Challenges and Impacts of Ageing Population in Asian Countries

Running head: BUSINESS IN ASIA
Business in Asia
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1BUSINESS IN ASIA
Introduction
In the current time, one of the major issues for the countries across the world is the
ageing population. This problem is mainly relevant in the Asian region with the higher
percentage of the ageing population. Even though this process is natural, but it is quite
challenging as well for the countries due to the reason that ageing population will be productive
as the younger population along with having less market demand. Thus, it is a major challenge
for the countries in dealing with this natural phenomenon (Beard & Bloom, 2015). Moreover, in
the current era of globalization, countries are working in attracting more investments by offering
better market opportunities and resources. However, due to the ageing population, market
opportunities are getting limited and availability of the human resources is also lowering down.
Thus, the economic viability of the countries is getting affected (Oliver, Foot & Humphries,
2014).
With the increase in the impact of the ageing population, it is becoming more important
for the countries to come up with different strategies for mitigating the risks. In addition, they
should also look out about opportunities that can be gained from the existing ageing population.
Determination of the opportunities is important due to the reason that mitigation strategies will
take longer time to have positive outcome.
This essay will discuss about the challenges and impacts that are being faced by the
Asian countries due to the emergence of ageing population. In addition, the existing
opportunities that can be gained from the ageing population will also be discussed in this essay
along with the discussion on the strategies to mitigate the challenges. Real world situations and
examples will be used to analyze the concepts.

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Reasons for the ageing population
There are number of reasons that are contributing in increasing the rate of ageing
population in Asian region. One of the major reasons is the increase in the life expectancy level
due to the improvement in the medical and other facilities. In the current time, major section of
the population is having access to food and security and medical facilities, which is increasing
their life expectancy period. Moreover, the global economic growth is also increasing the
average quality of life of the population, which is also extending the life expectancy (Singh &
Siahpush, 2014). All of these reasons are majorly contributing in the emergence of the ageing
population in the Asian region. However, it should be noted that the problem of ageing
population is evident across the world but it is more in the Asian region. This is due to the reason
that Asian countries are most populated in the world and thus the average numbers of the aged
groups are also more.
Impacts of the ageing population
One of the major impacts of the ageing population is the reduction in average income.
According to Bloom et al. (2015), increase in the ageing population will increase the dependency
ratio due to the reason that aged groups will not be in the earning members and thus the average
income of the earning members will get reduced. The authors have also stated that as the ageing
members are not earning money, hence they are exempted from taxes. With the increase in the
ageing population, the number of tax payers is reducing along with reduction in the economic
viability of the country. Asian countries such as Japan are having more than 27 percent of the
aged population. Hence, dependency ratio in Japan is more and it also denotes that unproductive
population is also more in the country.

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Another impact of the ageing population is the increase in the health care spending. This
is due to the reason that majority of the countries are having schemes for the elderly people and
the more will be the aged population, the more will be the expenditure through these schemes.
According to Beard and Bloom (2015), health expenditures are one of the major areas of
spending for the government and having larger aged population will cause economical dent in
national economy. For instance, India is one of the countries with having considerable portion of
senior citizens in the country. They are having National Old Age Pension Scheme for the elderly
people under which financial supports are being given. Thus, the more will be the number of
elderly people in the country, the more will be the cost incurred in this scheme, which is
reducing the economic viability of the Indian government in spending in other development
activities.
Another major impact of the ageing population is the shortage of employable workers.
This is due to the reason that elderly population will not be employable and productive for the
business. According to Sotiriadou and Wicker (2014), countries with having the higher portion
of the ageing population will have lower access and supply of the human resources. Moreover,
the foreign investments will also be affected in terms of the inflow in the country. This is due to
the reason that if the employable human resources are not available in abundance in the country,
then the average cost will be more for the business. For example, China is the largest country in
terms of the population and abundance of the human resources. This is also the reason behind the
lower cost of human resources. However, on the other hand, it is also reported that ageing
population is also increasing in China and will certainly have challenges in the near future. This
is due to the reason that the more will be the ageing population; the lower will be the employable