Wednesday, August 26, 2009

Singapore Faces a 'Silver Tsunami'

SINGAPORE - In a departure from the usual state-sponsored message urging Singaporean couples to have more children, this year's National Day rally addressed the island state's rapidly graying population. As rising health and living costs emerge as a threat to social stability and economic growth, a dramatic demographic shift is driving the government to re-examine its past anti-welfare stance.

Singapore has one of the fastest aging populations in the world, with over 65-year-olds estimated by 2030 to represent 23% of the population, the second highest percentage in Asia lagging behind only Japan. If current demographic trends hold, the island state's median age will rise from 36 presently to 41 by 2030. By 2050, the island state's median age will rise to 54, leaving only Japan, South Korea and Macau with more elderly populations.

Singapore's demographic shift has been accentuated by the country's low fertility rate, which fell to a low of 1.24 in 2004 before rising last year to 1.29. Fewer offspring translates into an increased burden on the young population to provide for their elderly forebears. Health Minister Khaw Boon Wan earlier this year described the changing demographics as a "silver tsunami".

The government has long enforced individual savings through the mandatory Central Provident Fund (CPF), which mandates that the population saves for old age. More recently the government announced plans to pass a so-called Re-employment Act, which
will take effect in 2012 and extend the standard retirement age from 62 to 65.

Nonetheless, a recent survey found that less than 5% of the current elderly population relies on CPF disbursements for their livelihood. Rather, the majority of respondents said they depend mainly on their children. That dependence, however, is straining family ties as average health-care costs rise.

Read the complete article by Megawati Wijaya at:

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