06), priorities to take into account with regard to welfare, the family and population, given the emerging challenges arising from demographic developments, particularly population ageing.

Population ageing — the process by which older persons assume a proportionately larger share of the total population — is fast becoming a reality in Southeast Asia, but at much faster rates than previously experienced by developed countries. In part this is due to the huge advances made in the areas of health care knowledge, technologies and services, and as well as their accessibility by an increasingly larger segment of the population. Better control of perinatal and infant mortality, a decline in birth rates, improvements in nutrition, basic health care and control of many infectious diseases have all contributed to a Southeast Asian demographic transition revolution. In 1975, the estimated number of older persons was 18.3 million (or 5.7 per cent of the total population), but by 2000, that number had doubled to 37.3 million (or 7.1 per cent), and was projected to reach 87.9 million in 2025 (12.3 per cent). From 1975 to 2025, or in two generations, while the total Southeast Asian population would increase from 522.1 to 692.2 million, or by 32.6 per cent, the number of older persons would increase by 135.6 per cent. The number of older persons has been projected to reach 176.1 million or close to a quarter of the total population by 2050.

INTRODUCTION

Japan is the world's most rapidly ageing country due to its having the longest life expectancy. In 2003, life expectancy at birth for males was 78.36 years, up by 0.04 years from that of the previous year, and that for females was 85.33 years, up by 0.10 years. In 2004, there were 24.9 million elderly (65 years and above), accounting for 19.5 per cent of the total population. The proportion of elderly is expected to increase sharply to reach 25.3 per cent by 2018 and more than 30 per cent by 2033 (Takayama 2004). The aggregate cost of social security in terms of national income is estimated to increase from 17.2 per cent in 2004 to 24.3 per cent by 2025, if there are no changes to the current provisions for benefits. In Japan, nearly 70 per cent of total social security benefits is distributed to the elderly. In 2004, pension payments amounted to 9.2 per cent of GDP and health care expenditure amounted to 5.2 per cent. It is projected that by 2025, pension payment will increase to 11.6 per cent and health care expenditure to 8.1 per cent.

Studies on social security in Japan have focused on issues relating to sustainability of the pension system, the cost of social security, and the need for pension reforms. Takayama (1992, 1998) assessed the effects of a greying Japan on the government budget and raised the need for a pension reform to address the sustainability issue. Horioka (1997, 2004) has focused on the savings behaviours and portfolio composition of the Japanese elderly and found strong motives for retirement and precautionary savings. Hurd and Yashiro (1997) examined the economic status of the elderly and found that generally the elderly in Japan are much more dependent on public pension, with as much as 80 per cent or more of their elderly income coming from public pension. The elderly in Japan have less financial asset income because they hold a much greater fraction of their wealth in housing assets.

INTRODUCTION

Many Singaporeans depend exclusively on a fully funded mandatory defined contribution (DC) social security system. The system, which is based on individual accounts, is administered and managed by the Central Provident Fund (CPF) Board, a statutory board under the Ministry of Manpower. The advantage of a DC system is that it links benefits closely to contributions, hence minimizing the disincentive effects of evasion and early retirement. Not only does this explicit link make the social security system less sensitive to demographic changes, it also avoids the problems of sustainability and the political costs of unrealistic benefit promises. Besides, it ensures individual equity and avoids intergenerational inequity. While there are fiscal advantages, savings available for post-retirement consumption expenses depend on the total accumulated amount and its returns. Moreover, the absence of mandatory annuitization exposes the individual elderly to the risk of outliving resources due to longevity. This risk is exacerbated as savings are allowed to be withdrawn before retirement for housing finance and other investments.

To assess the adequacy of retirement savings, it is important to investigate the accumulation and de-cumulation mechanism of these mandatory savings under the Central Provident Fund System. In the next section, the main features of the CPF system are critically reviewed. Section 3 examines the adequacy of the accumulation of the mandatory savings to finance the retirement needs of the elderly. Instead of emphasizing the mechanism of accumulation, the expenditure side of the lifetime budget of the elderly is modeled and the retirement needs in terms of the present value of retirement consumption (PVRC) is estimated. The estimation is obtained by simulations through three major components: calibration of subsistence and medical expenses of the elderly; forecast of cohort survival probability by age and by sex; and generation of yield curves to discount future cash flows. The simulation study indicates that the existing CPF-decreed minimum sum is inadequate to meet the future consumption needs of the female elderly. The inadequacy becomes more severe at higher medical expense growth rates.

INTRODUCTION

In the past, old age policy has not been a major priority for the Indonesian Government, due to the fact that the number of elderly Indonesians (those who are 60 years of age or older) only formed a small percentage of Indonesia's population. The government focused most of its priorities on younger Indonesians of working age in order to assist them in gaining employment. Responsibility for the care of the elderly largely fell to their families, since it was assumed that productive citizens would take care of their aged and infirm parents. Very few government resources were allocated to assist elderly Indonesians, especially those who are poor and/or have no immediate family members to assist them.

Since the late 1990s however, changes have begun to occur in the way the Indonesian Government views the problem of ageing and old age security. This is due to the fact that demographic projections have predicted that the number of elderly Indonesians will increase significantly in the next few decades. In addition, due to the changes in family structure and economic conditions, it becomes increasingly difficult for families to care for elderly relatives by themselves, leaving many elderly Indonesians vulnerable to poverty or at risk of falling below the poverty line.

Thus, ageing increasingly becomes a policy issue that needs to be addressed by the government. Several new laws were passed which aim to ensure that elderly Indonesians receive adequate support for their livelihood in their old age. Questions remain, however, on whether the approaches undertaken by this legislation are the best way to address the ageing problem in Indonesia and its policy implications.

This chapter will describe the problem of ageing in Indonesia and the development of ageing policy in the country, looking at both past and current legislation. Part I will describe the demographic trends on ageing in Indonesia, while Part II will outline their possible policy implications. Part III will describe current developments in Indonesia's ageing policy, primarily by looking at past and current legislation enacted by the Indonesian Government related to ageing.

INTRODUCTION

The maintenance of close relational ties within multigenerational families has long been a cultural ideal in Asian families. In the discussion of the concept of the Asian family discussed in sociological literature, the high level of interdependence which is maintained even after adult children are married seems to be a distinguishing factor. Research that has studied the life course perspective among Asian populations has highlighted the concept of the “traditional contract” between generations (Bengston 1992). Antonucci's (1990) concept of generalized reciprocity, which refers to exchanges that take place over the lifespan of two generations, are observed to be very much alive in Singapore today (Mehta 1999). This exchange of reciprocal ties between older parents and their adult children has been studied in anthropological and sociological literature as “filial piety”. (Thang 2000)

The topic of grandparenting has received much attention in recent years (Hayslip and Kaminski 2005; Minkler and Fuller-Thomson 2005; Landry-Meyer and Newman 2004). A recent study on filial piety in Singapore by Goransson (2004) traces the trends in changes in the operationalization of filial piety in the Singapore context presently. Discussing the impact of the non-welfare system of Singapore on family dynamics in the context of Chinese Confucian tradition, she concludes that although “[t]he prevalence of filial piety, seniority, and solid intergenerational ties in notions of Chinese culture suggest that familial support and care of elderly would be somehow in-built in the minds of Chinese people”, “[i]n practice however, the image proves to be problematic.” (ibid., p. 20). From Goransson's illuminating study, it is therefore important to conduct in-depth qualitative research to “listen to the ground” in order to fully understand the Singaporean reality.

FOCUS OF CHAPTER

This chapter will limit the “Asian family” to the three major ethnic groups in Singapore, that is, the Chinese, Malays and Indians. The chapter reports on the qualitative findings of part of a larger research project titled “Grandparenting in Selected Asian Societies”, funded by the National University of Singapore. While the larger research covers five countries, this chapter is restricted in scope to Singapore only.

INTRODUCTION

The global population grew from one billion to six billion between 1804 and 1999, with the highest rate of growth (2 per cent) occurring as late as the 1960s. The world's most recent billion took only 12 years to accomplish and life expectancy at birth grew from about 30 years two centuries ago to a global average of 66 years today (United Nations 1999, 2001; Riley 2001). The remarkable human population growth for the past 200 years can be, in part, attributed to the fact that more and more people survive to older ages. The demographic transition of human societies, beginning in the 19th and 20th centuries, is continuing well into the new millennium (United Nations, 2002). With the confluence of lowered fertility and mortality rates in most countries around the world, the global population is ageing at an extraordinary scale.

All societies throughout the world, be it the more developed or the less developed, are no exception to this trend. In the past, the growth of the older population was exclusively a problem faced by the more developed countries. That is no longer true today. The structural change in the global population is further complicated by the accelerated rate of ageing in the less developed societies that are taking a shorter and shorter time to make the demographic transition. In fact, since 1955, the rate of ageing in the less developed regions grew to almost three times that of the more developed regions. Many third world countries are ageing faster at lower development levels and there is less time for developing nations to adjust and react to the rapid demographic transition in their population. In the World Population Ageing: 1950–2050, published by the Population Division of the United Nations, it was concluded that:

INTRODUCTION

In the field of Korean sociology, little attention has been paid to ageing and the problems of older persons. By 1995 only three of the many articles published in the Korean Journal of sociology were on ageing, and only a few members of the Korean Sociological Association were also members of the Korean Gerontological Society or the Population Association of Korea. The reason for this dismal situation was that ageing was not a serious social problem and therefore it did not receive much attention from the academic world and society in general.

In recent years, however, as Korea has become an ageing society, increasing attention has been paid to the problem of ageing by academics and policy makers. More scholars are now engaged in research on the problems of ageing in related fields such as demography, sociology, social welfare, economics, and public health. The government has also expanded organization support for ageing policies in the Ministry of Health and Welfare, and increased the budget to deal with the problems of ageing. Newspapers and television stations are also paying more attention to the problems of an ageing society. As a result, the ageing problem is becoming a matter of great public concern.

Despite these efforts and favourable changes, a lot of problems still exist in this field. The government budget towards solving the problems of older persons is still limited, and the manpower allocated is not enough to solve the problems. There are still considerable gaps between the results of research and government policies. This chapter will focus on identifying the basic characteristics of older persons and their needs, and then examining whether the government's ageing policies are specific enough to meet the different needs of the various subgroups of older persons.

DEMOGRAPHIC TRENDS OF AGEING

While there are various ways to measure the degree of ageing, the proportion of the elderly population and the ageing index are the most common methods. Generally people aged 60 and above or people aged 65 and above are regarded as older persons. In this paper, older persons refer to those aged 65 years and above.

INTRODUCTION

It is now widely recognized that the demographic trends of the past decades in many developing countries, including Thailand, are leading to unprecedented increases not only in the absolute numbers of older persons, but also in their relative proportion to the population. At the same time, rapid social and economic changes are underway that are widely assumed to have profound implications for the circumstances under which the future elderly will live. These changes include the decline in the number of children couples have, greater longevity, increased involvement of women (the predominant providers of care) in economic activities outside the home, physical separation of parents and adult children associated with urbanization and age-selective, rural-to-urban migration, and ideational changes, especially the spread of western-style individualism through the mass media and public education. The present chapter is intended as an overview of the situation of ageing population in Thailand, with detailed analyses of ageing policies and programmes.

AGEING SITUATION IN THAILAND

The Asian region has experienced a rapid decline in fertility over the past several decades. The decline has been more rapid in East and Southeast Asia compared with the other regions in the world. The sustained decline in mortality has resulted in a gradual rise in life expectancy at birth with female life expectancy in general showing a higher and faster improvement than that of males.

As we know, fertility transition first took place in East Asia. Most East Asian countries have completed or are nearing completion of the transition from high to low fertility. Japan was the forerunner with fertility already having fallen below replacement level. Japan thus completed its fertility transition well before most other Asian countries had begun their transition. It is very interesting to contrast the different factors that resulted in the fertility transition in the predominantly rural populations of China and the Republic of Korea (Concepcion 1993).

Economic growth in Southeast Asia is estimated to be at 6.1 per cent y/y (year-on-year) in 2007 (vis-à-vis 6 per cent y/y in 2006), maintaining around the same for 2008 as well (ADB 2007). Exceptional performance in both Singapore and the Philippines is propelling the growth in the region. The region is likely to experience a more favourable growth going into 2009, given a more stable outlook both in the domestic and global economy.

The year 2007 started on a good footing until the deterioration in the U.S. sub-prime mortgage market and a tightening in corporate credit conditions disrupted the global financial markets. This created fuzziness in the U.S. growth outlook, though most observers

Of the ASEAN Declaration's seven “aims and purposes”, only one refers to regional peace and security. The rest have to do with economic, social, cultural, training, technical and scientific cooperation, and the promotion of Southeast Asian studies. The downplaying of political and security matters was deliberate. ASEAN's founders wished to avoid the impression that the new association would serve as a defence pact or military alliance or that it would favour one side or the other in the Cold War. They did not want ASEAN to be perceived as a threat to anyone or to continue being an arena — actual or potential — for the quarrels of the strong.

Yet, it is clear that, from the beginning, ASEAN's larger purposes had to do mainly with regional peace and security — although, emphatically, solely through the use of non-military means. In The ASEAN Reader (K. S. Sandhu et al, compilers, Singapore: Institute of Southeast Asian Studies, 1992), Thanat Khoman, who, as Thailand's foreign minister, was one of the signatories to the Declaration that established ASEAN, looked back to the association's founding and wrote:

There have been in recent years increasing calls upon ASEAN to be “people-centred” or “people-oriented”, to take the “people's” concerns into account, and to consult with the “people's representatives” in what is often called “civil society”. The implication is that regional security is the domain of politicians, diplomats and generals and that regional economic integration is the concern only of governments, corporations and captains of industry. This is somewhat surprising, since people, in very real ways, do benefit from regional security and would profit from the effective integration of the regional economy. An atmosphere of regional stability and security allows people to live their lives and pursue their livelihoods in peace — provided, of course, that the domestic situation is also largely free of violence. Regional economic integration would, if done right, attract investments, spur economic growth, generate jobs, and lower costs. If accompanied by national policies to distribute the benefits of growth equitably, it would benefit the people at large. The problem is that this linkage between regional security and economic integration on the one hand and people's personal welfare on the other is seldom made. Moreover, legitimate governments are expected to reflect the interests of their people and articulate and advance them in inter-governmental processes.

Nevertheless, ASEAN does take cooperative action on matters that more directly affect the quality of people's lives and are publicly perceived to do so. The most prominent of these have been communicable diseases and the environment, together with transnational crime and international terrorism. ASEAN cooperation with respect to natural disasters has also gained prominence, particularly as a consequence of the 2004 tsunami and the other catastrophes that have visited the region in recent years. The ASEAN position on human rights has been the subject of occasional public attention.

COMMUNICABLE DISEASES

The ASEAN response to the 2003 SARS crisis has been hailed as an achievement in regional cooperation against a common threat.

Southeast Asian security is shaped both by its external Asian environment and by dynamics within Southeast Asia. This essay deals briefly with each dimension in turn.

The region's external security environment is becoming more complex with the rise of new powers like China and India, a more assertive Russia, and their geo-political aspirations and military modernizations. Hence, even with the increasing economic inter-dependence and the cooperative security endeavours in the various ASEAN (Association of Southeast Asian Nations) related forums, there is a degree of underlying fluidity and uncertainty about the longer term alignments of the major powers and their attitude towards Southeast Asia.

However, looking ahead just the next few years, the positive trends of the recent past can be expected to continue. First, the U.S. military presence and certain key alliances that underpin East/Southeast Asian security will remain in place. The strengthening of America's alliances with Japan and Australia in recent years and the growing trilateral cooperation among them suggest that the main maritime powers led by the United States will work more closely to balance a rising China, even as they, and others, engage and cooperate with China. Also noteworthy is the deepening strategic cooperation between India and the United States, but its future depends significantly on whether the U.S.-India nuclear deal gets through.

Second, bilateral relations between the United States and Japan on one side and China on the other can be expected to remain generally stable. China will be preoccupied with its internal development and the United States with the Middle East and Afghanistan, while being dependent on Chinese cooperation on a number of regional and international issues. The trend of improvement in Sino-Japanese relations set in motion by former Prime Minister Shinzo Abe is likely to be continued by Premier Fukuda. Sino-Indian relations have seen expanded dialogue and economic links but their future will depend in part upon how far U.S.-India strategic and defence cooperation advances.