A recent report released by the Department of Health warns that Taiwan’s population will age rapidly over the next 14 years.

“Taiwan’s Graying Tsunami” points out that the country is now an aging society. While in 1993 only 7 percent of the population was over age 65, by 2017 that figure is expected to reach 14 percent, for an aged society. And by 2025 Taiwan could be a superaged society, with 20 percent of its population senior citizens.

Many advanced countries, such as Japan and Germany, have already become aged societies. But what is worrisome about Taiwan is the astonishing pace at which it is aging. The population of France needed 115 years to go from 7 percent to 14 percent over age 65, while Sweden took 85 years and the U.S. 73. For Taiwan it is only 24 years.

With the 1946 crop of post-war baby boomers reaching 65 this year, and the fast declining birth rate, the population of young people is decreasing, and the proportion of old people is increasing faster. In 14 years one out of every five people will be an oldster over 65.

This year Taiwan’s old-age dependency ratio—the ratio of the 20-64 working age population to the population 65 and older—is 7-to-1, but by 2022 it is expected to drop to 4-to-1, and by 2028 to 3-to-1. This is a grave threat to the country’s productivity and competitiveness as there are fewer young people to work and support the elderly. No wonder the DOH is sounding the alarm for a future 14 years away.

Taiwan is currently experiencing several unusual phenomena related to the swiftly aging population. In no other country do so many people want to work for the government. According to the Ministry of Examination, more than 135,000 people registered for the senior and junior civil service exams this year, a 15-year high, while just over 2,000, or 1.61 percent, will pass.

Particularly in the wake of the massive layoffs of the Great Recession, the handsome retirement benefits of a public servant that provide lifelong security are enticing. As the average lifespan increases, a pension has become a critical factor in career planning.

Taiwan’s unique National Health Insurance is ironically another serious problem. Senior citizens over 65 now make up 10.3 percent of the population, but are responsible for 34.4 percent of all medical expenses, and this figure will only go up. At the same time, however, as the number of working age people goes down, NHI revenues will decrease, and the specter of bankruptcy looms over the system.

In addition, parents can no longer look forward to being cared for by their children as they enter their golden years. Instead, they have to fend for themselves, and even guard against having to keep supporting their children after the youngsters finish school, as graduation from university does not guarantee employment these days.

This is exactly the situation in Japan, where the elderly live frugally and save all their money for future emergencies. In 2005, 20 percent of Japan’s population was already past 65, which is why its productivity and competitiveness have been stagnant for 20 years.

The government is aware that Taiwan’s birth rate is the lowest in the world and has implemented a number of measures to encourage young people to have children and thus slow the pace of population aging. Most young people, however, will not have children just to get small subsidies, because the overall environment is not conducive to raising children.

These phenomena are gradually eating away at Taiwan’s economic competitiveness. Population aging needs to be tackled directly by revamping retirement programs, finding ways to employ the elderly and developing health maintenance programs for senior citizens, to reduce medical costs. Otherwise, before Taiwan even joins the ranks of developed nations, it will be moribund.

The rapidly graying population has not received much attention as the 2012 presidential election campaign heats up. In the next 14 years the nation will elect three presidents, but if this problem is not addressed, it will not matter who the president is, because Taiwan will be in the same boat as Japan. (THN)

Source: Tawain Today